Faq

Urban Transformation is the Law on the Regeneration of Areas under Disaster Risk numbered 6306, which came into force after Van Earthquake. Those who want to benefit from this Law have the opportunity of renewing their living spaces that face with the danger of collapse with state assistance no matter where in Turkey. These are assistants such as construction credit, rent allowances and municipality fees and tax advantages.

Considering the fact that Turkey is the world’s number three in the loss of life ranking with disasters experienced, it is crucial to reinforce buildings to provide against possible disasters or earthquakes. 

The first stage to benefit from the urban transformation is the personal application. The documents required for application:

• Copy of the deed

• Copy of the birth certificate

• Petition

• ‘Independent parts list’ received from the Title Deed Department

* (It is sufficient application to be made by one of the apartment owners.)

A technical examination is performed in the building after the application and an ‘earthquake risk report’ is created. Following the approval of the report by the Ministry the annotation of ‘risky’ is put in the registry of deeds. The copies of this annotation are sent to all apartment owners. Apartment owners have the right to appeal against the ‘earthquake risk report’ within 15 days. A ‘Commission of Appeals’ consisting of university lecturers examine the report upon the appeal from apartment owners and give the final decision about the structure. It cannot be appealed against the decision given by the Commission of Appeals. (Even, it cannot be adopted a motion for stay of execution from a court.).

After this process which is approximately 1,5-2 months, the structure is deemed ‘risky’ officially within the scope of urban transformation.

By law, the structures are demolished after being announced risky and each apartment owner becomes plot shareholder at the rate of his share in the title deed. Decisions such as how the new construction will be, the constructor and sharing rates are determined in the ‘Building Shared Decision Making Protocol’ with ⅔ majority according to the land share proportions. This protocol must be prepared by a legist even if all apartment owners give approval; and a copy of the protocol must be sent to the Ministry. Otherwise, the Ministry may conclude that any responsibility was not taken for the structure that is considered risky or it was not constituted a ⅔ majority and demolish the structure by sending an official writing about the discharge of the apartments within 60 days.

There are 3 ways to reconstruct the buildings included in the scope of the urban transportation:

1- If there are more apartments in the zoning of the building to be newly constructed comparing to the current situation and these extra apartments are enough for the flat for land basis, then you may make the building constructed to any contractor.

2- If there are more apartments in the zoning of the building to be newly constructed comparing to the current situation and these extra apartments are not enough for the flat for land basis, then you may make the building constructed by any contractor by using term ‘urban transformation loan’ for the incomplete price for the reconstruction of the building.

3- If the building to be newly constructed has the same number of apartments with the current situation, then you may make the building constructed to any contractor by using term ‘urban transformation loan’ with appropriate interest rates.

The method to be preferred must be determined in the ‘Building Shared Decision Making Protocol’ with minimum ⅔ majority and this must be noticed to the Provincial Directorate of Urban Transformation.

Apartment owners remaining outside the ⅔ majority who agree upon the principled intended to reconstruction of the buildings involved in the scope of the urban transformation, and uncompromising despite their rights are given fairly are convoked to the building management meeting with a notification sent through a public notary.

The shares of the apartment owners who cannot come to an agreement are sold to the other apartment owners with the auction sale in accordance with the law. And in cases where nobody exists to buy them, the Ministry publicizes these shares.

For the sale to take place, firstly it is necessary to make the ‘real estate value’ determined by a licensed real estate assessment company. Then for the shares of the apartment owners uncompromising upon the value stated, it must be applied to the Provincial Directorate of Urban Transformation.

The shares are primarily sold to the shareholders who came to an agreement through the auction in the ‘closed session’ where only apartment owners may attend in the Provincial Directorate of Urban Transformation. If the sale does not come true, the Ministry buys the shares by expropriation and exactly obeys the Building Shared Decision Making Protocol conditions.

The shareholder has right to appeal to court by asserting that he got a raw deal or was treated snidely in the sharing of the building.

The urban transformation loan and rent allowance for apartment owners:

If you do not have extra floors, you can make the risky structure constructed to any construction company through a contract work by using ‘urban transformation loan’.

If the structure has extra floors due to construction plan, you make the building constructed to a contractor on flat for land basis and you do not need an urban transformation loan, then you may receive non-refundable rent allowance.

*The urban transformation loan and the rent allowance cannot be used simultaneously.

**When persons who do not receive loan or allowance for the risky structure wants to buy an apartment from somewhere else, they may use their rights of urban transformation loan for that apartment.

The urban transformation loan and removal allowance for renters:

Renters who document that they are renters in the risky building minimum for 1 year can benefit from the urban transformation loan when they want to buy an apartment from another place after evacuating their houses.

(The urban transformation loan can be received from the banks contracted with the Ministry and the rent & removal allowance from the Provincial Directorate of Substructure and Urban Transformation.)

The contractors;

• must have the ‘Contracting License’ issued by the Ministry of Environment and Urbanization.

• must have carried out similar projects before.

• must have the team and equipment to construct the building in the qualifications requested.

• must have sufficient capital stock to complete the building.

• must give collateral until the construction is completed.

The urban transformation loan is retained in the bank and the rights of apartment owners are guaranteed.

The process of giving the loan to the contractor is as the following:

• The creditor bank investigates the contractor.

• The bank approves the contractor or requests a replacement.

• The approved contractor demolishes the old building and begins the construction of the new building.

• The contractor applies to the bank for payment depending on the total contraction rate. Bank’s appraisal expert inspects the construction and the bank makes interim payments to the contractor in the name of the apartment owners.

The following charges are exempted for the structure subject to the urban transformation:

• Notary fee (The construction agreement to be drawn up in notary)

• All fees received by the municipality for project approval and construction license

• Trading and inheritance and succession charges

The VAT rate for the sale of real estate, which is 8% or 18%, is 1% for the buildings came under the urban transformation.

• Any kind of structures, no matter they are shanty houses, unlicensed constructions or the ones with construction servitude can be included in the urban transformation.

• Receiving earthquake risk report upon the request of one of the apartment owners in the building is enough for construction to enter into urban transformation.

• All necessary decisions can be taken with ⅔ majority in the building involved in the urban transformation.

• The renewed structures are earthquake resistant.

• The value of the renewed structures increases at least 1.5 times.

• People get a more valuable home and livable environment.

• Fixed costs decrease in the renewed buildings with heat and water insulations.

• The life of structure extends at least 60 years.

• The apartment owners may become the owner of a second home by using urban transformation loan.

• Renters may become home owners by using urban transformation loan.