Buying Commercial Property in Bangladesh? A Legal Checklist for Investors

Commercial property in Bangladesh can offer strong returns. Dhaka's office and retail demand keeps growing, and cities like Chattogram, Gazipur, and Narayanganj attract factory and warehouse buyers. But land here has a complicated history. Old surveys, family inheritance, missing records, and fake deeds all cause disputes.

A single missed document can freeze your money for years. That is why property due diligence in Bangladesh is not optional. It is the most important step before you pay a single taka.

This guide gives you a clear, step-by-step checklist. It is written for developers, companies, investors, NRBs, and high-net-worth buyers. A good property lawyer in Dhaka can do these checks for you, but you should still understand what is being checked and why.

What Is Legal Due Diligence, and Why Does It Matter?

Legal due diligence means checking a property's legal health before you buy it. You are asking simple questions:

• Does the seller truly own it?
• Is there any loan, case, or claim on it?
• Are all taxes paid?
• Can I legally use it the way I plan to?

In Bangladesh, a registered deed alone does not prove clean ownership. The registration office records that a document was signed and filed. It does not fully guarantee the seller had the right to sell. So the buyer carries most of the risk.

Commercial deals are also bigger than home purchases. The amounts are higher, the plans are longer, and banks or partners may be involved. A weak title can block your loan, delay your project, or kill your resale value.

Set Up Your Team and Collect the Basic Documents

Before you start, build a small team:

• A property lawyer with experience in land and commercial deals
• A licensed surveyor to measure the land and match it with maps
• An architect or engineer if a building already exists
• A chartered accountant for tax and payment structure

Then ask the seller for a full document set. Ask early, because sellers who hesitate at this stage often have something to hide. Your list should include:

• All previous deeds (the "chain of title")
• Latest khatian records and rent or land tax receipts
• Mutation (namjari) papers
• Approved building plan and completion certificates, if built
• Trade license, if the property is in business use
• Bank loan or mortgage papers, if any
• National ID or company documents of the seller
• Utility bills for gas, electricity, and water

Keep copies of everything. Your lawyer will compare each paper against the others, looking for gaps and mismatches.

Trace the Chain of Title

The chain of title is the story of the property's owners, from the earliest record to today. Each owner must have received the property legally from the one before.

Many lawyers check back at least 30 years, and often further to the original survey record. The chain should have no gaps. Your lawyer will look for:

• Missing links. For example, Owner B sold to Owner C, but there is no proof that Owner A ever sold to B.
• Inheritance problems. Did all legal heirs sign when the land passed from a dead owner? Under personal laws, sons, daughters, wives, and others may have shares. If even one heir did not agree, they may sue later.
• Different names or spellings. Small differences in a name, father's name, or address can point to fraud or careless record keeping.
• Wrong land descriptions. Plot numbers, area, and boundaries must match across every document.

Also confirm that each past deed was properly registered and stamped. An unregistered or under-stamped deed can be challenged.

Check the Khatian and Survey Records

The khatian is the official record of who holds land. Bangladesh has done several land surveys over time. You will see records with names like CS, SA, RS, BS, and City Survey. Each one is a new snapshot of ownership.

Your lawyer should compare all of them. Ownership should flow logically from one survey to the next. If the latest record shows a different person than your seller, that is a serious warning.

Many records can now be checked online through government land portals, such as the e-Porcha service. This makes early checking faster. But online records can contain errors, so your lawyer should also verify them at the local land office (AC Land office or Tahsil office) and, when needed, in the physical record room.

Also check that the land type in the record matches what you plan to do. Land recorded as agricultural, pond, or wetland may face limits on commercial use or filling.

Confirm Mutation and Tax Payments

Mutation (namjari) changes the government record to show the new owner's name after a sale or inheritance. It is a key step that many sellers skip.

Ask these questions:

• Did the seller's name get properly mutated after they bought the land?
• Are there any pending mutation cases?
• Has the land development tax (land tax) been paid up to date?
• Are city corporation or municipal holding taxes cleared?

If the seller never completed mutation, do not panic, but do slow down. Your lawyer may ask the seller to fix this first. It is far easier for the seller to correct the record before the sale than for you to fix it afterward.

Unpaid taxes and utility bills can become your problem. Ask for receipts, and have your lawyer confirm them with the relevant offices.

Search for Loans, Mortgages, and Court Cases

A property can look clean on paper and still carry hidden burdens. You need to check for encumbrances, meaning any legal claim on the property.

Mortgages and loans. Check whether the land or building is mortgaged to a bank or financial institution. Your lawyer can search the sub-registry records for registered mortgages. You should also ask the seller for a written statement and a bank clearance letter. If a mortgage exists, the deal usually needs a lender's release before or at closing.

Court cases. Check for civil suits, partition cases, injunctions, or criminal cases linked to the land. Lawyers usually check the local civil courts, the High Court Division, and special tribunals. Land survey tribunals and loan recovery courts (Artha Rin Adalat) are also worth checking.

Government claims. Confirm there is no acquisition notice for roads, rail, or other projects. These can arrive with little warning and reduce your land.

Some claims never appear in a database, so also visit the site. Speak with neighbors and local caretakers. People often know about disputes long before any paper does.

Verify Zoning, Land Use, and Development Rules

Owning land does not mean you can build or run any business on it. Every plot sits under planning rules. In Dhaka, these come from RAJUK and its Detailed Area Plan (DAP). Other cities have their own development authorities.

Check the following:

• Permitted use. Is the plot zoned for commercial, mixed-use, residential, or industrial purposes?
• Height and floor area limits. How tall can you build, and how much of the plot can you cover?
• Road width. Many rules link building size to the width of the road facing the plot.
• Setbacks and open space. How much land must be left empty around the building?
• Flood zones, wetlands, and water bodies. Filling or building on these can be illegal under environmental and water laws.

A plot that looks perfect for a shopping mall may only allow a small residential building. Confirm this before you sign, not after.

Check Building Approvals for Existing Structures

If the property already has a building, the risk grows. Buildings need several approvals, and a missing one can lead to fines, closure, or even demolition orders.

Ask to see:

• The approved building plan from RAJUK or the local authority
• Proof the building follows that plan (no illegal extra floors)
• Completion or occupancy certificate, where applicable
• Fire safety clearance under the fire service rules
• Structural safety proof under the Bangladesh National Building Code
• Environmental clearance, if needed for the type of use
• Utility connection approvals (electricity, gas, water)

Your architect or engineer should inspect the building physically. Many older buildings have extra floors or changed layouts that were never approved. Buying such a property means you inherit that risk.

Confirm the Seller's Authority to Sell

Even with a perfect property, you can lose money if the wrong person signs. Confirm who is really selling and whether they have the right to do so.

Individual sellers. Check NID, photographs, and signatures. Confirm marital and heir status where needed, since family members may have claims.

Company sellers. Check the company's registration, memorandum and articles, and board resolution approving the sale. Confirm the person signing is authorized. Company records are available through the Registrar of Joint Stock Companies and Firms (RJSC).

Power of attorney (POA). Be extra careful here. Fake or old POAs are a common fraud tool. Check that the POA is registered, still valid, covers the right to sell, and that the owner is alive and aware. When in doubt, ask the real owner to attend the registration in person.

Developers and joint ventures. If the land is under a development agreement, check who owns which share, and whether the landowner has approved the sale.

Watch Out for Special Property Risks

Some categories of land carry extra legal risk in Bangladesh. Your lawyer should specifically rule these out:

• Vested or abandoned property. Some land was taken over by the state under old laws and later returned or claimed. Ownership history in such cases needs very careful review.
• Khas land. This is government-owned land. Illegal transfers of khas land are void, no matter how many deeds exist.
• Waqf or debottor land. Religious or charitable trust land often cannot be sold freely.
• Land under lease. Leasehold is not freehold. Check who the lessor is, how long the lease runs, and whether the lease allows transfer and commercial use.
• Land with tenants. If shops or offices are already rented, read every tenancy agreement. Ask about advance payments, rent terms, and exit rights.
• Shared or undivided land. If several people own one plot together and have not divided it, one owner may not be able to sell a specific piece without others agreeing.

Special Steps for NRBs and Foreign Investors

Non-Resident Bangladeshis (NRBs) and foreign companies face extra questions. The rules can change, so always confirm the current position with a lawyer and the relevant authority before you act.

Key points to check:

• Who is allowed to buy. NRBs can generally buy property, but rules for foreign nationals and foreign companies are stricter and may need approval, for example through BIDA.
• Money transfer. Funds should come through proper banking channels. Keep all remittance records. They matter for legality, tax, and later repatriation of sale proceeds.
• Bangladesh Bank rules. Foreign exchange rules affect how you bring in money and take profit out. Ask about this before you invest.
• Local representation. If you live abroad, you may sign through a power of attorney. This is a high-risk area. Use a trusted lawyer, register the POA properly, and avoid giving wide, open-ended powers.
• Document formalities. Papers signed abroad often need attestation by the Bangladesh mission and proper stamping before use here.
• Tax in two countries. Ask about tax on rent, sale profit, and inheritance in both Bangladesh and your country of residence.

Distance is a risk of its own. Regular updates, photos, and site visits by a representative help protect your interests.

Understand the Full Cost: Taxes, Fees, and Charges

The price on the agreement is not your total cost. Buying property in Bangladesh involves several charges, and the total can add up to a large percentage of the value.

Costs usually include:

• Stamp duty on the deed
• Registration fee
• Source tax and local government tax collected at registration
• Land development tax, city corporation tax, and any dues from the seller
• Lawyer, surveyor, and valuation fees
• VAT or other charges if buying from a developer

Rates depend on location and property type, and the government updates them from time to time. Ask your lawyer and accountant for a current cost sheet before you commit. Also note that under-declaring the price to save tax may look tempting, but it creates legal and tax trouble later, including problems when you try to sell, get a loan, or transfer money abroad.

Draft a Strong Agreement and Pay Safely

Once checks are done, move to the contract stage. Most disputes come from vague agreements and unsafe payments.

Agreement for sale. Sign this before final registration. It should clearly state:

• Full details of buyer, seller, and property
• Price and payment schedule
• Seller's promises about clear title
• A list of documents to be handed over
• Timeline for registration and possession
• What happens if either side breaks the deal, including refund and penalty terms

Warranties and indemnities. Ask the seller to confirm in writing that the property is free of loans, cases, and claims, and to compensate you if this turns out to be false.

Payment. Pay through bank transfer or pay order, never large cash amounts. Keep proof for every payment. Consider staged payments linked to milestones such as mutation, clearance letters, and registration. If possible, use an escrow-style arrangement for the balance.

Registration. Attend the sub-registry office, or make sure your authorized person does. Confirm the deed details are correct before signing, because fixing mistakes later is slow and costly.

Red Flags That Should Make You Stop

Sometimes the smartest move is to walk away. Pause the deal if you see any of these:

• The seller rushes you or refuses to share documents
• The price is far below the market rate
• The seller is not the person in the records
• The seller offers only a POA and avoids meeting in person
• Records have different names, areas, or plot numbers
• The seller asks for large cash payments
• There are stories of family disputes or unresolved inheritance
• The land is near water bodies, roads, or government projects with unclear status

Trust your instincts and your lawyer. A missed deal costs far less than a locked-up investment.

After You Buy: Protect Your Ownership

The deal is not finished at registration. Take these steps quickly:

1. Apply for mutation so the government record shows your name.
2. Pay land development tax and get receipts in your name.
3. Transfer utility connections and trade licenses.
4. Update your company's asset records.
5. Secure the site with fencing, signage, and caretakers, since empty land invites encroachment.
6. Store originals safely and keep certified copies with your lawyer.

Doing this promptly closes the door on later claims and makes future resale or loan approval much easier.

Quick Due-Diligence Checklist

Use this summary when you speak with your lawyer:

• Verify the chain of title for at least 30 years
• Match survey records (CS, SA, RS, BS) with deeds
• Confirm mutation and up-to-date tax payments
• Search for mortgages, court cases, and acquisition notices
• Check zoning, land use, and building rules
• Confirm all building approvals and safety clearances
• Verify the seller's identity, authority, and any POA
• Rule out vested, khas, waqf, and disputed land
• Review tenancy and lease terms
• Understand NRB and foreign-investor rules if they apply
• Prepare a full cost sheet, including taxes and fees
• Sign a clear sale agreement and pay through banks
• Complete mutation and possession steps after purchase

Conclusion

Commercial property can be a smart investment in Bangladesh, but only when the legal foundation is strong. Due diligence takes time and money upfront, yet it protects you from far larger losses later. Check the title, records, taxes, approvals, and the seller's authority. Then make sure your contract and payments are clean.

If you are planning a purchase, speak with an experienced property lawyer in Dhaka before you pay any booking money. A short legal review now can save you years of stress.