Lawyer in Turkey: Contruction Obligation within 2 years

Thursday, February 4, 2016

Contruction Obligation within 2 years

The experienced reader will agree with me. The Turkish legislator keeps on tinkering with the Tapu law. Article 35 of this law changed so many times that we, as a lawyer, must often keep the text of the law itself in hand to ensure the content. Article 35 of the Tapu law regulates the conditions under which a foreigner or a foreign company may buy a property in Turkey. With the latest amendments introduced in May 2012, there are a number of important subjects adjusted. In this article I'm going to talk mainly about the changes relating to the acquisition of undeveloped plots.

Foreign companies 

Before the changes to the Tapu law in May 2012 were carried out, foreign companies could without difficulty purchase detached homes. Buying a house / apartment on behalf of a foreign company was therefore no problem. After the amendments of May 2012, this is no longer possible. With the current change a foreign company may only under special legislation (such as the Petroleum Law, the Energy Act or the Tourism concerns) purchase an uncultivated land under the condition that the company within two years after purchase date has to submit an investment project for the property at the Council of Ministers. The purchase procedure is linked to an authorization procedure by the Council of Ministers.

Foreigner as a natural person 

Buying a house / apartment as property for a foreign person takes no restrictions with it, provided that the house / apartment is located in a restricted area, according to the Ministry of Defense. However, the Council of Ministers reserve the right at all times to special restrictions or impose further conditions on the purchasing procedures. The legislator, with the legislative amendment of 2012 also has imposed the same construction requirement of two years on the foreigner who is purchasing (undeveloped) land or have already purchased.

The consequences

Rightly you'll wonder what happens when the foreigner or the foreign firm fails to comply with the required conditions, namely the submission of an investment project or when there is not started to build in accordance with the investment project within the specified period. The investment project must be filed within two years after the purchase of a vacant plot in the Cabinet.

If one officially establishes that a foreigner or foreign company, in possession of a property, is in violation of the rules of Article 35 of the Tapu law, the foreign owner will be urged to sell the property within one year. If the owner itself did not sell the property within the year, the property will be publicly executed.
The execution amount will, after deducting the necessary fees and taxes, be paid to the owner. Still there are foreigners who purchase undeveloped plots, but in good faith they state the title deeds (Tapu) on name of a Turkish relationship. This situation I experience myself in my practice very often and I discourage this strongly. Any agreements made between you and your relations are not valid. Get yourself some good information and advise before your dream becomes a nightmare.

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