A construction contract in return for land share is a mixed contract that combines the landowner’s obligation to transfer specified shares of its immovable property or independent units with the contractor’s obligation to build and deliver a structure in accordance with the contract and the approved project. Official form is of critical importance for the validity of the contract, the permit and technical annexes for the implementation of the project, and security and the timing of title transfer for the protection of the landowner. In particular, under the decision of the Grand General Assembly for Unification of Case Law of the Court of Cassation (Yargıtay İçtihatları Birleştirme Büyük Genel Kurulu) dated May 16, 2025, No. E.2024/1, K.2025/2, the invalidity or retroactive ending of the contract does not of itself eliminate the ownership or mortgage rights that third parties acquired in good faith in reliance on the land registry. [1] In disputes, the type of contract, the actual completion, the land registry transactions, the date of the third parties’ acquisition and the specific evidence should be assessed together.
What Is a Construction Contract in Return for Land Share and What Is Its Legal Nature?
In a construction contract in return for land share, the landowner makes it possible for a structure to be built on an immovable property and undertakes to transfer the agreed land share or independent unit to the contractor. The contractor, in turn, undertakes to build the structure in accordance with the agreed project, technical specifications, permit, zoning rules and engineering rules and to deliver the independent units allocated to the landowner. In practice, names such as “flat-for-land construction (kat karşılığı inşaat),” “construction in return for land share” or “flat-for-land construction contract executed by the notary” are used for this contract. The decisive point is not the title of the document but the mutual performances the parties have undertaken.
In terms of its legal nature, the contract is an obligational relationship of a mixed nature that combines the elements of a contract for work under Turkish Code of Obligations (TBK) Article 470 et seq. with the transfer of immovable property or a promise to transfer it. The contractor’s construction obligation is not merely to complete the frame of the building; it includes producing the agreed work with a result that complies with the contract and the law, and delivering it. Nor is the landowner’s obligation limited to granting access to the construction site; it may include title transfer, cooperation in permit procedures, the necessary powers of attorney and the steps falling within its own performance. [2] [3]
The obligational relationship between the parties to the contract and the change in rights in rem occurring in the land registry are different legal planes. A breach by one party of its obligation does not by itself determine under which conditions a third-party right previously established in the land registry will be protected. It is this distinction that makes the 2025 unification-of-case-law decision important. [1]
In what respects does a flat-for-land contract differ from a turnkey contract and a promise to sell?
In a classic turnkey or lump-sum contract for work, the project owner usually pays the construction price in money. In the land-share model, the contractor’s economic consideration consists of specific land shares or independent units; the financing of the construction is therefore tied to title transfer. A promise to sell immovable property, by contrast, may by itself give rise to an obligation concerning the future sale of a specific immovable; it does not automatically carry all the consequences of a mixed contract that includes a construction obligation.
The names “revenue sharing,” “income sharing,” “turnkey construction,” “project development” and “flat-for-land” should not be used interchangeably. Which performances the contract actually contains affects the outcome with respect to form, tax, representation, transfer, termination and third-party rights. Detailed contract types were examined separately in the previously prepared Construction Contracts Guide; this article focuses on the specific risks of the land-share model.
Validity Requirements of the Contract and the Mandatory Official Form
Because of the part of a construction contract in return for land share that imposes a promise to transfer ownership of immovable property or shares to the contractor, an official transaction executed by the notary (düzenleme) is required as a rule. Article 706 of the Turkish Civil Code (TMK), Article 237 of the Turkish Code of Obligations, Article 26 of the Land Registry Law and Articles 60 and 89 of the Notaries Law are the main bases of this assessment. Mere certification of signatures by a notary is not the same transaction as an official contract executed by the notary. The actual transfer in the land registry and the obligational contract undertaking that transfer must also be distinguished from each other. [1] [3] [4]
Why is notarial signature certification not sufficient in every case?
At a notary’s office, signature certification and an official deed executed by the notary are different. In a transaction for which official form is a validity requirement, merely having the signatures that the parties placed on a previously prepared text certified may not cure the defect of form. The official deed must therefore cover the main performances, the allocation of independent units, the method of transfer and the essential terms binding the parties. Additional protocols signed later that substantially change the obligation to transfer immovable property must necessarily be assessed separately with regard to form.
Leaving the land share ratios undetermined in the contract, the inability to determine objectively the numbers, blocks or areas of the independent units, and leaving essential performances to the later unilateral decision of one of the parties create disputes. For structures whose architectural project has not yet been completed, the approved project, area and calculation system under which the allocation will be finalized should be fixed by a clear method.
Can a contract that does not comply with the form become valid later?
Non-compliance with official form is the fundamental risk of invalidity. Nevertheless, the practice of the Court of Cassation discusses exceptional situations in which the relationship that did not comply with the form has actually been performed by the parties for a long time, the essential performances have been fulfilled and relying on invalidity constitutes an abuse of rights in the specific case. Such a possibility does not mean that the form requirement is unimportant or that an invalid contract will automatically become valid as every construction progresses. The assessment under TMK Article 2 should be carried out in a limited manner, based on the work performed, the transfers and the conduct of the parties. [3] [9]
Review of the Land, Title, Zoning and Authority Before Signing
The first check is not the physical appearance of the land but its legal status in the land registry. The block, parcel, surface area, type, current and past owner records, shares, mortgages, attachments, usufruct and easement rights, annotations, injunctions and any pending lawsuits should be assessed. An actual use arrangement that is not reflected in the land registry record may differ from the ownership and co-ownership regime.
The zoning status, development conditions, plan notes, setback distances, floor area ratio (emsal), height, parking, disaster and soil conditions, and restrictions arising from cultural and natural assets and from coastal legislation should be examined. It cannot be assumed that the estimated number of independent units in the architectural project has been definitively approved by the municipality. Provisions on adapting the sales or allocation calculation to whether a permit can be obtained and to the approved project are therefore necessary. [5] [6]
Who should be party to the contract in co-ownership in shares and in a community of heirs?
For immovables held in shares, a single co-owner does not automatically have authority to act on behalf of the other co-owners for construction and disposition transactions affecting the whole immovable. Depending on the type and scope of the transaction, TMK Article 692 and the related co-ownership provisions should be assessed; for dispositions concerning the whole immovable, the required unanimity or the different decision regime under a special law should be determined. In joint ownership, the heirs, the appointment of a representative and the authority structure of the community should be examined separately. In transformations carried out under Law No. 6306, since there may be special provisions on decisions, notification and sale, the general co-ownership majority should not be applied mechanically to the special regime. [3] [7]
How should the scope of the power of attorney be limited?
A power of attorney given to the contractor or to project staff should be proportionate to the need to carry out permit and project procedures. Far-reaching transactions such as title transfer, establishing a mortgage, consent to the sale of independent units, entering into new contracts, settlement, waiver and release should be assessed with separate authority and conditions. A power of attorney does not replace the substantive provisions of the contract or the records in the land registry. In particular, for powers concerning dispositions of immovable property, the special authority and form requirements and the conditions under which the power of attorney ends should be checked.
How Should the Allocation of Independent Units and Land Shares Be Regulated in the Contract?
If the allocation is left only as “50 percent to the landowner, 50 percent to the contractor,” serious uncertainty may arise during implementation. For each independent unit, the block, floor, number, estimated gross/net area, intended use, frontage and appurtenances should be specified; if the numbers change because of a permit/project amendment, a comparison table that will serve to establish identity should be prepared. For parking, storage, technical spaces, terraces and common areas, a distinction consistent with the land registry and the condominium ownership regime should be made.
How the allocation will be recalculated in the event of loss or increase of area, a change in floor area ratio, a new municipal requirement, the creation of a new independent unit and the establishment of servitude of floor ownership (kat irtifakı) should be determined. Actual differences in value should not be reduced to square-meter ratios alone; if valuation is required, the calculation method on which the independent expert report will be based should be explained.
Where do the additional technical protocol and the approved project stand in the contract?
In practice, it is useful to establish the legal backbone in the main contract and to set out the technical details in a signed, dated and version-specific technical specification/protocol. However, the technical protocol cannot be designed so as to change the essential condition of the transfer of immovable property outside official form. It should be clear which document prevails in the event of conflict, who approved a new drawing and through which written procedure an amendment to the additional protocol enters into force.
When Should Title Be Transferred: Upfront Transfer or Phased Transfer?
Although the landowner’s transfer of a high proportion of title to the contractor at the beginning of the contract may make it easier to finance the project, it creates a strong risk in terms of recovery and acquisition by third parties. Once title passes to the contractor, the contractor may carry out various transactions with respect to that right; a subsequent transaction and the landowner’s contract-based recovery claim may then confront each other between different persons. For this reason, the risk cannot be eliminated merely by writing “the title is an advance” in the contract. [1]
In the phased transfer model, the contractor’s right to a transfer may be made to arise upon completion of certain construction stages. Rather than abstract percentage statements, the criteria should be tied to objective documents linked to the approved work schedule, building inspection records, progress payment/work-done determinations, the permit and the occupancy permit. Even a staged transfer does not absolutely prevent title from being transferred to a third party; annotations, mortgages, bank security and special prohibition entries must be examined together.
| Title transfer model | Main advantage | Legal risk and point of attention |
|---|---|---|
| Bulk transfer before construction | The contractor’s financing and sales opportunities may increase | If the contractor is in default, the landowner may have difficulty recovering its right in rem; a third party in good faith may be protected |
| Staged transfer tied to physical completion | A balance can be struck between the work performed and the share transfer | A dispute arises if the control criterion, the independent expert’s approval and the timing of the land registry transaction are unclear |
| Transfer after delivery or acceptance | The landowner’s security before the transfer is strengthened | The financing need, bank contracts and the sales arrangement should be structured separately |
What protection does an annotation in the land registry provide?
TMK Article 1009 provides that rights arising from a construction contract in return for land share may be annotated in the land register. Under certain conditions, the annotation makes it possible to assert a personal right against those who subsequently acquire rights; however, it is not a mechanism that automatically resolves every dispute or absolutely prohibits every transfer of a right in rem in the land registry. The scope and content of the annotation, the third party’s state of knowledge at the time of acquisition and any other land registry entries should be examined separately. [1] [3]
The annotation should not be confused with an interim injunction/injunction annotation during litigation. The former concerns the visibility in the land registry of the right arising from the contract and the ability to assert it; the latter is a temporary legal protection measure granted by the court, subject to certain conditions, in the context of the dispute.
The Landowner’s Rights and Main Obligations
The landowner may demand delivery of the independent units agreed in the contract at the envisaged quality and time; compliance with the approved project; adherence to the technical specifications; remedying of incomplete work and defects; where necessary, a contractual penalty or compensation; and that the contractor carry out transactions on its own share lawfully. If the contract so provides, the landowner may also ask to be informed of progress reports and site records at specified intervals.
In return, the landowner should perform its own obligation in due time with respect to the shares whose transfer has been agreed; provide reasonable cooperation in transactions requiring a construction permit, project, power of attorney or signature; and not unnecessarily obstruct the contractor’s performance of the work. Delays attributable to the landowner may become important in the contractor’s defenses regarding default and extension of time. Not only the contractor’s delay but also the event and the party conduct from which the delay arose should be proven. [2]
The Contractor’s Obligations: Permit, Work, Materials, Work Schedule and Delivery
The contractor is obliged to produce the work in accordance with its duty of care and loyalty, to provide suitable materials, to manage the organization of the work and to deliver the work with the result agreed in the contract. TBK Articles 471–473 are the basic provisions concerning the performance of the work and early warnings that the work will be defective or delayed. [2]
The work schedule should not consist merely of a calendar. Milestones such as site handover, start conditions, foundation/structural system, shell construction, completion of mechanical and electrical works, facade, landscaping, common areas, tests, occupancy permit and actual delivery should be shown separately. The use of a subcontractor does not automatically eliminate the principal performance and responsibility that the contractor has undertaken toward the landowner; the legal position of the subcontractor and the obligations of the main contractor should be determined separately.
Deviation from the project and unauthorized project changes
The contractor’s unilateral change of the approved architectural project or of the allocation of independent units may give rise to a serious breach where it affects the frontage, area, location or use of the unit allocated to the landowner. The fact that the municipality finds a particular change acceptable from an administrative standpoint does not mean that the change automatically complies with the contract between the parties. A project revision should be assessed separately with regard to the consent of the party concerned, matters requiring official form and technical inspection.
Differences Between Delivery, Occupancy Permit, Servitude of Floor Ownership and Condominium Ownership
Handing over the keys, the physical usability of the building, the contract-compliant delivery of the independent unit and obtaining the occupancy permit (yapı kullanma izin belgesi, iskân) are not the same act. The apparent completion of a building does not prove that there are no deficiencies with regard to common areas, installation tests, permit compliance, municipal procedures or the legal conditions of use. For this reason, the documents with which the delivery performance under the contract will be completed should be stated explicitly.
While servitude of floor ownership reflects the share relationship concerning specific independent units during the construction phase, condominium ownership is linked to the legal regime of the completed building. Establishing or converting either institution requires a transaction consistent with the land registry, project and administrative status of the immovable. The contractor’s defense that “servitude of floor ownership has been established” is not in itself evidence that all the work has been delivered in compliance with the contract. [5] [8]
What entries should the delivery record contain?
The delivery date, the independent unit delivered, the status of keys and access, the functioning of the electrical, water and mechanical systems, the condition of the common areas, observed deficiencies, visible defects, work not accepted and any reservations and period for remedying should be stated in the record. The effect of a general statement in the record that the unit was “received complete” on rights that may be asserted later should be examined within the framework of the contract and the law. It is important for the landowner to give notice of defects in time and in a provable manner. [2]
Late Delivery, Contractor’s Default and Compensation for Delay
In assessing delay, the start and delivery dates in the contract, whether the work is subject to an extension of time, the landowner’s cooperation obligations and the contractor’s defense of absence of fault are determined first. TBK Article 117 et seq. and TBK Articles 123–125 on contracts imposing reciprocal obligations may apply depending on the default situation. Situations in which a formal notice (ihtar) is required should be distinguished from the exceptions involving a fixed due date and in which no additional period is required. [2]
Loss of rent, loss of use, the contractual penalty and other damage claims cannot be added together as if they were the same item. Whether the contractual penalty can be claimed together with performance and the consequence of accepting performance without reservation should be examined on the basis of TBK Articles 179–182, the contract text and the specific breach. Recovery of the same item of damage a second time under different names cannot be demanded. In a claim of delay, bank/payment records, the market rent, the value of the independent unit and the formal notice and delivery documents should also be assessed. [2]
Incomplete and Defective Work: Notice, Repair, Price Reduction and Compensation
Incomplete work means that the work agreed in the contract has not been carried out at all or has not been completed; defective work means that the work produced does not have the agreed or legally expected qualities. This distinction matters for acceptance, notice, elective rights, the statute of limitations and the court-appointed expert’s calculation. The provisions of TBK Articles 474–478 are assessed with regard to defects and the related periods. [2]
The landowner’s obligation to inspect the work and to notify defects within an appropriate time is examined in light of the distinction between patent and latent defects. If a latent defect emerges later, the conditions of the notice to be given upon its discovery are addressed separately. With regard to liability for defects in immovable structures, TBK Article 478 provides for a five-year statute of limitations running from delivery and a twenty-year statute of limitations in the event of the contractor’s gross fault. Whether the period applies to the specific claim and act, the delivery date and the gross fault condition should be checked separately; the generalization that “every construction lawsuit is subject to five years” is not correct. [2]
The fitness of the work for use, whether remedying the defect is technically possible and proportionate, the conditions for rescission of the contract and the special consequences in immovable structures should also be assessed. Technical expert reports should explain not only the construction cost but also the source of the error, the allocation of fault and the necessary method of remedy.
Security Arrangements: Bank Letter of Guarantee, Mortgage, Suretyship and Other Safeguards
To protect the landowner, a bank letter of guarantee, a valid mortgage, suretyship, insurance, security retention, phased transfer or other security instruments may be assessed together. Each instrument has a different legal nature. Calling it a “performance bond” does not by itself determine whether the bank letter will be paid on first demand in every case or which receivable the mortgage secures.
The minimum scope of the security should be assessed separately for events such as construction that is never started, abandonment of the work, delay, remedying of defects, third-party encumbrances, and tax/fee and administrative act risks. The conditions for the expiry and return of the security, the date on which the amount will be increased and whether the security covers only certain obligations or all performances should be clear in the contract.
The risk between a mortgage given by the landowner and a mortgage established in favor of the contractor
The establishment of a mortgage on the immovable as security for a loan used by the contractor for financing may additionally affect the landowner. The later ending of the contract may not automatically eliminate a right in rem duly acquired by the bank or another third party. The 2025 unification-of-case-law decision also covers, under certain conditions, the acquisition of a mortgage right in good faith. [1]
Legal Consequences of the Contractor’s Composition with Creditors, Bankruptcy or Abandonment of the Work
A deterioration in the contractor’s financial position may have different effects on title transfers, security given to banks, creditors’ attachments, the assets of the project company, subcontractor receivables and the future of the unfinished structure. In such cases, whether the contract has ended is assessed together with the composition moratorium and the transactions specific to bankruptcy law. Filing for composition with creditors (konkordato) does not by itself automatically terminate every contract; nor does bankruptcy resolve all title transfer disputes with a single rule.
At an early stage, an up-to-date list of land registry encumbrances, bank and financing documents, records of independent unit sales, the current condition of the construction site and mandatory maintenance/security expenses should be identified. Before a decision is made to continue with a new contractor, how the existing contract will be validly terminated or assigned and how the old right/security entries will be managed should be examined from legal and financial perspectives.
Distinguishing Rescission, Prospective Termination and Settlement
When construction is left half-finished, writing “we are terminating the contract” does not by itself secure all the desired in rem and monetary consequences. In a contract imposing reciprocal obligations, TBK Articles 123–125 should be assessed with regard to the contractor’s default, an appropriate additional period and the exceptions. The distinction between rescission with retroactive effect and termination/settlement with prospective effect is linked to the level of construction, the nature of the performances, the project owner’s interest and the principle of honesty and good faith (dürüstlük kuralı). [2] [10]
The decision of the Grand General Assembly for Unification of Case Law of the Court of Cassation dated January 25, 1984, No. E.1983/3, K.1984/1, is important for the legal framework within which a prospective result may be discussed under TMK Article 2 where the stage reached in construction and the particular circumstances of the case justify it. In some Court of Cassation practice, a criterion of 90% or more physical completion stands out; however, this ratio is not by itself the final criterion showing that the construction was delivered in compliance with the law and the contract, that permit/occupancy permit deficiencies have become insignificant or that third-party titles are automatically protected. The construction as a whole, the nature of the work and the claim chosen should be examined. [10] [11]
How are title and the value of the work handled in a retroactive ending?
The restitution of what the parties received, the return of transferred land shares, the mutual performances and the legal and economic value of the work actually performed may come up in the same case file. However, if a third party has a protected ownership or mortgage right, the return of the entire title in kind may not be possible. In such situations, personal claims and claims for the price and compensation against the contractor should be assessed separately; return/compensation calculations should be structured so as not to lead to double recovery. [1]
How is settlement carried out in a prospective ending?
The level of completion of the construction, which part of the work provides an economic benefit to the landowner and which part to the contractor, whether the land shares have been validly earned and the value of the work left incomplete should be determined through review by a technical expert and of the documents. The actual and legal situation should be addressed separately with regard to the independent units to be left to the parties, prior sales, mortgages and remedial work. A general conclusion such as “90 percent was completed, all shares remain with the contractor” cannot be drawn. [10] [11]
The 2025 Court of Cassation Unification-of-Case-Law Decision: The Third Party’s Reliance on the Land Registry and Good Faith
The decision of the Grand General Assembly for Unification of Case Law of the Court of Cassation dated May 16, 2025, No. E.2024/1, K.2025/2, was published in the Official Gazette (Resmî Gazete) of July 18, 2025. The decision concerns the effect on the third party’s right in rem of the invalidity or retroactive ending of the contract after a title transfer made to the contractor following a construction contract in return for land share and after the contractor’s sale to a third party or establishment of a mortgage. [1]
The basic outcome of the decision is as follows: The claim that the third party acquired a right in rem in good faith in reliance on the land registry should be heard. The ownership or mortgage right of a third party whose bad faith at the time of acquisition cannot be shown by specific evidence may be protected. The ending of the contract between the landowner and the contractor does not constitute an automatic ground for cancellation of title vis-à-vis the third party. Conversely, if it is established that the third party was not in good faith, whether that right will be protected is assessed differently. [1] [3]
Which facts matter in determining good faith?
TMK Article 3 regulates the presumption of good faith and the principle of exercising the care required by the circumstances; TMK Articles 1023–1024 regulate reliance on the land registry and the limits of relying on a wrongful registration. Whether the third party, at the time of acquisition, knew of the contractual relationship, that the construction had not been completed, the risk of termination/default under the contract and the decisive information outside the registry, or should have known them with the required care, is examined in the specific case. [1] [3]
Evidence such as a close relationship between the parties, an unusual price, the date of sale, the existence of a formal notice or lawsuit between the landowner and the contractor, the buyer’s actual knowledge of the construction site, and the content of the contract and of the land registry annotation may be significant depending on the circumstances. However, the existence of a single element does not establish bad faith conclusively in every case file. Allegations and evidence should be assessed person by person on the basis of which buyer acquired which share on which date with what state of knowledge.
Is the outcome the same if the third party has only a right of claim?
No. The position of a person who acquired from the contractor the right to receive an independent unit through a notarial promise to sell or a private contract is not the same as that of a person who acquired a right in rem, such as ownership or a mortgage, through registration in the land registry. The core of the 2025 unification-of-case-law decision is the right in rem of the third party relying on the land registry. For personal rights arising from the contract, the conditions of form, transfer, annotation and contractual claims are examined separately. [1]
Does the decision automatically change all old and finalized cases?
A unification-of-case-law decision has the character of binding case law for the subsequent assessments of courts in similar legal disputes. Nevertheless, it cannot be said that every finalized court decision ceases to exist without any application requirement. Res judicata, ordinary/extraordinary legal remedies, debates on procedurally acquired rights (usulî kazanılmış hak) and the transitional conditions to be applied should be examined separately. [1] [12]
Action for Cancellation and Re-registration of Title, Compensation and Interim Legal Protection
After the invalidity of the contract, rescission or termination, claims for cancellation and re-registration of title, a negative declaratory judgment, contractual receivables, compensation, a contractual penalty or the value of the work may arise. Which claim is to be directed against whom is determined on the basis of the identity of the person who appears as owner in the registry, those in whose favor a mortgage or another limited right in rem was subsequently established, the contractual status of the parties and the compatibility of the claims with one another. A lawsuit brought against the wrong party or an incomplete mortgage/registration claim may affect the enforceability of the judgment.
If there is a risk of transfer in the land registry or a likelihood that evidence will be lost, the conditions for an interim injunction under Code of Civil Procedure (HMK) Article 389 et seq. and for the preservation of evidence under HMK Article 400 et seq. may be assessed. For the court to grant an interim measure, the specific risk, prima facie proof and proportionality should be addressed separately. Filing a lawsuit does not by itself stop a title transfer. [12]
Which court has subject-matter and territorial jurisdiction?
Subject-matter jurisdiction is determined not by the mere label “construction lawsuit” but by the legal nature of the parties and the subject of the action. The possibility of a civil court of first instance in general property disputes, of a commercial court of first instance where the specific case qualifies as a commercial case and of a consumer court where there is a consumer transaction should each be assessed separately. In actions concerning rights in rem, such as cancellation and re-registration of title, the court of the place where the immovable is located may have exclusive jurisdiction under HMK Article 12; in a dispute over a purely monetary contractual receivable, the same rule does not apply automatically. Whether mediation is a condition precedent to litigation should also be determined separately according to the commercial/consumer nature of the case and the type of claim sought. [12] [13]
Which documents are important for proof?
- The contract executed by the notary, its essential annexes, the powers of attorney and all revisions.
- Current and past land registry records, annotation/injunction/mortgage documents and the list of encumbrances on the date of each transfer.
- Approved architectural and engineering projects, the permit, the alteration permit, and building inspection and occupancy permit records.
- Site handover, the work schedule, site reports, photographs, technical determinations, expert reports and dated records on the level of work.
- Formal notices, notification documents, correspondence, bank receipts (dekont), contracts between the contractor and third parties and sales documents.
- Delivery and acceptance records, notices of defects, damage records and documents relating to the rent and damage calculation.
- The bank letter of guarantee, the mortgage agreement, the loan/financing agreement, and composition or enforcement file records.
The existence of a document does not mean that it automatically proves a particular allegation in the lawsuit. The date, parties, authority, content of the document and its consistency with the other evidence should be examined together.
Basic Protective Provisions to Check When Drafting the Contract
| Critical heading | Point to be made specific in the contract |
|---|---|
| Immovable and parties | Block/parcel, co-ownership, representation, land registry encumbrances, authority to transfer and the obligation of legal review |
| Allocation and project | Independent unit allocation schedule, area/frontage/appurtenances, approved project and revision procedure |
| Time and milestones | Site handover, start, objective intermediate stages, final delivery, occupancy permit and force majeure/extension of time |
| Title transfer | Upfront/staged/final transfer, independent expert control, third-party transactions and annotations |
| Security | Bank letter, mortgage, suretyship, insurance, scope, amount, term, payout and return conditions |
| Incomplete and defective work | Technical specifications, acceptance/delivery record, notice, remedy period and compensation procedure |
| Breach and ending | Formal notice/additional period, default, rescission/termination, settlement, advance and calculation of the work |
| Third parties | Buyer, bank, mortgage, sales authority, contract annotation and notification records |
| Dispute | Assessment of the judicial forum with subject-matter and territorial jurisdiction, mediation/arbitration, evidence and interim protection |
This table does not by itself replace a contract ready for signature. Other essential provisions may also be necessary depending on the legal structure of the project. Most important is not that a security provision is merely written in the main contract, but that the relevant right has actually and duly been established.
Order of Steps Before Starting the Contract and When a Dispute Arises
Before the contract: The land registry and zoning records of the land, the authority of all co-owners, the legal and financial position of the contractor, and the project and allocation of independent units are examined. Title transfers or broad powers of attorney that may have serious consequences are not given before the official form and the technical annexes have been completed.
During construction: The permit, the work schedule, technical progress, progress payments, collections, sales authorizations and annotations are documented regularly. When work contrary to the project or a delay is noticed, the relevant statutory and contractual notification requirements are assessed without delay.
In the event of a breach: The contract and land registry records are secured; if necessary, the current state of the work is established through the court. Formal notices, additional periods and claims are prepared so as not to create a contradiction between rescission/termination and the consequences for rights in rem. The acquisition dates of third-party owners and mortgagees are examined separately.
Settlement and after the decision: Continuing construction, a change of contractor, rectification of the land registry, use of the security, calculation of receivables, and tax/fee and permit procedures are addressed with a single legal and technical plan. The enforcement of the final decision, land registry directorate procedures and their effect on the rights of the relevant third parties are monitored separately.
Related articles: Termination of a Construction Contract in Return for Land Share and Return of Title Deeds; Late, Incomplete and Defective Delivery in Construction Contracts; What Can Be Done If the Contractor Does Not Hand Over the Title Deed?; Can a Title Deed Acquired from the Contractor Be Cancelled?; Contractor, Subcontractor and Progress Payment Disputes in Construction Contracts for Work.
Conclusion
In a construction contract in return for land share, legal security depends not only on the completion of the building but on the principles of official form, predictable allocation, technical oversight, security, correct timing of title transfer and protection of third-party rights. The progress of the construction process, the existence of incomplete or defective work, the occurrence of delivery and the conditions for the ending of the contract should be examined on the basis of specific evidence.
After the 2025 unification-of-case-law decision, seeking the unconditional cancellation of third-party titles in reliance on the retroactive ending of the contract is legally risky. The approach that will protect the parties’ rights is to actually establish the safeguards when the contract is concluded and, in a dispute, to conduct the review of the claim, title, work and good faith as one integrated whole.
Frequently Asked Questions
Must a construction contract in return for land share be made before a notary?
This mixed contract, which includes the transfer of a share in immovable property or a promise to transfer it, must as a rule be made before a notary in executed form (düzenleme şeklinde). Signature certification alone does not substitute for this form in most cases. Exceptions based on actual performance and the principle of honesty and good faith are limited by the particular circumstances of the case. [1] [3] [4]
Is it mandatory to hand over the title at the outset in flat-for-land construction?
No. Whether the transfer is made at the outset, at certain construction stages or after delivery may be arranged according to the contract and the financing structure. A bulk transfer at the outset creates an additional risk with regard to protecting the landowner’s right in rem; land registry annotation, security and bank safeguards should be assessed. [1]
If “the title is an advance” is written in the contract, does the title automatically revert?
No. The recovery relationship between the landowner and the contractor is separate from the protection of a third party who acquired a right in rem in good faith in reliance on the land registry. Because of the 2025 unification-of-case-law decision, this clause does not eliminate the rights of third parties in every case. [1]
If the contractor has sold the apartment to a third party, is the title cancelled when the contract is terminated?
Not necessarily. Whether the third party relied on the land registry when acquiring the right in rem and whether it was in good faith are examined. If bad faith cannot be shown by specific evidence, protection of the ownership or mortgage right may come into question. [1]
If construction is 90 percent complete, does prospective termination apply in every case?
No. In some Court of Cassation decisions, completion of 90% or more is used as an important criterion; however, technical completion, the work as a whole, legal performance, the claims and the other features of the case should be assessed together. The ratio alone does not settle delivery or the right to title. [10] [11]
Without an occupancy permit, is the independent unit deemed to have been delivered?
Delivery and the occupancy permit are different institutions. If the specific contract tied the occupancy permit to the delivery obligation, its absence may be significant. Handing over the keys does not automatically show that all contractual and administrative obligations have been fulfilled. [5] [8]
If a latent defect emerges later, within how many years can a lawsuit be filed?
For claims arising from defects in immovable structures, TBK Article 478 generally provides for a five-year statute of limitations running from delivery and, in the event of the contractor’s gross fault, a twenty-year statute of limitations. The notification of the defect, the legal nature, the delivery date and the specific claim should be examined separately. [2]
If one of the landowners does not sign, can the others bind the whole plot?
As a rule, no; however, an assessment of authority and majority is required depending on the nature of the transaction, the ownership regime and the special statutory provisions that may apply. The general rules of co-ownership in shares and the special transformation regime under Law No. 6306 should not be confused. [3] [7]
Does annotating the contract in the land registry provide protection against third parties?
The annotation in the land registry of the right arising from the contract under TMK Article 1009 may provide significant protection; its scope and effect depend on the specific entry. An annotation does not mean the automatic invalidity of all sale and mortgage transactions or a definitive outcome of the lawsuit. [1] [3]
Which documents are needed in rescission and title cancellation lawsuits?
The contract executed by the notary and its annexes, past/current land registry records, transfer and mortgage documents, the approved project, the permit, determinations of the construction level, formal notice and notification documents, payment and correspondence records, and delivery/defect records are the main groups of evidence. The parties and claims of the lawsuit should also be determined. [12]
Sources and legal bases
- Grand General Assembly for Unification of Case Law of the Court of Cassation (Yargıtay İçtihatları Birleştirme Büyük Genel Kurulu), May 16, 2025, E.2024/1, K.2025/2, Official Gazette (Resmî Gazete) No. 32959 of July 18, 2025; full decision: https://www.lexpera.com.tr/ictihat/yargitay/e-2024-1-k-2025-2-t-16-5-2025 (the operative part and reasoning of the decision have been reviewed). Application on the official case-law portal: https://mevzuat.adalet.gov.tr/ictihat/1216648700
- Law No. 6098, Turkish Code of Obligations (Türk Borçlar Kanunu), in particular Articles 112, 117–125, 147, 179–182, 237 and 470–486: https://mevzuat.adalet.gov.tr/mevzuat/103273
- Law No. 4721, Turkish Civil Code (Türk Medeni Kanunu), in particular Articles 2–3, 692, 705–706, 1009, 1020–1025: https://mevzuat.adalet.gov.tr/mevzuat/103249
- Law No. 1512 on Notaries (Noterlik Kanunu), Articles 60 and 89, and Land Registry Law No. 2644 (Tapu Kanunu), Article 26; official collection of the relevant laws: https://www.aile.gov.tr/eyhgm/mevzuat/ulusal-mevzuat/kanunlar/noterlik-kanunu/
- Zoning Law No. 3194 (İmar Kanunu), provisions on construction permits and occupancy permits; official access to legislation: https://www.mevzuat.gov.tr/ (Law No. 3194)
- Law No. 4708 on Building Inspection (Yapı Denetimi Hakkında Kanun) and the related building inspection legislation; official access to legislation: https://www.mevzuat.gov.tr/ (Law No. 4708)
- Law No. 6306 on the Transformation of Areas under Disaster Risk (Afet Riski Altındaki Alanların Dönüştürülmesi Hakkında Kanun), special decision and implementation regime; official access to legislation: https://www.mevzuat.gov.tr/ (Law No. 6306)
- Law No. 634, Condominium Ownership Law (Kat Mülkiyeti Kanunu), regime of servitude of floor ownership, condominium ownership and independent units; official access to legislation: https://www.mevzuat.gov.tr/ (Law No. 634)
- Civil General Assembly of the Court of Cassation (Yargıtay Hukuk Genel Kurulu), 2025/31 E., 2026/300 K., debates on official form in a land-share contract and the exceptional effect of non-compliance with form; full decision link: https://hks.sinaneldem.tr/ictihat/yargitay/hukuk-genel-kurulu-2025-31-esas-2026-300-karar/7f8f8d09-8bd2-493b-a1c2-d0e1e1393a06
- Grand General Assembly for Unification of Case Law of the Court of Cassation, January 25, 1984, E.1983/3, K.1984/1; historical principle and reference within the 2025 decision: https://www.lexpera.com.tr/ictihat/yargitay/e-2024-1-k-2025-2-t-16-5-2025
- 6th Civil Chamber of the Court of Cassation (Yargıtay 6. Hukuk Dairesi), 2025/282 E., 2025/4510 K., assessment of prospective termination, level of work and settlement; full decision access: https://www.arakarar.com/karar/yargitay-6-hukuk-dairesi-2025-282-e-2025-4510-k-592d5844e860
- Law No. 6100, Code of Civil Procedure (Hukuk Muhakemeleri Kanunu), in particular Articles 2, 12, 114, 389–399, 400–405: https://mevzuat.adalet.gov.tr/mevzuat/103103
- Law No. 6102, Turkish Commercial Code (Türk Ticaret Kanunu), Articles 4–5/A, and Law No. 6502 on Consumer Protection (Tüketicinin Korunması Hakkında Kanun); assessment of subject-matter jurisdiction and the condition of suit according to the parties and the type of transaction; official legislation: https://mevzuat.adalet.gov.tr/mevzuat/103039