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Zoning Peace in Turkey

Zoning Peace in Turkey

Turkiye
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Crowded cities and unplanned urbanization have always plagued Turkey. According to the Ministry of Environment and Urbanization (the “Ministry”), more than ten million structures in the country violate zoning laws and regulations. These structures, including factories, shopping malls, and office buildings, are built without a construction permit, used without an occupancy permit, or violate other laws.

On May 18, 2018, the Turkish government took an important step by introducing a new law, titled “Zoning Peace,” which determines and records structures violating the zoning laws.

The Zoning Peace also introduces the “Building Registration Certificate.” According to the Zoning Peace, Building Registration Certificates must be obtained for structures erected before December 31, 2017 (i) without a license, (ii) in violation of construction/occupancy permits, or (iii) in violation of the zoning laws. 

Building Registration Certificate Issuance

To obtain a Building Registration Certificate, owners must apply to the Ministry and to the institutions authorized by the Ministry before October 31, 2018. Owners must pay a registration fee to obtain the certificate. That fee is 3% of the sum of the land’s property tax value and approximate construction costs for residential properties and 5% for commercial properties. 

According to the Zoning Peace, the Ministry shall determine the approximate construction cost; although it is still unclear what principles the Ministry should use for this determination. The Ministry will likely determine the procedure for the issuance of the Building Registration Certificate before the Turkish general election.

Advantages of Obtaining a Building Registration Certificate

The most remarkable action prescribed by the Zoning Peace is the revocation of demolishment decisions and outstanding administrative fines for unlicensed structures or structures built contrary to the terms of their licenses. For the time being, unlicensed structures no longer run the risk of demolishment.

In principle, independent units in an unlicensed structure cannot be converted into a “condominium structure.” Therefore those unlicensed structures are still regarded as “land” in the Land Registry, and each owner’s land share is proportional to the area of his or her independent unit.. 

With the Zoning Peace, if all unit owners in an unlicensed structure unanimously decide to apply for a Building Registration Certificate and the Building Registration Certificate is granted, the independent units will be converted into a condominium. The registration fee doubles for land use conversion and/or the establishment of condominium.

Validity Term of Building Registration Certificate 

The Building Registration Certificate remains valid as long as the relevant building remains standing. In other words, unless the building is demolished, either voluntarily or due to urban transformation, the Building Registration Certificate remains in effect. Because the Building Registration Certificate expires after a building’s demolishment, any new structure on the property must comply with the applicable zoning laws and regulations. The Building Registration Certificate does not grant a vested right to the owner. 

A separate expiry date for the Building Registration Certificate under the Zoning Peace relates to buildings defined as “being subject to urban transformation.” If a structure with a Building Registration Certificate becomes subject to urban transformation, that building will not be protected by the Building Registration Certificate and will accordingly be demolished.

Exceptions 

Certain parts of the Bosphorus coast line and preview area defined under Bosphorus Law No. 2960 and certain parts of the Istanbul Historical Peninsula and the area defined under Article 2(e) of the Law on Establishment of Directorate of Canakkale Wars Gelibolu Historical Area No. 6546 are exempt from the Zoning Peace.

Conclusion

The Building Registration Certificate allows unlicensed structures to avoid the risk of demolishment, thereby increasing the credibility of the real property, as the unlicensed buildings can be shown as assets for the loans.

In addition, if condominium structures are established and each owner holds the title of the independent unit, it will be easier for the owners to sell their real properties or establish liens on the real property.

From a legal transactions perspective, unlicensed structures are among the most contentious issues during real estate and M&A transactions. The buyers usually introduce “bringing the structure into conformity with zoning laws and regulations” as a condition precedent to the transaction. However, sell-side of the M&A and real estate transactions with unlicensed structures cannot meet this condition due to technical reasons. The introduction of the Zoning Peace will allow the sell-side to obtain a Building Registration Certificate and thereby bring the structure into conformity with the law.

By Birturk Aydin, Partner, and Kerem Kuscu, Senior Associate, Esin Attorney Partnership

This Article was originally published in Issue 5.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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