One of the most common disputes in construction contracts based on land exchange is when the contractor has completed the building and handed over the keys to the landowner but has not obtained the occupancy permit. In this case, questions such as "Is the apartment considered delivered?", "Does the delivery period stop?", "Does the contractor continue to pay delay compensation?", and "Is the landowner obliged to transfer the remaining title deeds to the contractor?" become particularly important.

Whether an apartment is considered delivered before the occupancy permit is obtained cannot be determined solely by looking at the handover of the keys. First, the terms of the construction contract in exchange for a share of the completed building must be examined. If the contract stipulates that delivery is conditional on obtaining the building occupancy permit, then the contractor handing over the keys or the landowner actually starting to use the apartment may not, as a rule, be sufficient for delivery in accordance with the contract.

Especially if the contract includes phrases such as "delivery with occupancy permit," "delivery upon obtaining the building occupancy permit," "turnkey," or similar expressions, the contractor's obligation to obtain the building occupancy permit can be considered part of the delivery obligation. In the practice of the Supreme Court, it is also accepted that in cases where the contract ties delivery to the condition of occupancy, the landowner's actual commencement of using the apartment may not, by itself, relieve the contractor of the delivery obligation.

Therefore, "I handed over the keys, the handover is now complete" is not correct for every construction contract in exchange for a share of the completed building.

What is settlement?

The document commonly known as "occupancy permit" is, in legal and technical terms, a building occupancy permit.

After the building is completed in accordance with the permit and its annexes, and upon fulfillment of the necessary conditions for use, the relevant authority issues an occupancy permit. Obtaining an occupancy permit is a different stage from simply completing the construction physically.

Therefore, an apartment building;

the walls are completed, the doors are installed, the electrical system is working, and the keys to the apartments have been handed over,

This alone does not mean that all legal and administrative processes for the structure have been completed.

In a construction contract based on a share of the completed building, the contractor may undertake not only to construct a physical building but also, depending on the scope of the contract, to deliver a legally usable structure with all necessary permits completed

Does handing over the apartment keys legally constitute delivery of the property?

Turnkey delivery is an important indicator, but it is not sufficient on its own in every case.

In terms of contracts for work, delivery may mean placing the completed work under the client's control. However, in construction contracts based on a share of the completed building, it is possible for the parties to agree on specific terms regarding delivery.

For example, in the contract;

"The independent units belonging to the landowner will be delivered with occupancy permits obtained, all utilities ready to be connected, and in a turnkey condition."

If such a provision exists, it is difficult to say that the delivery obligation in the contract has been fully fulfilled merely by handing over the keys.

Here, actual delivery and complete delivery in accordance with the contract .

The landowner may have moved into the apartment, moved their belongings, and even lived there for a while. However, if the contractor has not fulfilled their obligation to obtain the occupancy permit, as explicitly stated in the contract, their contractual obligation may continue.

What happens if the contract states "Delivery will be made after obtaining the occupancy permit"?

In this case, the legal assessment is clearer.

If the parties have explicitly made delivery conditional on obtaining the building occupancy permit, the contractor, as a rule, shall not deliver the building before obtaining the occupancy permit;

"I handed over the apartment and fulfilled all my obligations."

He cannot say that.

In the practice of the Supreme Court, there are decisions that consider the contractor's obligations to be fulfilled if the contract stipulates that obtaining the occupancy permit is among the obligations of the contractor and delivery is conditional on obtaining the occupancy permit. Even the fact that the landowner has resided in the independent unit for a period of time has not been considered an obstacle to this conclusion.

In this case, whether the contractor exceeded the delivery deadline stipulated in the contract can also be assessed by considering the date the occupancy permit was obtained.

Does the term "Turnkey" also include occupancy permits?

One of the frequently used expressions in construction contracts based on land exchange is "turnkey".

The contract states that;

"The contractor will deliver the building to the landowner on a turnkey basis."

The ruling may be as follows:.

While the scope of the turnkey concept is evaluated according to the contract as a whole, in the practice of the Supreme Court, it is accepted that the turnkey commitment may also include obtaining the building occupancy permit

Therefore, it should not be assumed that a contractor whose contract includes the phrase "turnkey" is absolved of all obligations simply by completing the physical construction and handing over the keys.

Especially;

Obtaining the building occupancy permit, completing the common areas, finishing the necessary technical procedures, and fulfilling other delivery conditions specified in the contract

This should also be examined.

What happens if the contract contains no provisions regarding resettlement?

This is the situation that needs the most careful consideration.

If a construction contract in exchange for a share of the completed building does not contain any explicit provision regarding obtaining an occupancy permit, automatically concluding that "no occupancy permit means no handover will take place" may not be accurate in every case

In this situation;

The entire contract, what the parties understand by "delivery," whether the contractor has undertaken the licensing and municipal procedures, whether the building has been physically completed, and why the occupancy permit has not been obtained

They should be evaluated together.

Therefore, in cases where the contract does not contain explicit provisions regarding occupancy permits, the actual handover and the contractor's remaining contractual obligations can be separated.

For example, the apartment may have been effectively left to the landowner; however, obtaining the occupancy permit may still remain an unfulfilled obligation of the contractor arising from the contract.

Does occupancy in an apartment that has not yet received an occupancy permit constitute handover?

Not in every situation, on its own.

The fact that the landowner has moved into the apartment is an important event. However, especially if the contract explicitly stipulates that delivery is conditional on occupancy, the landowner's commencement of using the apartment is the contractor's responsibility;

"The delivery has now been completed, my responsibility for the delay has ended."

That alone might not be enough for him to say that.

In the Supreme Court's practice, in a dispute where the contract makes occupancy a part of the delivery, the fact that the landowners have resided in the building for a certain period has not been accepted as delivery.

This is because the parties have defined the concept of delivery in the contract in a broader sense than just ordinary physical delivery.

What happens if the handover report is signed before the occupancy permit is obtained?

The content of the delivery receipt is extremely important.

The landowner;

“I received the independent unit complete, without any defects, with occupancy permit, and in full compliance with the contract. I have no rights or claims against the contractor.”

If he signs such a comprehensive document, he may face serious problems with proof and interpretation in the future.

Conversely, if the occupancy permit has not yet been obtained, this should be clearly stated in the handover report;

“The independent unit has been physically handed over, and the contractor's obligations regarding obtaining the occupancy permit remain in effect. We reserve all rights to claims and lawsuits arising from the failure to obtain the occupancy permit and the delayed delivery.”

Adding such a reservation could clarify the landowner's legal situation.

Therefore, the landowner needs to be careful not only when receiving the keys, but also when signing the handover document.

Does Failure to Obtain an Occupancy Permit Constitute Default by the Contractor?

If the contract includes the delivery obligation to obtain the occupancy permit and the agreed delivery period has passed, the contractor may be in default.

For example, the parties;

“The contractor shall complete the construction within 24 months of obtaining the building permit and deliver the independent units after obtaining the occupancy permit.”

They may have agreed on this.

After twenty-four months;

if the construction is physically finished, the keys have been handed over but the occupancy permit has not been obtained

It may not be accepted that the contractor has fully fulfilled their delivery obligation.

In such a situation, clauses regarding delay in the contract, penalty claims, and compensation claims may arise.

Does the delay compensation continue as long as the occupancy permit is not obtained?

The content of the contract is decisive in this matter.

If delivery is explicitly conditional on obtaining an occupancy permit, and the contractor has not obtained the occupancy permit within the stipulated time, the landowner may claim that the delivery has been delayed.

The contract states that;

A penalty fee is stipulated for each month of delay

current rental price,

or other delay compensation

It may have been decided.

In this case, even if the contractor has handed over the keys to the apartment to the landowner, if the full delivery has not been completed as per the contract, the date until which the delay damages continue will be assessed separately.

However, whether there is a genuine loss of rent due to the landowner actually using the apartment and the penalty clause agreed upon in the contract are different legal claims.

Therefore, when calculating damages, it is essential to clearly identify which claim is being made.

Can the landowner claim compensation for lost rent if they are living in the apartment?

This matter deserves particular careful consideration.

If the apartment has been effectively given to the landowner for their use and the landowner resides there;

"The apartment was never handed over to me, so I have lost rent for the entire period."

This claim may not be accepted in every case.

Because the landowner is actually using the property.

However, the legal situation may be different if the contract stipulates a penalty clause in case of delay, regardless of the amount of damage.

Furthermore, if the lack of a habitation permit has resulted in a tangible loss in the economic or legal use of the property, the nature of this loss may be assessed separately.

Therefore, there is no general rule that "if there is no occupancy permit, monthly rent must be collected."

Can the contractor request the transfer of the final land shares before obtaining the occupancy permit?

In construction contracts based on land exchange, one of the most important security measures for landowners is tying certain title deeds belonging to the contractor to specific stages of construction or obtaining the occupancy permit.

For example, in the contract;

“The title deeds for the last two independent units belonging to the contractor will be transferred after the building occupancy permit is obtained.”

The ruling may be as follows:.

In such a situation, the contractor may have difficulty requesting the transfer of the final title deeds before obtaining the occupancy permit.

In the practice of the Supreme Court of Appeals, there are decisions that accept that in cases where the contractor fails to fulfill its obligation to deliver the property with an occupancy permit, the party has not yet acquired the right to claim the property specified as counter-performance in the contract.

Therefore, making the final title transfer conditional on the issuance of an occupancy permitbuilding can be an important contractual guarantee for landowners.

Who is required to obtain the Building Occupancy Permit?

The contract should be examined first.

In a significant portion of construction contracts in exchange for a share of the completed building;

The responsibility for obtaining the project permit, municipal documents, and occupancy permit rests with the contractor.

If such a provision exists, the contractor;

"The building is finished; now it's up to the landowner to obtain the occupancy permit."

He cannot unilaterally absolve himself of his obligation by saying this.

However, the situation is different if there is a procedure that the landowner needs to complete in order to obtain the occupancy permit.

For example, if the landowner's failure to sign a required document or to perform a legal action without a valid reason hinders the occupancy permit process, it may not be possible to place the entire blame for the delay on the contractor.

What happens if the occupancy permit cannot be obtained due to the contractor's fault?

In practice, one of the most important reasons for not being able to obtain a building occupancy permit is that the construction has not been carried out in accordance with the permit and approved project.

For example, a contractor;

The contractor may have added extra areas contrary to the project, altered common areas, created independent sections without a permit, or left behind technical irregularities that need to be rectified.

Therefore, if a building occupancy permit cannot be obtained from the municipality, the contractor's responsibility may become more severe.

In this situation, the landowner can first request that the irregularity be rectified and the structure be made suitable for obtaining an occupancy permit.

If remedying the breach is impossible or has become excessively difficult, compensation and other legal options should be considered separately, depending on the nature of the contract.

What happens if an occupancy permit cannot be obtained due to the fault of the landowner?

Not every occupancy delay is the responsibility of the contractor.

For example, there may be specific procedures that the landowner must follow in order to obtain a building occupancy permit.

The landowner;

if they do not provide the necessary document, refuse to sign the mandatory form, or obstruct the occupancy permit process due to a change that contradicts their own project

It may not be possible to hold the contractor fully responsible for the delay.

Therefore, simply not having received an occupancy permit is not sufficient.

The reasons why the occupancy permit could not be obtained must be thoroughly investigated.

Who is responsible if the occupancy permit is delayed due to incomplete procedures at the municipality?

Contractor;

"The municipality has prolonged the process."

It can withstand the defense.

However, the first step should be to investigate whether the contractor has completed all their assigned tasks on time.

For example, if the documents requested by the municipality are submitted six months late, it may not be fair to blame the delay on the administration.

Conversely, if the contractor has submitted all documents and projects completely, fulfilled all their responsibilities, and the delay is entirely due to administrative processes, then responsibility may be assessed differently.

Is Failure to Obtain an Occupancy Permit Considered a Defective Performance?

In this matter, each case should be legally classified according to its specific characteristics.

The inability to obtain a building occupancy permit, especially if the reason is construction that deviates from the permit or project specifications, may indicate that the contractor has not completed the work in accordance with the contract.

For example, the structure;

differing from the architectural project, having technical deficiencies, or being in violation of the permit

If a building permit cannot be obtained due to a missing document, it is not simply a matter of "missing paperwork".

The landowner may have been handed over a legally problematic structure.

In this situation, remedies for the breach, compensation for damages, and other contractual rights may arise depending on the severity of the incident.

Is it possible to switch to condominium ownership without obtaining an occupancy permit?

Condominium ownership, apartment ownership, and building occupancy permits are related but distinct legal concepts.

In a construction contract based on a share of the completed building, the contractor's obligations may not be limited solely to the physical delivery of the apartments. The contract may also stipulate that the contractor is responsible for the transition to condominium ownership, the creation of individual title deeds, or the completion of related procedures.

Because;

"I can use the apartment, which means all the title deed and occupancy permit procedures have been completed."

It should not be thought of in this way.

The landowner should also check the status of municipal and land registry records during the handover process.

Is the landowner obligated to take possession of an apartment that has not yet received its occupancy permit?

If the contract explicitly stipulates delivery with an occupancy permit, the landowner is, as a rule, not obligated to accept the contractor's offer of delivery without an occupancy permit, which is contrary to the contract, as full and proper performance.

However, in every case, avoiding taking the apartment key might not be the best approach.

For example, when the landowner actually takes delivery of the apartment, they will record the following in the minutes;

"Since the building occupancy permit has not yet been obtained, our rights regarding the contractor's obligations arising from the contract, including occupancy permit, delays, and all other liabilities, are reserved."

They may raise objections in this way.

Depending on the specific circumstances of the case, it may be possible to accept actual delivery while reserving legal rights.

How can a landowner check if an occupancy permit has been obtained?

The landowner should not rely solely on the contractor's verbal statement.

You can check with the relevant municipality or authorized authority whether a building occupancy permit has been issued.

Moreover;

building permit, final approved architectural project, renovation projects and any deficiencies reported during the occupancy permit application process

It can be examined.

Contractor;

"The housing application has been submitted, it will be processed in a few days."

If this is stated, its accuracy should be checked against the administrative file.

How can the reason for not obtaining an occupancy permit be determined?

In housing disputes, simply identifying the missing document is often not enough.

The real question is this:

Why was the occupancy permit not obtained?

From where;

Is it simply an incomplete bureaucratic process, missing common areas, construction contrary to the contract, manufacturing contrary to the permit, or an obstacle caused by the landowner?

This distinction is important for determining the contractor's liability.

If necessary, an inspection should be carried out through the municipality's records and building technical experts.

What should a landowner do if an apartment is delivered before the occupancy permit is obtained?

While the course of action a landowner should follow varies depending on the specifics of the case, the following points are generally important:

1. The delivery clause in the construction contract in exchange for a share of the completed building should be examined.
2. It must be determined who is responsible for resettlement.
3. It should be checked whether the building has an occupancy permit from the municipality.
4. The reasons why the occupancy permit could not be obtained should be investigated.
5. The building's compliance with the permit and project plans must be checked.
6. If the deficiency is due to the contractor, a written warning should be sent.
7. If an actual handover is to take place, an explicit reservation regarding settlement should be included in the handover report.
8. If the contract includes a penalty for delay or rent compensation, the delivery date should be determined accordingly.
9. It should be checked whether the final transfer of title to the contractor is contingent upon obtaining an occupancy permit.
10. In cases where the inability to obtain an occupancy permit stems from a structural or legal anomaly, compensation and other legal rights should be considered.

Frequently Asked Questions

If the keys are handed over before the occupancy permit is obtained, is the apartment considered delivered?

Not in every case. Especially if the contract specifies a handover condition or requires occupancy permit, simply handing over the keys may not mean that the contractor has fulfilled all their delivery obligations.

If the landowner is living in an apartment without an occupancy permit, would the handover be considered complete?

Actual use is an important factor in terms of delivery. However, if the contract explicitly conditions delivery on occupancy, the mere fact that the landowner lives in the apartment may not be sufficient for a complete and contractually compliant delivery.

If there is a "turnkey" contract, is the contractor obligated to obtain the occupancy permit?

While the entire contract is considered, the Supreme Court's practice accepts that the turnkey obligation may also include obtaining the building occupancy permit.

If the occupancy permit hasn't been obtained, can the contractor request the final title deed?

If the contract stipulates that the transfer of title deeds is conditional upon obtaining an occupancy permit, the contractor may have difficulty requesting the transfer of title deeds before this condition is met. There are examples in the Supreme Court's rulings where it has been accepted that a contractor who has not fulfilled the obligation to deliver with an occupancy permit cannot yet demand the counter-performance.

Will a delay penalty apply as long as the occupancy permit is not obtained?

This is evaluated according to the delivery and penalty clauses in the contract. If delivery is conditional on occupancy, the contractor may argue that the delay is ongoing.

Is the landowner required to obtain the building occupancy permit themselves?

First, the contract must be examined. If the responsibility for obtaining the occupancy permit has been given to the contractor, the contractor cannot unilaterally impose this responsibility on the landowner.

What can be done if the reason for not obtaining an occupancy permit is due to deviations from the project plan?

The contractor may be required to rectify any discrepancies with the project and permit before obtaining the occupancy permit. Additionally, any resulting damages and other rights arising from the contract may be assessed separately.

If I take possession of an apartment without an occupancy permit, will I lose my rights?

Not in every case. However, the content of the handover document is important. Explicitly reserving rights regarding settlement and delays can be crucial in preventing future disputes.

Conclusion

To determine whether an apartment is considered delivered before the occupancy permit is obtained, the delivery clauses of the construction contract in exchange for a share of the completed building must first be examined.

the contract explicitly stipulates that the independent units will be delivered upon obtaining an occupancy permit, the mere physical completion of the construction and the handover of the keys to the landowner does not, as a rule, mean that the contractor has fulfilled all delivery obligations. In the practice of the Supreme Court, there are examples where, even the actual use of the apartment by the landowner is not considered complete delivery, even when delivery is conditional on occupancy.

Similarly, "turnkey" is used in the contract, it can be assumed that obtaining the occupancy permit for the building is also included within the scope of this obligation.

However, if the contract contains no provisions regarding occupancy permits, it should not be automatically concluded in every case that "no occupancy permit, no handover." In such a case, the parties' intentions in the contract, the administrative procedures undertaken by the contractor, the actual condition of the building, and the reasons why the occupancy permit could not be obtained should be evaluated together.

In particular, actual delivery and complete delivery in accordance with the contract . While the landowner receiving the keys or beginning to use the apartment may have certain legal consequences, the contractor may still have obligations such as obtaining occupancy permits, ensuring compliance with the project, completing incomplete work, or other contractual responsibilities.

The reason for the occupancy permit not being obtained is also of great importance. If the contractor has constructed the building in violation of the permit or approved project, and therefore an occupancy permit cannot be obtained, the landowner can demand that the violations be rectified and the building be brought into compliance. Claims for compensation for the resulting delays and damages, or for penalties stipulated in the contract, may also arise.

In construction contracts where the transfer of the final land shares or the final independent units to be left to the contractor is conditional on obtaining an occupancy permit, it is particularly important that the landowner does not cancel this guarantee before the occupancy permit is obtained.

In conclusion, the handover of keys to an apartment without an occupancy permit does not, in all cases, mean that the contractor has fully and completely fulfilled the contract. To determine the landowner's rights, the delivery clause in the contract, the obligation to obtain an occupancy permit, the actual usage status, the reason for the delay, and any penalty clauses must be considered together.