Turkey has announced a range of changes and new regulations to real estate certificates, intended to improve effectiveness of these instruments. In particular, rules and requirements are introduced for real estate certificates issued within the urban transformation projects. A detailed regime is established for issuing and applying for such certificates.
Amendments Communique (VII-128.2a) on the Real Estate Certificates Communique (VII-128.2) ("Communique") was published in Official Gazette number 29790 on 03 August 2016, entering into effect on the same date.
Key points under the Communique include:
- Municipalities, İller Bank Corporation and TOKİ (housing development administration of Turkey) can be authorized to issue urban transformation real estate certificates.
- To issue real estate certificates, the issuer's total amount of owner's equity should be more than the total amount of issued capital. However, this term does not apply to TOKİ, İller Bank Corporation and their subsidiaries.
- Issuers should obtain a long term credit rating from a credit rating agency (except TOKİ, İller Bank Corporation and their subsidiaries).
- Real estate certificates for urban transformation projects can be issued to persons determined as an owners of a right under the Laws numbered 6306, 5393, 2985 and 775.
- An independent auditing firm competent to act in capital markets will check performance and audit ownership rights, reporting the outcomes via the Public Disclosure Platform.
- Real estate certificate can be issued for more than one real estate project.
- For incomplete real estate projects, a preliminary contract for sale or pre-emption can be concluded if the contact is annotated to the land registry.
Please see this link for all other changes and full text of the relevant Communique (only available in Turkish).
Information first published in the MA | Gazette, a fortnightly legal update newsletter produced by Moroğlu Arseven.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.