For most businesses, purchasing commercial property is one of the most significant financial commitments they will ever make. A defect that comes to light after payment can lead to costly disputes, operational disruptions, and substantial financial losses. To minimize these risks, comprehensive due diligence must be conducted before paying a deposit or signing a sale agreement. These five essential checks provide a practical starting point for anyone considering the purchase of commercial property in Zambia.
1. Confirm title and ownership
Before proceeding with any commercial property transaction, request and examine the Certificate of Title to ensure that the registered owner is the individual or entity purporting to sell the property. Where the seller is a company, conduct a search with the Patents and Companies Registration Agency (PACRA) to verify the company’s existence and confirm its current directors and authorized representatives.
However, merely inspecting the Certificate of Title is not sufficient. Your advocates should conduct an independent search at the Lands and Deeds Registry to verify the property’s current legal status. This should include obtaining an official search report and, where necessary, carrying out a physical search of the records to confirm ownership and identify any encumbrances affecting the property. Particular attention should be paid to caveats, restrictions, mortgages, court orders, rights of way, and any other registered interests that may limit the seller’s ability to transfer clean title. Conducting these checks at an early stage can help prevent costly disputes and ensure that the property can be lawfully transferred without unexpected complications.
2. Establish approved land use and planning status
A property may be perfectly owned and still be unsuitable for your business. Establish what use the land is approved for, and whether that matches your plans for a restaurant, clinic, warehouse or workshop. Check the title conditions, the zoning and planning position with the relevant local authority, and whether existing buildings have approved plans and the necessary completion or occupation documents.
Some activities need additional approvals, so ask early. If a change of use would be needed, find out whether it is likely to be granted and how long it may take before you commit to a price.
3. Investigate statutory bills and third-party interests
A property can carry obligations that do not appear on its face. Your advocate should check for unpaid rates, ground rent and utility account bills.
Tenants and occupiers need particular attention. Ask for copies of any leases and establish who is in possession, on what terms, and for how long. Some interests, such as easements and rights of way, may not be visible on a quick inspection. Different interests are found through different sources, including the Registry, the local authority (Council), court records and a physical visit, so a single search will rarely cover them all.
4. Inspect the physical condition and compliance
Instruct a qualified surveyor to conduct a beacon verification survey before completing the purchase. The survey report should confirm whether the property’s boundaries correspond with the approved survey diagram and verify, through coordinate checks, that the property is situated precisely where it is represented to be. This exercise helps identify boundary encroachments, discrepancies in land extent, and potential title or ownership disputes before the transaction is finalized.
5. Review the sale agreement, costs and transfer requirements
Do not sign a sale agreement or make any substantial payments until the agreement has been reviewed by your advocate. A well-drafted sale agreement should accurately reflect the purchase price, payment terms, property description, and the correct details of all parties involved.
Particular attention should be given to any conditions that must be satisfied before completion, such as obtaining regulatory consents, securing third-party approvals, or discharging existing mortgages and other encumbrances. The agreement should also clearly outline the rights and remedies available to each party in the event of default, breach, or delays in completion. Understanding these provisions before signing can help avoid costly disputes and unexpected liabilities.
In addition, the transfer of commercial property in Zambia typically attracts a number of statutory costs and transaction-related expenses. These may include property transfer tax, registration fees, consent fees, legal fees, and other disbursements. The parties should agree from the outset on who will bear each of these costs, and that allocation should be expressly recorded in the sale agreement. Such expenses should be identified and budgeted for before committing to the transaction, rather than becoming an unwelcome surprise at the point of completion.
Verify before you commit
Each of these checks answers a different question: who owns the property, what you may do with it, what burdens it carries and on what terms you are buying it. Careful verification cannot remove every risk, but it greatly reduces the chance of an unwelcome surprise after you have paid.
If you are considering a commercial property purchase, speak to an advocate before paying a deposit or signing anything.
This article is for general information and does not constitute legal advice.
Patrick Chulu Legal Practitioners (PC|LP)
Integrity • Courage • Excellence
📍 Close 1, Ibex Hill, Plot No. 487/100, Near Office of the Public Protector, Lusaka, Zambia
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