The most fundamental check. Obtain and examine all title documents tracing ownership back at least 15–30 years. Each transfer — sale deed, gift deed, inheritance, or partition — must be properly registered and form an unbroken chain. Any gap in the chain represents an undisclosed prior claim that could surface as litigation after your purchase. A qualified property lawyer must verify that the current seller holds legally valid, marketable title to the property.

Obtain an Encumbrance Certificate (EC) from the Sub-Registrar's office covering the same historical period as your title search. The EC records every registered transaction — mortgages, liens, sale deeds, or any charge — against the property. A property with an active mortgage that the seller has not disclosed is not free to be transferred without bank consent. Many investors have inherited unexpected debt by failing to obtain a clean EC before purchase.

Building approval confirms the structure was constructed as per sanctioned plans. The Occupancy Certificate (OC), issued by the municipal authority, confirms the building is complete, compliant, and fit for occupation. A building without an OC is technically illegal for occupation — it cannot be connected to civic utilities as a matter of right, and banks will not lend against it. Surprisingly, a large portion of commercial buildings in Delhi NCR were occupied without a formal OC. Verify this rigorously before proceeding.

Check the local authority's land-use map (Master Plan zoning) to confirm the property is designated for commercial use. A unit in a building zoned residential but used commercially operates in violation of the Master Plan — a risk that can result in sealing or demolition notices. This is particularly relevant in mixed-use localities in Delhi NCR where zoning irregularities are not uncommon. The relevant authority will be DDA (Delhi), HRERA (Haryana), or YEIDA/GNIDA (Noida/Greater Noida) depending on location.

The lease deed is the cornerstone document of any pre-leased commercial investment. Obtain the original registered lease deed — not a copy, not a draft, the registered original with the Sub-Registrar's stamp. Verify: the parties named, the property description, the lease term, the rent and escalation schedule, the lock-in period, renewal options, and any side letters or addenda. An unregistered lease deed of duration exceeding 11 months is legally inadmissible as evidence in Indian courts under Section 17 of the Registration Act.

Verify that the tenant named in the lease deed actually occupies the property and is who they say they are. For corporate tenants, check the MCA (Ministry of Corporate Affairs) portal to confirm the company is active, the registered address, and the filing status. A dormant or strike-off company provides zero covenant strength. For bank-leased commercial properties in Delhi NCR, the tenant's institutional status provides strong covenant quality, but verification of the specific branch's operational lease is still essential.

Request bank statements or official records evidencing 12 months of rent receipts. This confirms the tenant is current on rent payments and that the yield quoted is real, not theoretical. Irregular or delayed payments are early indicators of tenant financial distress. Also verify that rent has been paid at the amount stated in the lease deed — not at a discounted rate due to an informal side arrangement between the seller and tenant.

The lock-in period is the duration during which the tenant is contractually bound to remain and pay rent even if they vacate. Understand: how many years of lock-in remain, what the penalty for early exit is, and whether that penalty is realistic (i.e., several months' rent vs. the full remaining lock-in rent). A lock-in with no meaningful financial consequence for breach provides little real protection. The remaining lock-in period directly affects how you should price the asset.

Most commercial leases in India carry a rent escalation of 15% every 3 years (or 5% annually in some cases). Confirm the exact escalation mechanism, when the next escalation triggers, and what the rent becomes. Also review renewal options: does the tenant have a right to renew, at what rent, for how many terms, and how must they exercise this right? Renewal options at below-market rent can cap your upside; renewal rights for the tenant also add value if the tenant is strong.

Understand who pays Common Area Maintenance (CAM) charges — typically the tenant in Indian commercial leases. If the investor bears any CAM costs, this reduces the effective yield. Review whether CAM is fixed or variable, whether there is a cap on annual increases, and whether the lease grants audit rights over CAM accounts. For multi-tenanted buildings, also verify the proportionate share formula applied to this unit is fair and correctly stated in the lease.

Outstanding property tax arrears attach to the property, not the seller — meaning you could inherit unpaid tax liabilities upon purchase. Obtain the latest property tax payment receipts (at least 3 years) and verify with the municipal corporation (MCD, MCG, NMMC, or local body as applicable) that no arrears are outstanding. In some cases, large commercial properties carry significant undisclosed tax dues that only surface at the time of transfer.

Commission an independent structural engineer to assess the physical condition of the building — not just the specific unit. Look for signs of structural distress, water ingress, inadequate fire safety compliance, electrical system condition, and HVAC status. For older buildings, check remaining structural life. The cost of remediation of hidden structural defects can far exceed what any lease income would justify. This is non-negotiable for standalone commercial buildings and is advisable for large multi-floor commercial purchases.

Commercial leases typically carry a security deposit equivalent to 3–6 months' rent. Verify: the deposit amount stated in the lease deed, whether it is currently held by the seller, and the exact mechanism for its transfer to you at closing. A seller who cannot produce the security deposit at the time of sale creates an immediate shortfall. Also review the conditions under which the tenant can forfeit part of the deposit — these are often disputed at lease-end.

Post-COVID, force majeure clauses in commercial leases have become significantly more consequential. Review what events trigger force majeure, whether force majeure suspends rent (or merely defers it), the notice requirements, and the conditions under which either party may terminate the lease. Some leases have broad termination rights that a tenant can invoke with relatively short notice periods — understanding these is critical to correctly pricing the investment risk.

The final step is a written opinion from both your property lawyer (confirming marketable title and lease validity) and a chartered accountant (confirming the net yield calculation is accurate after tax, stamp duty, and any applicable GST). A written opinion creates an audit trail and ensures your advisors are formally accountable. This document also proves invaluable if you ever sell the property, as a new buyer's legal team will request it as part of their own diligence process.