Construction Contract in Exchange for Land Share

A right encompasses all the powers granted to individuals as regulated by legal norms. Different powers and rights can arise for the parties involved in a debt relationship. These rights may apply to one or both parties, depending on the type of debt relationship. Since the aim of a debt contract is to obtain powers protected by the legal order, these rights will arise through a corresponding declaration of intent.

Contract for Work

A contract for work is a typical contract we frequently encounter in all areas of our lives. To put it simply, a contract for work is formed by the declaration of two healthy and harmonious intentions. There are two parties in a contract for work: the contractor and the client. The contractor undertakes the obligation to "create and deliver the work." The contractor and the client must agree and concur on all terms. A common misconception is that while a contract for work is naturally for a fee, if this fee is agreed upon between the contractor and the client as a share of the land, then of a construction contract in exchange for a share of the building will apply, not a contract for work.

Construction Contract in Exchange for Land Share

The Turkish Code of Obligations contains typically defined types of contracts. However, the Construction Contract in Exchange for Shares, which is a mixed type of contract, is not one of these typical contracts. This atypical type of contract is not explicitly defined in the law in terms of its literal meaning. Looking at its legal framework, Article 26 of the Turkish Code of Obligations, under the provision of Freedom of Contract, leaves the formation and determination of the terms of a contract to the free will of individuals. This is the primary legal basis for the formation of a Construction Contract in Exchange for Shares.

Parties to the Construction Contract in Exchange for Land Share

In a Construction Contract in Exchange for Land Shares, one party to the contract is the Contractor, while the other party is the Land Share Holder. The Land Share Holder is the person who undertakes to transfer their land shares as payment for the independent units to be transferred to them in the building to be constructed. This person can be a natural person or a private or public legal entity.

The contractor can be a natural or legal person, or a business partnership consisting of more than one contractor can be a party to this contract.

Landowner's Contractual Obligations

The parties have rights and obligations arising from the contract. If you are the landowner and you are entering into a Construction Contract in Exchange for Land Shares, you will have the obligation to deliver the land, to grant power of attorney for the construction, and to transfer the land shares.

Contractor's Obligations Arising from the Contract

It would be accurate to examine the contractor's obligation in terms of two main responsibilities: construction and delivery.

Situation where the contractor fails to deliver the construction on time

Generally, the construction completion date is agreed upon in a contract between the landowner and the contractor. If the construction is not completed and delivered to the landowner by the agreed deadline, the first step is to send a notice to the contractor stating which of the legal rights the landowner wishes to exercise. If the contractor fails to deliver the construction on time, i.e., defaults, the landowner may demand specific performance, waive specific performance and compensation for positive damages, or terminate the contract.

You can obtain further information on this matter by consulting with our firm's experienced lawyers.

Trainee Lawyer Canan Tilaver