Mahmut Barlas / Real Estate
Crowded cities and unplanned urbanization have always been 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 6 June 2018, the Turkish government took an important step by introducing a new communiqué, titled “Zoning Amnesty”. According to Zoning Amnesty, any applicant, who’s property is (i) built without a license, (ii) in violation of construction/occupancy permits, or (iii) in violation of the zoning laws shall have the right to be issued a certificate named as “Building Registration Certificate.” Building Registration Certificates must be obtained for structures erected before December 31, 2017
Advantages of Obtaining a Building Registration Certificate
The Building Registration Certificate brings the revocation of demolishment decisions for the structures that are built with improper legal bases. Furthermore, any outstanding administrative fines for unlicensed structures or structures built contrary to the terms of their licenses shall be revoked. For the time being, unlicensed structures no longer run the risk of demolishment. In other words, unlicensed buildings may have a license based on an ex parte application of the unlicensed building owner.
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.
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.
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.
Considering the vast number of unlicensed buildings in Turkey, this legislative change will have a major effect in Turkish real estate market and economy within the near future.
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