Construction Law

Provisions on scope, project and technical specification, price, lump-sum price or unit price, work schedule, site handover, progress payment (hakediş), variation order, extension of time, delivery and acceptance, defects, security, insurance, contractual penalty, termination and dispute resolution are prepared and reviewed in a manner specific to the project. Turnkey, design–build, engineering–procurement–construction (EPC) and project management models are structured according to the nature of the work.

Basic Matters to Be Regulated in Construction Contracts

A construction contract should not be created by adding the project name to a ready-made text. Depending on the nature of the work, at least the following matters should be regulated in a clear, measurable and verifiable manner:

• Identity of the parties, representation and signing authority
• Land and title deed records and existing encumbrances
• Scope of the work and works outside the scope
• Contract documents and their order of precedence
• Project, technical specification, room finish schedule and material standard
• Lump-sum price, unit price, cost-plus fee or mixed price model
• Taxes, fees, Social Security Institution (SGK), permit, utility subscription and other financial burdens
• Site handover, commencement of the work and work schedule
• Interim milestones, delivery and the obligation to obtain the occupancy permit
• Progress payment, advance payment, deductions, retention and final account
• Price adjustment (fiyat farkı), adaptation and extraordinary cost changes
• Additional work, omitted work and variation order procedure
• The project owner’s approval and payment obligations
• The contractor’s organization, personnel and subcontractor obligations
• Inspection, testing, sampling, quality and acceptance system
• Occupational health and safety and environmental obligations
• Delay, contractual penalty, loss of rent and other damages
• Apparent and latent defects, notice, remedy and warranty periods
• Insurance, letter of guarantee, suretyship, mortgage and other security
• Suspension, termination, rescission and liquidation
• Force majeure and the procedure for extension of time
• Confidentiality, intellectual property rights, data and project documents
• Notification, KEP, meeting and site correspondence arrangements
• Mediation, court or arbitration route

Even if the technical details are regulated in a separate technical specification, it should be stated expressly that this specification is an annex to the contract and a binding part of it. Where the implementation details of the project will be determined later, the decision and approval mechanism should be established in the main contract.

The land and title deed, zoning capacity, obtainability of the permit, project and ground data, the contractor’s authorization certificate and technical and financial capability, financing, sales model, estimated cost and security structure are reviewed. Before an investment or contract decision, a legal risk report can be prepared within the agreed scope of review; areas that require technical and financial review are reported by the relevant experts and included in the legal assessment.

Legal and Technical Documents Should Be Reviewed Together in a Construction Project

A construction dispute cannot be resolved through the text of the contract alone. What expressions such as “turnkey,” “in accordance with the technical specification,” “complete delivery” or “works forming the basis of the progress payment” in the contract mean must be compared with the project, quantity take-off, room finish schedule, item description, work schedule, site records and the actual works.

At the beginning of the project, the consistency of the following documents with one another should be checked:

• Title deed record, cadastral extract (çap), staking-out survey (aplikasyon) and zoning status
• Soil survey and geological–geotechnical data
• Architectural, structural, electrical and mechanical projects
• Construction permit and the approved projects annexed to the permit
• Contract, technical specification and room finish schedule
• Quantity take-off, cost estimate summary, unit price or lump-sum price scope
• Work schedule, critical delivery dates and interim milestones
• Progress payment and payment method
• Change of work and additional work procedure
• Construction inspection and laboratory records
• Security, insurance and warranty arrangements
• Provisional acceptance, final acceptance, delivery and defects procedure

The order of precedence among the documents should be set out clearly in the contract. Otherwise, according to which document a conflict among the drawing, specification, quantity take-off and offer is to be resolved may itself become a subject of dispute.

The work schedule, progress payment, variation order, extension of time, additional work, quality, delivery and contractual notices are followed while the project is ongoing. Legal support is provided so that site meetings and correspondence are kept in an order that will prove any progress payment or delay claims that may arise in the future.

The sharing between the landowner and the contractor, independent units, land shares, transfer schedule, security, power of attorney, permit, project change, delivery, occupancy permit, common areas, sales to third parties and the termination of the contract are regulated in detail. Disputes over registration, termination, liquidation and compensation arising from existing contracts are handled.

Construction Contracts in Return for a Land Share and Title Security

A construction contract in return for a land share is a contract of a mixed nature that combines the contractor’s obligation to construct a building with the landowner’s obligation to transfer a land share or independent unit, and that involves the transfer of immovable property. The formal requirement, the timing of share transfers and the level at which the contractor has performed its obligation are decisive for title deed claims.

The following risks in particular should be managed in the contract:

• All of the landowners and their share ratios
• Authority problems arising from inheritance, family residence, guardianship or company representation
• Mortgage, attachment, annotation, usufruct and other encumbrances
• Zoning capacity and a project for which a permit can be obtained
• Independent unit list, location, net–gross area and land shares
• Linking share transfers to construction levels
• The contractor’s authority to sell and assign to third parties
• Security mortgage, bank guarantee or controlled transfer of shares
• Project change and the emergence of additional independent units
• Delivery standard of the independent units belonging to the landowner
• Permit, servitude of floor ownership (kat irtifakı), condominium ownership and the obligation to obtain the occupancy permit
• Delay compensation, loss of rent and contractual penalty
• Remedying incomplete and defective works
• Termination of the contract and liquidation of the works carried out
• The position of third parties who acquire independent units from the contractor

Granting the contractor broad title or sales authority at the outset may reduce the landowner’s security before the project is completed. On the other hand, a predictable transfer mechanism may be needed so that the contractor can obtain financing and make sales. The contract should balance these two interests with a system that is tied to the project stages, verifiable and secured.

In structures based on land, financing, project development, sales and revenue sharing, the parties’ contributions, sales authority, audit of the accounts, minimum revenue, marketing, project cost, security and liquidation provisions are regulated.

In projects involving more than one investor, contractor or technical participant, the common purpose, contribution and financing obligation, management and representation, division of work, joint liability, decision-making, share transfer, exit, default and liquidation are regulated. The contractual and tax consequences of a project-specific company, simple company (adi ortaklık), joint venture or consortium model are assessed together.

The building’s non-conformity with the contract, the approved project, the technical specification or the rules of science and art is reviewed. Claims arising from the completion or price of incomplete work are separated from claims arising from defective work. Repair, price reduction, rescission of the contract if the conditions are met, and compensation are assessed. The legal basis and feasibility of a demand for reconstruction are examined separately on the basis of the type of contract, the nature of the defect and technical necessity. Apparent and latent defects, gross negligence, and the obligations of inspection and notice are addressed together.

Incomplete and Defective Construction Works

Incomplete work is the contractor’s failure to carry out, at all or in full, a work it undertook in the contract. Defective work is work carried out that does not conform to the contract, the project, the technical specification, the agreed quality or the intended use. This distinction is important in the assessment of delivery, notice, elective remedies, price and the statute of limitations.

The following comparisons are mainly made in the technical review:

• The contract and the actual works
• The approved project and the actual condition
• The room finish schedule and the materials used
• The structural, mechanical and electrical project and the implementation
• The quantity take-off and the quantity realized through progress payments
• The construction permit and the occupancy permit
• Technical standards, manufacturer’s instructions and the rules of science and art
• The delivery condition of common areas and independent units

In a contract for work, after delivery, inspection as soon as the ordinary course of business allows and notice of defects within a reasonable time are important. A defect that appears later must be notified without delay. Under Article 475 of the Turkish Code of Obligations (TBK), repair, price reduction or, if the conditions are met, rescission are examined, in addition to compensation. If removing the work on the project owner’s immovable property would cause excessive loss, the limitation on the right of rescission is taken into account. The elective remedies and time limits in consumer transactions are assessed separately.

For defects in the load-bearing system, waterproofing, facade, roof, foundation, installations, fire safety, elevator, pool or common areas, a technical panel should be formed by separating the fields of expertise. The legal claim should be based on a verifiable technical finding and cost calculation.

Notice of defects and the statute of limitations for bringing an action are different. TBK Article 478 provides a five-year period running from delivery for defective immovable structures and a twenty-year period if the contractor is grossly negligent. Incomplete work, the price receivable, consumer transactions and other grounds of liability are not accepted as subject to the same period. The starting date, the regime to be applied and the events affecting the period are reviewed according to the file.

TBK Arts. 474–478 · Consumer transactions

The site handover, start of construction, interim milestones, and the delivery and occupancy permit dates are reviewed together with extension of time, force majeure, delay attributable to the project owner and the contractor’s default. Claims for loss of rent, loss of use, delay penalty and other damages are determined according to the specific contract.

Delivery Delay, Extension of Time and Compensation

The delay calculation should not be made only from the delivery date on the calendar. The site handover, permit and project approvals, the project owner’s payments and decisions, variation orders, force majeure, administrative suspension, supply conditions and the contractor’s work schedule are reviewed together.

The following matters need to be clear in the contract:

• The event from which the start of work and the delivery date will run
• The distinction between calendar days and business days
• Interim milestones and the critical path
• Grounds for extension of time
• The period for notice and for submitting documents
• The calculation of the delay penalty and its upper limit
• Loss of rent or loss of use
• The relationship between the contractual penalty and damage exceeding it
• Termination if the delay exceeds a certain level
• Acceleration and recovery programme

It is not sufficient merely to write the expression “force majeure.” That the event is beyond the parties’ control, its effect on the performance of the obligation, the mitigation of the loss, timely notice and the causal link must be examined on the specific facts.

Interim and final progress payments, quantity take-off, measurement sheets, unit price, price adjustment, deductions, retention, offset of advance payments, withholding tax, final account and the balance of the work price are reviewed. The pursuit of unpaid contractor or subcontractor receivables through mediation, litigation, arbitration and enforcement is carried out.

Progress Payment, Quantity Take-Off, Additional Work and Final Account

In a progress payment dispute, whether the work falls within the scope of the contract and the pricing method are decisive as well as the quantity of work carried out. Unapproved additional work, oral instructions, revised projects, mandatory changes on site, and whether the signed progress payments contain a reservation of rights (ihtirazi kayıt) are assessed together.

In the review:

• Offer and price schedule
• Item descriptions and unit price analyses
• Quantity take-off, measurement sheets and as-found survey (röleve)
• Site instructions and meeting minutes
• Interim progress payments and payment records
• Deductions, advance payments and security offsets
• Price adjustment or adaptation provisions
• Final account and release records
• Invoices and commercial books

are considered together. Just as the signing of a progress payment may not mean that every element in the document is final in every case, acceptance without a reservation and payment conduct may also affect the proof of the claim.

The effect on price and time of work outside the contract, a change of scope, an increase or decrease in work, a revised project, a change of materials, the owner’s instructions and extraordinary changes in economic conditions is assessed. Changes are made subject to written records and authorized approval.

The contractor’s failure to start the work, abandonment of the work, delay or defective performance; the project owner’s breach of its payment or cooperation obligations, exceeding of the approximate price, impossibility and other grounds for termination are examined. The consequences of the termination of the contract, with effect for the future or retroactively, on title, works, receivables and the rights of third parties are determined.

Termination of the Contract and Liquidation of the Project

Terminating a construction contract does not consist only of drafting a “termination notice.” The percentage of completion of the building, usability, defects and deficiencies, title transfers, the rights of third parties, the materials and equipment on site, progress payments, security and the method of completing the project must be planned together.

Before termination:

• The nature of the breach and whether it can be remedied
• Whether a formal notice and an additional period are required
• The level of completion of the work
• The economic and technical value of the existing works
• The cost of incomplete and defective work
• The contribution of the project owner or the contractor
• Reversal of title and share transfers
• Acquisitions by third parties
• Cashing in or return of securities
• The cost of completion with a new contractor
• Preservation of evidence and handover of the site

should be assessed. The level of completion and the specific contract may change the retroactive or prospective consequences of termination.

Legal proceedings are conducted on the sharing of independent units and land shares, delay, incomplete work, non-conformity with the project, use of the power of attorney, transfer to third parties, permit and occupancy permit, delivery and termination of the contract.

The subcontractor scope, owner approval, coordination, progress payment, defects, delay, delivery of materials, security, recourse and sharing of liability are regulated; receivable and compensation disputes are followed.

In sales made from a model or while construction is ongoing, the form of the contract, the description of the independent unit, the payment plan, delivery and transfer, project change, the security system, withdrawal or rescission, and provisions on delay and defects are reviewed. In sales that qualify as consumer transactions, the mandatory consumer legislation applies in addition.

Prepaid Housing and Off-the-Plan Sales Disputes

Where a consumer acquires an immovable property for housing purposes by paying the price in advance, the mandatory provisions of consumer legislation may apply alongside the Turkish Code of Obligations and property law. Before the contract is concluded, the construction permit, the capacity of the seller and the landowner, title deed encumbrances, the security system, and the description of the independent unit in the project and sales documents should be reviewed.

The main disputes are:

• A contract that does not comply with the official form
• Sale without a construction permit
• Delay in delivery and title transfer
• Changing the project, the independent unit or the common areas
• Differences between net and gross area
• Incomplete and defective delivery
• The consumer’s request for withdrawal or rescission of the contract
• Refund of payments and compensation
• Mortgage, attachment or project financing burden
• Building completion insurance or other security

Whether the dispute is a consumer transaction, a commercial investment or a general private law relationship may change the court with subject-matter jurisdiction, the mediation requirement and the provisions to be applied.

Registration claims arising from a construction contract in return for a land share or from a promise to sell; the position of third parties who acquire an independent unit from the contractor; title deed records, annotations, attachments and mortgages; and the validity of the contract are assessed together.

A transfer made by a contractor who took over from the landowner in the land registry to a third party, or a mortgage it created, is not the same as claims based solely on a promise to sell or on the assignment of a receivable. Within the framework of the unification-of-case-law decision dated May 16, 2025, No. E.2024/1, K.2025/2, the good-faith claim of a third party who acquired a right in rem in reliance on the land registry is assessed. Invalidity or retroactive termination does not mean that the third party’s title will be reversed in every case. Good faith at the time of acquisition and the specific evidence are decisive.

Review the unification-of-case-law decision

For labor or material claims that add value to the immovable property, the conditions of the statutory mortgage right, the registration period, whether the claim has been acknowledged, and the title deed procedures are reviewed. Because the right to registration is subject to a time limit, the timing of the application is also checked separately.

Before the works are covered, the structure changes or a transfer to a third party takes place, preservation of evidence, an on-site examination and an expert review are requested. Where the conditions are met, an application for an interim injunction or a precautionary attachment is made to restrict a title transfer, to protect security, to secure the receivable or to preserve the existing situation.

Preservation of Evidence and Protective Legal Measures

The existing situation in construction can change quickly. Repairing or covering defective works, handing the site over to another contractor or starting to use the building may make it harder to examine the evidence later. For this reason, where necessary, preservation of evidence, an on-site examination and a specialist expert review should be requested from the court before or during the lawsuit.

The questions to be put to the technical panel in the preservation of evidence should be clear:

• What is the percentage of works carried out?
• What are the deviations from the contract and the approved project?
• Which are the incomplete works and which are the defective works, separately?
• Is the cause of the defect design, material, implementation, supervision or use?
• What is the method of remedy and its current cost?
• How can it be determined whether the building is safe and suitable for its intended use?
• Can it be understood from the technical records which events caused the delay?
• Are the works included in the progress payment consistent with the actual works?

Where there is a risk of title transfer, cashing in of a letter of guarantee or disposal of assets, an interim injunction and a precautionary attachment are examined separately under their own statutory conditions. The subject of the dispute, approximate proof (yaklaşık ispat), security and proportionality are assessed. Preservation of evidence, on the other hand, is requested according to the conditions of legal interest, such as the risk that evidence may be lost or become harder to obtain later; it does not by itself collect the receivable.

Advance payment, final, performance, provisional acceptance deficiency and warranty securities are reviewed together with requests to cash in, return or prevent payment under a bank letter of guarantee. Suretyship, company guarantee, mortgage and assignment of receivable arrangements are structured according to the project risk.

Legal processes concerning the zoning status, permit, approved architectural and engineering projects, renovation permit, construction stop record, demolition, administrative fine and occupancy permit are carried out. The delivery obligation in a private law contract and conformity with municipal and zoning legislation are assessed as separate but connected matters.

Permit, Occupancy, Project and Construction Inspection

A building that appears to conform to the contract may violate zoning and construction legislation; a building with a permit may also lack the qualities set out in the contract. For this reason, the private law obligation and administrative conformity should be examined separately.

In the legal and technical review:

• Zoning plan and plan notes
• Zoning status and building conditions
• Construction permit and its time limits
• Approved architectural, structural, electrical and mechanical projects annexed to the permit
• Project amendments
• Construction inspection records and laboratory results
• Site manager and contractor records
• Construction stop record and sealing
• Administrative fine and demolition order
• Occupancy permit
• Transition to servitude of floor ownership and condominium ownership
• Consistency of the approved project with the actual situation

are assessed. The time limits for administrative applications and annulment actions against municipal or Ministry acts should be followed independently of the private law action.

The contractual, administrative, legal and, where necessary, criminal liability of the construction inspection body, the project author, the site manager, the responsible technician (fenni mesul), architects and engineers is examined. The separation of project, works and inspection faults through technical experts is ensured.

Project design, supervision, consultancy and project management contracts are prepared or reviewed with respect to the scope of services, revision, copyright and usage rights, professional liability, fees and allegations of fault. Authorship of the project and responsibility for construction are assessed without confusing them with one another.

In infrastructure, energy, tourism facility, factory, strengthening, renovation, restoration and demolition works, a project-specific arrangement is established for permits, technical scope, phasing, protection of the existing building, continuation of operations, delivery and liability; disputes are followed.

In construction all risks, erection all risks, third-party liability, professional liability and similar insurance, the scope of coverage, exclusions, notification, damage assessment and the insurer’s payment or recourse claims are reviewed. The consistency of the insurance obligation in the contract with the scope of the policy is checked.

Disputes in building cooperatives over land acquisition, the project and contractor agreement, members’ payment and allocation rights, general assembly resolutions, manager liability, financial review, delivery and liquidation are handled by assessing cooperative law and construction law together.

The determination of a risky building, objection, demolition and eviction, the owners’ decision process, contractor selection, share sale, valuation, a strengthening or reconstruction contract, rent assistance and the routes of application against administrative acts are assessed.

Urban Regeneration, Risky Buildings and Strengthening

In projects under Law No. 6306, the determination of a risky building, objection and finalization; eviction and demolition; the decision majority in proportion to the owners’ shares; the sale process for shares that do not take part in the decision; and valuation, contractor selection and the construction contract must be addressed as a whole.

In an urban regeneration contract, in particular:

• Existing independent units and land shares
• The value in the new project and the method of sharing
• The scope of the majority decision and notification
• The share sale process and the determination of value
• The contractor’s financial and technical capability
• Eviction, demolition and site handover
• Rent assistance or rent payment by the contractor
• Permit and delivery schedule
• Security and controlled title transfer
• Project change and the features of the independent units
• The technical and legal feasibility of the strengthening option

should be examined. Because the majorities, notification and sale procedures in the law may change, the legislation in force on the date of the transaction must be verified separately.

In construction works subject to Laws No. 4734 and No. 4735, legal support is provided in the processes of the tender documents, the contract, site handover, work schedule, extension of time, price adjustment, progress payment, provisional and final acceptance, security, debarment and termination of the contract. The current Electronic Public Procurement Platform (EKAP) and construction works legislation is followed separately.

Public Construction Works

Unlike private construction contracts, public construction works are carried out together with the tender documents, Laws No. 4734 and No. 4735, the General Specifications for Construction Works, the current price adjustment regulations and the decisions of the Public Procurement Board (Kamu İhale Kurulu).

Scope of services:

• Review of the tender documents and the draft contract
• Disputes over work experience, qualification and bids
• Complaint and objection complaint applications
• Site handover and work schedule
• Increase or decrease in work and new unit price
• Extension of time and force majeure
• Price adjustment and additional price adjustment
• Progress payment and final account
• Provisional acceptance, final acceptance and warranty period
• Security, debarment and termination
• Administrative and judicial court disputes

Because public procurement and contract legislation changes frequently, the date of the transaction and the version of the tender documents should be taken as the basis.

In site work accidents, the legal position of the employer, the principal employer, the subcontracting employer (alt işveren), the building owner, the contractor and the technically responsible persons, together with occupational health and safety records, compensation, SGK recourse and the criminal investigation dimensions, is assessed together with the related areas of law.

Projects with foreign parties, FIDIC and similar standard contracts, applicable law, contract language, variation and claims management, dispute boards, mediation, and national or international arbitration processes are carried out.

International Construction Projects and FIDIC Contracts

In international projects, it is not enough for the contract to be prepared only in a foreign language. The applicable law, local mandatory provisions, tax, license, labor, money transfer, security and dispute resolution provisions must be adapted to the country of the project and the financing structure.

Under FIDIC and similar standards, the notice periods, the Engineer’s decisions, variations, extension of time, additional payment claims, dispute avoidance and resolution boards and the arbitration clause are particularly important. Daily site records and contractual notices given on time may carry stronger evidentiary value than a general account prepared after the dispute has arisen.

Güneş & Güneş Law Firm provides contract and legal communication support in Turkish, English, German and Russian.

The consequences of enforcement, bankruptcy or composition with creditors (konkordato) proceedings concerning the contractor, the project owner, the landowner or the project company for the contract, title transfer, security, progress payments and the continuity of the project are assessed. Registration of claims, enforcement, security and liquidation procedures are carried out in connection with one another.

Mediation as a condition precedent to litigation and the court with subject-matter jurisdiction are determined according to whether the dispute is commercial, consumer or another private law dispute. Litigation, arbitration, appeal to the regional court of appeal and, where the conditions are met, appeal to the Court of Cassation, together with the enforcement of decisions, are followed. Statutory exceptions, such as disputes arising from in rem rights over an immovable property even where it qualifies as a consumer transaction, are also taken into account separately.

Mediation, Courts and Arbitration in Construction Disputes

The competent authority and the condition precedent to litigation are determined according to the capacity of the parties and the nature of the transaction and the claim. Whether a dispute is considered a commercial case and whether it falls within mediation as a condition precedent to litigation are separate checks; it is not a sufficient explanation that both parties are merchants. There are also statutory exceptions to mediation in consumer transactions; disputes arising from in rem rights over an immovable property are one of them. In the landowner–contractor relationship, jurisdiction and the condition precedent to litigation are determined by examining the contract and the claim together.

In contracts containing an arbitration clause, the scope and validity of the clause, arbitrability, the selection of arbitrators, the seat of arbitration, language and applicable law are examined. Interim legal protections sought from the court are carried out in harmony with the arbitration process.

In mediation, in addition to the payment plan, the completion of incomplete works, the delivery of project documents, title transfer, the return of security, the vacating of the site, mutual release and the enforceability of the settlement should be regulated expressly.