Turkey: Turkey’s New Condominium Law: New Concepts Address Old Problems

The Turkish real estate market has experienced explosive growth over the past few years. Construction of numerous shopping malls and multi-family residential developments and planned communities has made condominium ownership one of the most important practice areas of real estate law. Those familiar with the concept of condominiums, with general and limited common elements and with strata title regimes, will find both long-established, as well as unique, provisions in Turkey's new condominium law.

The provisions and regulations of Condominium Law No. 634, enacted more than forty years ago, were no longer adequate for today's real estate world. The Turkish Grand National Assembly recently passed Law No. 5711 to meet the needs of the modern, sophisticated development climate, extensively amending Condominium Law No. 634. The new Law No. 5711 was published in the Official Gazette on 28 November 2007 and numbered 26714.

Law No. 5711 changes the scope of condominium ownership from a single parcel/single building basis to a collective building/collective property basis with the introduction of updated concepts of common areas, management of the building(s), and individual unit owners cooperating in the payment of common expenses. In these respects, the new law is more in line with the legal regime found for condominiums in jurisdictions like the US, Canada, and certain countries in Western Europe. A more local and physically relevant change is the requirement to construct safe and technically acceptable buildings for today's Turkey, by analyzing the natural disaster risks (e.g. seismic), and requiring owners to take the steps necessary to make structural and other health/safety improvements to vulnerable buildings.

The new collective building concept addressed in Law No. 5711 brings special new provisions to clarify the definition of common areas of the collective buildings, and solves the ownership issues relating to the common areas. Plot, block, and parcel numbers of all parcels in the collective buildings will be annotated to the records of those parcels, which are designated for the common use of all of the independent unit owners. By this annotation, all independent unit owners will be able to use the common areas even if an independent unit is located in a building or on a parcel other than the one on which the respective common area is located.

Law No. 5711 also introduces new terms for the management boards of the buildings (e.g. flat owners' board and collective buildings' flat owners' board) depending on the number of buildings, number of parcels and the common areas.

The meetings of the management boards of the collective buildings are to be held at least once every two years in accordance with the management plan.

The meeting quorum for the management boards is one more than half of the number of flat owners and the ratio of land shares. If a board meeting cannot be held due to an insufficient quorum, a second meeting is to be held within 15 days following the date of the first meeting. If this occurs, resolutions will be passed by a simple majority of the management board.

Management Plan

All of the buildings within the meaning of collective buildings are managed by a single management plan. This management plan is binding upon all independent unit owners. The management plan may only be amended upon the voting approval of 4/5's of all of the independent unit owners who are represented by the collective buildings' board members.

One of the main purposes for the amendment to the Condominium law is to require that improvement work and official inspections be performed on existing condominium buildings in order to protect the residents. Of particular concern, beyond technical health/safety issues, such as faulty wiring and fire prevention, were natural disasters. Parliament is especially concerned about earthquakes, which could cause a serious problem for the buildings in Turkey that were designed and built before the 1999 tragedy. Therefore, lawmakers made new regulations to ensure that technical inspections and required improvements are accomplished with greater expediency.

As is the case with the condominium laws in the US, Canada, and Western Europe, individual flat owners are prohibited from making any alterations or repairs in the common areas without the written consent of 4/5 of all of the flat owners. However, the law does allow individual owners to make alterations and repairs by an expedited court decision, (without the written consent of the other flat owners) if immediate action is necessary. The law requires that the situation must be urgent, and such immediate action must be reasonable, appropriate and ameliorative of the problem.

With regard to the preservation of the building, the flat owners must permit access for technical and health/safety inspections, and all expenses regarding the preservation of buildings are now defined as common expenses.

During the establishment of condominium ownership, if an owner with multiple units used for a single commercial purpose wishes to aggregate those units, the new law provides that they may be registered as a single independent unit through the appropriate title deed registration. For such registration, the amended building plan and the appropriate building utilization permit must be submitted to the title deed registry. In the unusual event of a disproportion between land shares and independent unit shares leading to an individual's loss of property rights, Law No. 5711 grants an aggrieved independent unit owner leave to apply to the court for the restructuring of land shares in accordance with the independent unit shares.

Unlike US law where the condominium regime is established before unit sales, the Turkish law only requires that condominium ownership be established within one year after a valid utilization permit for a building has been obtained. If any flat owner abstains from providing, or from signing, documents which are necessary for the establishment of the condominium ownership, they are subject to a 1,000 YTL administrative fine per separate unit owned by that individual.

The rapid increase in population and the current economic situation have resulted in an irregular urbanization in Turkey. Unlike the former (traditional) urban development schemes with a single parcel/single property modality, new buildings are being constructed and marketed employing a collective building concept. Law No. 5711 goes a long way in establishing an enlightened basis to solve questions of ownership and other related problems arising from the collective building concepts. More importantly, it will hopefully result in safer and more technically advanced buildings for today's Turkey.

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.

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