Free buyer guide · SHOP 8-min read

The shop checklist: what to verify before you buy commercial

Five questions you can answer yourself this week for under ₹200, the three traps that cost first-time commercial buyers the most, and a site-visit sheet you can print and carry.

For first-time commercial buyers in India looking at a shop or retail unit — the ₹50 lakh to ₹6 crore range — who are being sold to by people who know the market far better than they do.

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One number, never sold.

₹100–200

cost of the Encumbrance Certificate that shows every past loan and sale

25–35%

typical gap between super area and the carpet area you actually use

3 phrases

to search for in the agreement before you sign anything

Read this before the site visit

Buying your first commercial shop is not the problem. Not knowing what the other side knows is.

Every check in this kit is something you can complete yourself this week, for under ₹200. Nothing here needs a lawyer in the room or a thirty-year title search — if it did, we would have left it out.

Work through the five questions first. Then read the three traps, because those are where first-time commercial buyers lose the most money. Then print the site-visit sheet and take it with you.

The five questions

Answer each one before you pay anything. Where you cannot get an answer, stop there — that is the answer.

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1 · Is the title clean?
Get the Encumbrance Certificate (the sub-registrar's record of every registered transaction, loan or claim against the property) from the sub-registrar's office or your state's online portal. Roughly ₹100–200, two to three days, or same-day where the state is online. The bad answer: a live mortgage or charge that nobody mentioned to you. Note the honest limit — an EC only shows REGISTERED dealings, so it will not reveal an unregistered arrangement.
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2 · Have you checked the RERA number yourself?
Search the registration number on your own state's RERA portal. Free, two minutes. It shows the sanctioned plan, the complaints filed, and the possession date the promoter declared to the government. The bad answer: the declared date on the portal is not the date you were told verbally. The portal version is the one that was filed.
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3 · Does the agreement state carpet area, or only super area?
Read the agreement for sale. Under RERA the sale must be on carpet area (the usable floor area, as defined in the Act), not super built-up. The gap between the two is commonly 25–35%. The bad answer: only a super-area figure appears anywhere in the document and no carpet number is stated.
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4 · Who holds the leasing rights after registration?
Search the agreement for three phrases: leasing rights, marketing rights, tenancy rights. The bad answer: any one of them stays with the developer after your registration — because then the developer, not you, decides what rent your shop is let at, and for how long.
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5 · Do you know what the corridor actually rents for?
Walk into ten running shops in the same corridor. Ask what OTHER people pay, never what you should pay — the answer changes the moment it is about you. Drop the highest and the lowest figure, take the middle. The bad answer: your only number came from the broker or the promoter and you never asked a single shopkeeper.

The three traps

Each one has a specific tell. Learn the tell, not just the trap.

Trap 1 · Leasing rights stay with the developer

The shop is sold to you, but the right to set the rent is retained. The corridor is letting at one rate while your unit sits leased for years at a materially lower one, signed by someone who is not you. THE TELL: the three phrases in question four. If any of them rest with the developer after registration, stop and get that changed before you sign.

Trap 2 · The "assured return" that is your own money

A unit is priced well above what comparable resale is asking, and the difference comes back to you in instalments described as a return. When the scheme period ends the payments stop, and the resale value was always the lower figure. Schemes of this kind were addressed by name in the 2019 legislation on unregulated deposit schemes, so the label changes — lease guarantee, committed income, rental assurance. THE TELL: ask "take the scheme out — what is the rate without it?" Then compare three numbers: the circle rate, the actual resale asking price in the same complex, and the scheme price. The gap between the scheme price and genuine resale IS the return.

Trap 3 · Virtual space with no four walls

A large floor is divided on paper into units. You receive a tile or unit number rather than a demarcated shop with its own walls and entry. Rent is pooled and accounted for by the developer, and resale becomes very hard because there is nothing physical to show a buyer. THE TELL: ask for the sanctioned plan and find your unit's four walls on it. A distinct outline with its own entry is a shop. A number in the middle of an open floor is a share — and shares have a much thinner market.

If any rent is revenue-linked

Where rent is tied to the tenant's sales rather than a fixed figure, three things belong in the lease or it is not a partnership: a minimum guaranteed amount, a monthly sales statement supported by the GST return, and an annual audit right for your own CA.

The site-visit sheet — print this and carry it

Fill these in while you are standing there, not afterwards from memory.

Frontage: measure the width in feet and write it down. Rent follows frontage more than it follows area.
Columns: is there a pillar inside the shop? A brand's standard layout can fail on one badly placed column.
Who has actually signed: names and floors, in writing. "In discussion" and a letter of intent are not a lease. Ask for the anchor tenant's name and the length of that lease.
Footfall at 7pm: stand in the corridor and count people. Do it at the hour the shop would actually trade.
Vacancy: count how many units are empty out of the total. If roughly every third shop is empty, the rent figure you were quoted is a story.
Residential rates within about 3 km: this tells you what is actually in the customer's pocket.
CAM (common area maintenance): the rate per sq ft per month, and — this is the part people forget — who pays it when the unit is empty.

An empty shop still costs you CAM every month. Ask that question before you sign, not after.

Five lines to get into the agreement

Copy these into your draft and have your own lawyer adapt them to your deal. Malls and developers hear these asks routinely — they are not unusual demands. This is general information, not legal advice.

Demand letter — fill the [brackets]

1. Leasing rights transfer to the buyer on registration.
   (After registry, you decide the rent — not the developer.)

2. If the developer leases the unit, the rent shall not be below the prevailing corridor rate — and the agreement shall state HOW that rate is to be measured.
   (A floor on the rent is worth nothing unless the method of measuring it is written down.)

3. Written consent of the owner is required before any lease is executed.
   (No lease is signed over your unit without your signature on it.)

4. Approval timeline: 30 days, deemed approved if there is no written response.
   (You cannot stall a genuine tenant, and they cannot claim you did.)

5. Any refusal must be in writing with reasons, on tenant-mix grounds only — never on rent.
   (Stops a refusal being used to force a lower rent through.)

Six questions to ask out loud

Say them exactly like this. What matters is what the answer tells you.

"Take the scheme out — what is the rate without it?"

Tells you the real price, and how much was added on to fund the "return".

"Who holds the leasing rights after registration?"

Tells you whether you or the developer sets the rent on your own shop.

"Which brands have signed a lease? Name and floor, please."

Tells you whether the tenants are real or still "in discussion".

"Who is the anchor, and how long is their lease?"

Tells you how long the footfall-driver is contractually staying.

"Are you taking brokerage from both sides, or only from me?"

Tells you where the broker's loyalty actually sits.

"What is the CAM, and who pays it when the unit is vacant?"

Tells you your real monthly cost in the months there is no tenant.

The honest part

Commercial is not automatically better than residential. Three risks are real and worth stating plainly.

Vacancy costs you money: an empty shop still attracts CAM every month, so the outgoings continue even when the rent does not. The wrong corridor is unfixable: if the location does not pull footfall, no tenant arrives however good the unit is. And the exit is slower: the pool of commercial buyers is smaller than the residential one, so selling takes longer.

The trade-off, stated once: gross rental yields on commercial are generally higher than on residential — but that is GROSS, and the net figure is materially lower after CAM, property tax, vacancy periods and brokerage. Every lease is different, so run the numbers on the actual unit rather than on a market average.

Not legal or investment advice

General information to help you ask better questions — not legal, tax or investment advice. Costs, timelines and portal procedures vary by state and change over time. Confirm your specific deal with your own property lawyer and CA before you pay anything.

Sources & citations›

Encumbrance Certificate — the sub-registrar's record of registered transactions, loans and claims against a property. It reflects REGISTERED dealings only; an unregistered arrangement will not appear on it.
RERA registration, the sanctioned plan, complaints and the declared possession date are published on each state's own RERA portal.
Sale on carpet area (as defined in the Real Estate (Regulation and Development) Act, 2016) rather than super built-up area. The 25–35% super-to-carpet gap is stated as a typical reported range — confirm against your own agreement.
Schemes promising a fixed return on a property purchase were addressed by the 2019 legislation on unregulated deposit schemes; the commercial substance now commonly appears under other labels.
Costs and timelines quoted (₹100–200 for an EC, 2–3 days, 2 minutes for a RERA search) are typical ranges and vary by state and by whether the state's portal is online — confirm locally.

Want a second pair of eyes on the shop before you pay?

The checks in this kit are the ones you can do yourself. The harder part is reading an agreement's leasing-rights clause, or telling a real corridor rent from a quoted one. villow works on the buyer's side — verified listings, the all-in price, and your number is never sold to a wall of brokers.