This article contains information on the latest regulatory developments in the Turkish real estate market, in such areas as public tenders and real estate investment trusts. In particular, we wish to bring you up to date on developments that have occurred between December 2008 and March 2009.
REAL PROPERTY ACQUISITION BY FOREIGN CAPITAL COMPANIES
The Regulation on Acquisition of Real Property by Foreign Capital Companies ("Regulation") includes certain rules for transfer to foreign capital companies of title to real property and establishment of limited rights in rem in favor of foreign capital companies. The Regulation requires foreign capital companies incorporated in Turkey to apply to certain governmental authorities and to obtain permission to finalize such real estate transactions. According to the Regulation, foreign capital companies are required to apply to the Governorship Provincial Planning and Coordination Directorate ("Commission") where the target real property is located. The Commission will then ask the Provincial Directorate of Industry and Trade, the General Staff, and the General Directorate of Security Forces whether the real estate transaction in question is appropriate. Having received the opinion of the said governmental authorities, the Commission will notify the foreign capital company and the respective land registry in writing of its positive or negative decision.
OTHER DEVELOPMENTS IN TURKISH REAL ESTATE
In December 2008, the Accounting Standards Committee of Turkey published a communiqué concerning Commentary on Turkey's Financial Reporting Standards Regarding Real Estate Construction Agreements ("Commentary"). The Commentary elaborates on the accounting of proceeds and relevant expenses generated by commercial enterprises carrying out construction work.
Challenging Public Tenders
On 3 January 2009, the Public Procurement Authority announced the Regulation on Procedures for Challenging Public Tenders. This regulation provides a detailed guideline for both bidders and public authorities by laying out the entire procedure for challenging public tenders held pursuant to Public Procurement Law No. 4734.
Infrastructure Real Estate Investment Company
On 29 January 2009, the Capital Markets Board published the Communiqué Regarding Infrastructure Real Estate Investment Company ("IREIC"). The Communiqué regulates the procedures relating to portfolio management activity permits, organizational structure, registration of capital market instruments with the Capital Markets Board, investment activities and public disclosure requirements. The Communiqué also articulates the requirements for establishing an IREIC and provides extensive rules regulating operation of the IREIC. The Capital Markets Board requires the IREIC to have at least 100 million TL of initial capital, and that at least one of its founding partners be a leading investor, as defined under the Communiqué.
Deforested Areas - 2B Lands
The Turkish Parliament has finally reached a decision on this long-debated and controversial subject. Law No. 5831, which facilitates registration of deforested areas known to the public as "2B lands," entered into force on 27 January 2009. The Turkish government intends to bring Forest Law No. 6831 in line with the recent amendments to the Cadastre Law, thus expediting the process of forest cadastral surveys. In other words, Law No. 5831 aims to support completion of forest cadastral surveys, border delineation and settlement of prolonged ownership disputes, thus establishing an effective legal framework. Population increase and urbanization can be considered the other vital factors that have led to the new Law on 2B lands.
Master Zoning Plans
In February 2009, the Ministry of the Environment and Forestry published a Communiqué Regarding Master Zoning Plans. Unlike other regulations on larger-scale zoning plans, the Communiqué introduces a new 30-day announcement period following evaluation of the objections to the Master Zoning Plans.
Contribution To The Protection Of Cultural And Natural Heritage
The Amendment Law Regarding the Law on the Protection of Cultural and Natural Heritage ("Amendment Law") entered into force on 11 February 2009. The Amendment Law requires the taxpayers to pay a new charge of 10% of the real estate tax accrued in accordance with Real Estate Tax Law No. 1319. The purpose of this new charge is to generate funds for the protection of cultural and natural heritage.
The Amendment to the Regulation regarding the Allocation of Public Lands to Tourism Investments clears up the ambiguity about additional allocation rules for public lands.
Public Disclosure Requirements For Listed Companies
On 9 February 2009, the Communiqué on Public Disclosure No. 54, announced by the Capital Markets Board of Turkey, introduces a new system of public disclosure requirements for listed companies, in order to establish a system parallel to the rules of the European Capital Markets. This new system does not specify each and every action/information that must be disclosed, but instead grants these companies the discretion to decide whether such action/information is important enough to be disclosed to the public.
New Regulations For Public Tenders
Public Procurement Law No. 4734 is applied through various sub-regulations, depending on the type of procurement. Recently, new regulations have been adopted for the procurement of consulting services, construction work, and goods and services. These regulations detail the public tender procedures for public procurement.
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.