Sale types and financial contract models

Step-by-step process

1. Choosing the financial contract model (Owner / investor decision). Depending on the plot's zoning status and your cash needs, decide which of the direct cash sale, build-for-share (construction in return for a land share) or revenue-sharing models will be used.
2. Floor-area ratio (KAKS), building coverage (TAKS) and construction-area ceiling (Parselo zoning engine / architect). When you enter the TAKS (building coverage ratio), KAKS (floor-area ratio, ‘emsal’) and setback distances from the zoning status certificate into Parselo, the footprint and the total construction-area ceiling are calculated. The number of independent units and the building mass are determined by the architectural project.
3. Construction contract in notarial drafting form (Notary). If build-for-share or revenue sharing is to be used, the parties must go to a notary and sign a ‘construction-in-return-for-land-share contract in notarial drafting form’. A contract that contravenes the official form is, as a rule, invalid; consult a lawyer for exceptional case-law situations.
4. Promise-to-sell and mortgage annotation on the title deed (Land Registry Directorate). Present the signed notarial contract to the Land Registry Directorate and have it entered in the annotations section of the title deed. On request, the notary can issue the annotation through the land registry information system. Do not transfer all the land shares to the contractor until the construction is finished; require a staged title-deed transfer.

Legal basis

• Turkish Code of Obligations (Türk Borçlar Kanunu, TBK) Art. 237 (sale of immovables and promise-to-sell contract)
• TBK Art. 282 (barter / exchange contract, ‘trampa’)
• TBK Art. 470 (work contract and construction-in-return-for-land-share contract)
• Notary Law (Noterlik Kanunu) Art. 89 (notarial drafting form, ‘düzenleme şekli’) and Art. 60/3 (promise to sell and annotation)

Key principles

1. Classic cash sale (direct title-deed transfer). The simplest sale model, in which the whole price is paid in cash or by blocked cheque at the signing and ownership is registered.

2. Build-for-share plot sale (in return for a land share). The model in which the landowner transfers a share and the contractor commits to independent units. It must always be made in the notarial drafting form at a NOTARY.

3. Revenue-sharing model. A financial model in which the sales revenue of the independent units in the project is shared at pre-agreed percentages (e.g. 40% landowner, 60% developer).

4. Barter (exchange of immovables). Exchanging the plot for another flat, commercial property or vehicle. In a barter, the transfer of each of the two immovables is separately subject to title-deed fees (Law No. 492 tariff (4) I/20-a); there is no fee advantage. It can reduce the need for cash.

5. Instalment sale and notarial promise to sell. A secured model in which the price is paid in instalments and a ‘promise-to-sell annotation’ and, if necessary, a ‘statutory mortgage’ (kanuni ipotek) is placed on the title deed.

6. Official auctions, enforcement and partition-of-co-ownership sales. Sale by auction on the UYAP e-Auction (e-Satış) portal through a court or enforcement office following a lawsuit to dissolve co-ownership (izale-i şüyu).

Mistakes to avoid

• Making a build-for-share construction contract as a private written agreement (without a notary) (a contract that contravenes the official form is, as a rule, invalid; consult a lawyer for exceptional case-law situations).
• Transferring the land shares to the contractor early without taking a letter of guarantee or mortgage from the contractor.
• Not having the promise-to-sell contract annotated in the title-deed register (rights cannot be asserted against third parties).

Checklist

• Build-for-share and promise-to-sell contracts must be made in the notarial drafting form; a contract that contravenes the official form is, as a rule, invalid (consult a lawyer for exceptional case-law situations).
• In an instalment sale, the landowner should not transfer without establishing a mortgage in their favour on the title deed.
• In a Parselo file, the plot's construction floor area and build-for-share potential are calculated in advance.

With Parselo

From the TAKS/KAKS values you enter, Parselo calculates the floor-area ceiling for construction; in build-for-share and revenue-sharing negotiations this ceiling is the starting point, and the exact area is determined by the architectural project.

Official source: UYAP e-Auction Portal (e-Satış) (https://esatis.uyap.gov.tr)