Factory MEP Due Diligence Before You Buy or Lease

Industrial property deals check the land title thoroughly and the building’s engineering lightly. Yet the price of a factory assumes that its power connection, transformer, fire systems, water and approvals will carry your production — and after the transfer or the lease signature, every gap in them is yours to close, at your cost and on the authorities’ timelines.

This checklist is for buyers and tenants of existing factories and sheds. It covers supply capacity and ownership boundaries, the condition of the assets, approvals compared with the as-built layout, and how to turn what you find into a rectification allowance. Use it alongside your lawyer’s title work, not instead of it.

Supply capacity and ownership boundaries

Start with what the site can deliver and who owns each piece of it. A transformer shared with the neighbouring unit is a different risk from one you own, and a connection sanctioned for half your load is a project, not a formality.

The DISCOM’s rules decide what happens to the connection. In Punjab, for example, PSPCL’s new-connection FAQ says a buyer of an existing property whose supply has been disconnected must check that the previous owner has cleared all dues and obtained a no-dues certificate; without it, a connection is released only after the outstanding dues against the previous consumer are cleared. The same FAQ allows a separate industrial connection in the name of an independent entity for a duly partitioned, electrically separated unit that is owned or leased — which matters when you lease part of a larger shed. Other states’ supply codes differ; check yours before you sign.

On the installation side, the CEA (Measures relating to Safety and Electric Supply) Regulations, 2023 put the responsibility on the owner. Regulation 32(8) makes the owner responsible for keeping an installation free from danger, and regulation 32 requires periodic inspection by the Electrical Inspector above the notified voltage, or self-certification at or below it, at intervals set by the appropriate government (usually the state) and no longer than five years. Ask for the last inspection report or self-certification and the defects it recorded: they become yours on transfer.

Asset condition

Documents say what was approved; the site shows what you are buying. A condition review should be done by engineers who test, not just look:

• Transformer and HT equipment: oil test results (breakdown voltage, and dissolved-gas analysis where available), protection relay test records, age and maintenance history
• LT panels and cabling: thermographic scan under load, insulation resistance, signs of overheating or improvised connections
• Earthing: measured earth-pit resistances and the bonding of structures and equipment
• DG sets: running hours, a load test rather than a no-load start, and the fuel system
• Fire systems: pump performance and automatic start, hydrant pressure at the farthest point, detection and alarm function, and whether storage heights and layouts are still within what the system was designed for
• HVAC, compressed air and utilities: age, refrigerant, leaks, and capacity against your process
• Roof and structure: visible distress, leaks and drainage — and for any structural question, a structural engineer’s report, not an MEP opinion

Your use, not the seller’s, sets the bar. A warehouse buyer inherits racking-height fire requirements on day one, and a process with heavier power or water needs inherits every upgrade the old use never required.

Approvals versus the as-built layout

The expensive surprises are differences between what was approved and what was built: an unapproved mezzanine, a shed added between two blocks, a consent covering half the present capacity. NBC 2016 Part 2 (BIS) describes the building-permit and occupancy-permit process that sanctioned plans come from; the question here is whether the building on the ground still matches them.

Verify each document with the issuing authority, not only from copies in the data room; the National Single Window System’s Know Your Approvals tool helps list the central and state approvals an activity needs. Factory licensing has also moved: section 143 of the Occupational Safety, Health and Working Conditions Code, 2020 repeals the Factories Act, 1948, and the labour codes took effect on 21 November 2025. Things done under the repealed Act are saved to the extent they are not contrary to the Code, so check with the state department how the seller’s licence and plan approval carry over to you.

Rectification allowance and documentary gaps

A finding is not a reason to walk away; it is a cost, a dependency and a risk that someone has to carry. Sort every finding into one of these rows, put a number and an owner on it, and let the deal terms follow.

For lapsed or new approvals, budget for the work and for waiting, but do not build a closing date on an assumed authority timeline. Contract mechanisms — the seller rectifying before closing, a price adjustment, or a retention released against named documents — are for your lawyers to draft; the engineering job is to make each item specific enough to verify. Tenants should run the same checks: a lease may not compensate you for operating in a non-compliant building, and customers’ auditors ask regardless of whose name is on the title.

To size the upgrade works, the MEPF budget calculator gives an order-of-magnitude range for the services your production needs, to compare with what the site already has. Secured Engineers can scope and deliver rectification and expansion works under its turnkey EPC service; for a scope review, send the existing and proposed loads, the site layout and your production constraints through the quote request. The approvals a new or expanded unit needs are set out in order in the factory approvals roadmap, and the traps of adding to an older site in the old-factory expansion trap. Other expansion-stage planning guides are collected in Insights.

Sources and how to verify

• CEA (Measures relating to Safety and Electric Supply) Regulations, 2023 — Central Electricity Authority, notified 8 June 2023; regulation 32.
• PSPCL new connection and load extension FAQ — Punjab State Power Corporation Ltd; dues on purchased property and separate connections in partitioned premises.
• National Single Window System — Know Your Approvals — DPIIT and Invest India.
• National Building Code of India 2016 (SP 7:2016) — Bureau of Indian Standards; Part 2 Administration and Part 4 Fire and Life Safety.
• Occupational Safety, Health and Working Conditions Code, 2020 — Ministry of Labour and Employment; section 143 (repeal and savings). Effective from 21 November 2025 with the other labour codes, per the Government’s announcement on PIB.

Confirm locally: each approval’s current status with its issuing authority, your DISCOM’s rules on name change, dues and partitioned connections, and how your state is handling factory licences under the OSH Code.