Defective and Incomplete Workmanship Lawsuits in Urban Transformation Projects

What constitutes defective and incomplete workmanship in urban transformation projects? What lawsuits can be filed against contractors? How are evidence gathering, expert examination, technical specifications, compensation, free repair, price reduction, and statute of limitations applied?

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What are Defective and Incomplete Workmanship in Urban Transformation?

In urban transformation projects, defective and incomplete construction refers to the situation where a contractor fails to properly construct a building in accordance with the urban transformation contract, the contract for construction in exchange for a share of the completed building, the contract for construction in exchange for a share of the land, the technical specifications, the architectural project, the permit, the building inspection principles, and objective construction rules. This is one of the most frequent legal disputes faced by property owners after receiving their new independent units.

Incomplete workmanship refers to the failure to complete or the leaving unfinished of a task agreed upon in the contract or technical specifications. For example, the failure to construct a parking lot, the incomplete construction of common areas, the failure to deliver a working elevator, the failure to construct a fire escape according to the project, incomplete landscaping, the failure to install kitchen cabinets in a private unit, or the failure to deliver storage or ancillary areas can all be considered incomplete workmanship.

Defective workmanship refers to work that, despite existing, does not conform to the contract, technical specifications, project, permit, zoning regulations, or expected quality standards. For example, using low-quality materials, faulty waterproofing, dampness and leaks in the independent unit, peeling exterior cladding, sound and heat insulation that does not meet the technical specifications, an elevator that does not have the agreed-upon features, and problematic electrical and mechanical installations can all fall under the scope of defective workmanship.

These disputes are even more significant in urban transformation projects. This is because the old, risky building has been demolished, the property rights of the owners have been linked to independent units in the new project, and the contractor has undertaken in the contract to construct a safe, sound, and legally compliant building. The purpose of Law No. 6306 is to ensure the creation of healthy and safe living environments in accordance with engineering and architectural standards in areas at risk of disaster and in properties containing risky buildings. Therefore, defective or incomplete construction in urban transformation is not only a contractual quality issue but also a serious legal problem that undermines the goal of safe construction.

The Difference Between Defective Manufacturing and Incomplete Manufacturing

Defective manufacturing and incomplete manufacturing are closely related concepts, but they are not the same thing. This distinction is important in terms of the type of lawsuit to be filed, the amount to be claimed, the statute of limitations, proof, and expert examination.

In the case of incomplete workmanship, the contractor has either not completed or finished a job they committed to doing. For example, if the contract states that each independent unit will have the right to a covered parking space, but this is incomplete workmanship. If a generator system is agreed upon in the technical specifications, but it is not installed, this is also incomplete workmanship. Failure to complete painting, cladding, landscaping, or security systems in common areas can also be considered incomplete work.

In defective workmanship, the work has been done, but it is not of the expected quality and suitability. For example, an elevator may have been built, but it may not meet the capacity or brand standards agreed upon in the contract. The exterior facade may have been completed, but it may have started to crumble shortly afterward. Waterproofing may have been done, but the basement may be flooded. In this case, it is not the existence of the work that is questioned, but its quality and suitability.

This distinction is important in practice. Since incomplete workmanship often constitutes "undelivered work," the owner can demand the completion of the incomplete work or compensation for it. In the case of defective workmanship, however, the provisions of the Turkish Code of Obligations regarding liability for defects, inspection and notification obligations, optional rights, and statutes of limitations come into play more clearly. Liability for defects in contracts for work is regulated in Articles 474-478 of the Turkish Code of Obligations; these provisions include the owner's obligation to inspect the work after delivery and report defects within a reasonable time, as well as optional rights and statutes of limitations.

Does an Urban Transformation Agreement Take the Nature of a Construction Contract?

In urban transformation projects, contracts between contractors and property owners are often in the nature of construction contracts in exchange for land shares. This is a mixed-type contract. The contractor undertakes to construct a building; in return, the owner(s) agree to transfer a land share or an independent unit to the contractor. In this respect, the provisions of a contract for work play an important role in the agreement.

According to Article 470 of the Turkish Code of Obligations, a contract for work is a contract in which the contractor undertakes to produce a work, and the client undertakes to pay a price in return. In a construction contract in exchange for a share of the land, the work produced by the contractor is a new building; the counterparty of the owners is often not money, but the transfer of a share of the land or an independent unit.

Therefore, in cases of defective and incomplete workmanship in urban transformation projects, the provisions of the Turkish Code of Obligations (TBK) regarding contracts for work are taken as the basis. However, the dispute is not limited solely to the provisions of the TBK. Law No. 6306, its implementing regulation, zoning legislation, building inspection legislation, technical specifications, permits, architectural projects, and construction contracts in exchange for land are considered together.

What are Open and Hidden Shame?

In defective workmanship cases, it is important to determine whether the defect is obvious or hidden. An obvious defect is one that can be noticed during or shortly after delivery through a normal inspection. For example, broken tiles, missing paint, malfunctioning doors, visible cracks, missing cabinets, or incomplete common areas can be considered obvious defects.

A hidden defect is a defect that cannot be detected during a routine inspection at the time of delivery, but becomes apparent during use or over time. Problems such as faulty waterproofing, foundation and basement water leaks, roof leaks, plumbing leaks, deficiencies in heat and sound insulation, static or structural problems, and premature peeling of exterior cladding can be considered hidden defects.

Article 474 of the Turkish Code of Obligations stipulates that the employer must inspect the work as soon as possible after delivery, in accordance with the ordinary course of business, and notify the contractor of any defects within a reasonable time. Article 477 of the Turkish Code of Obligations states that the contractor is relieved of liability after the work is accepted, whether explicitly or implicitly; however, liability continues for defects that are deliberately concealed and could not be detected during a proper inspection.

Therefore, owners must exercise caution during the handover process. If the handover document includes a statement such as "I received the property complete and without defects," it may be difficult to raise any apparent defects later. Any deficiencies or defects noticed at the time of handover must be documented, recorded with photographs and videos, and a reservation of rights should be included if necessary.

Owners' Obligation to Inspect and Report Defects

In urban transformation projects, one of the most important obligations of property owners who will claim defective workmanship is to inspect their independent unit and common areas after handover and notify the contractor of any defects within a reasonable time. This notification can be made through a notarized notice or other written and verifiable means. However, in serious disputes, a notarized notice is the most reliable method.

When reporting defects, the defects must be specified concretely. General statements such as "The apartment is defective" or "The building does not conform to the contract" are insufficient. It must clearly state which deficiencies or defects exist in which independent unit, which work remains incomplete in common areas, which discrepancies exist with the technical specifications, when the defect was discovered, and what is being demanded from the contractor.

Obvious defects must be reported within a reasonable time after delivery. Hidden defects, on the other hand, must be reported to the contractor without delay as soon as they become apparent. If the client neglects the obligation to inspect and report, they risk being deemed to have accepted the work in accordance with Article 477 of the Turkish Code of Obligations.

However, each specific case is evaluated within its own context. Especially in urban transformation projects, where there are numerous independent units, common areas, technical systems, and the possibility of hidden defects, it is beneficial for property owners to have an expert technical inspection carried out immediately after handover.

Owners' Optional Rights in Case of Defective Workmanship

Article 475 of the Turkish Code of Obligations regulates the employer's optional rights in case of defective work. Accordingly, if the work is unusable or so defective that acceptance is not justifiable, the employer may choose one of the following options: to terminate the contract; to retain the work and request a price reduction proportional to the defect; or to request free repair, with all costs borne by the contractor, provided it does not require excessive expense. The employer also retains the right to claim compensation under general provisions.

In urban transformation projects, rescission of the contract may not always be a practical and feasible solution. This is because the building has been constructed on the landowners' property, the independent units may have been delivered, sales may have been made to third parties, and dismantling the structure could cause excessive damage. Article 475 of the Turkish Code of Obligations stipulates that if the work has been constructed on the property of the client and its dismantling would cause excessive damage, the right to rescission of the contract cannot be exercised.

Therefore, in urban transformation projects, lawsuits regarding defective workmanship often involve demands for free repair, price reductions proportional to the defect, recovery of the cost of incomplete and defective work, compensation, and, if necessary, performance in kind. For example, if the waterproofing is faulty, the owner may demand that the contractor remedy the problem or recover the cost of the remedy. If lower quality materials are used instead of those agreed upon in the technical specifications, the difference in value or the cost of reconstruction may be demanded.

What kinds of lawsuits can be filed in cases of defective workmanship?

In case of incomplete workmanship, the owner can first demand that the incomplete work be completed. If the contractor fails to complete the incomplete work, the owner may seek to recover the cost of the incomplete work or, through a court order, have the incomplete work completed by a third party and the expenses recovered from the contractor.

In cases of defective construction, claims are based on the contract, technical specifications, project, and delivery records. For example, if the contract promised common areas, social facilities, an indoor parking lot, storage space, or a security system but these were not constructed, the owner may demand that these deficiencies be completed in full or that the cost be compensated.

Defective construction is not limited to individual units. Deficiencies in common areas are very common in urban transformation projects. Elevators, stairs, fire systems, parking lots, roofs, exterior facades, water tanks, hydropumps, generators, landscaping, security, shelters, common facilities, and technical spaces can also be subject to lawsuits for defective construction.

In these cases, expert examination is absolutely essential. The expert compares the contract, technical specifications, permit project, architectural project, and the existing structure to determine which works are incomplete, the cost of remedying these deficiencies, and the impact of these deficiencies on the property's use value.

The Importance of the Technical Specifications in the Case

In urban transformation projects, one of the most important documents in lawsuits regarding defective and incomplete construction is the technical specification. The technical specification is the document that shows the quality and standards of construction that the contractor will undertake. The more detailed this document is, the greater the evidentiary power of the property owners when filing a lawsuit.

The technical specifications should detail the concrete class, steel standard, waterproofing, thermal and sound insulation, window and glass specifications, door brands, elevator specifications, kitchen and bathroom materials, floor coverings, exterior facade system, electrical and mechanical installations, generator, fire system, parking lot, and common areas.

If the technical specifications only contain general statements such as "first-class materials will be used," the contractor can argue in case of a dispute that "the materials I used are sufficient." Conversely, if the brand, model, technical standard, and acceptance criteria for equivalent products are clearly stated, proving defective or substandard workmanship becomes easier.

Therefore, the technical specifications must be examined thoroughly before filing a lawsuit for defective or incomplete workmanship. If technical specifications are not available, the evaluation is based on the project, permit, building inspection records, site survey, expert examination, sectoral standards, and objective quality criteria.

Why is evidence gathering important?

In urban transformation projects, gathering evidence in cases involving defective and incomplete construction is often the most important step to take before filing a lawsuit. This is because defects in construction can change over time; the contractor may later rectify some deficiencies, the owner may have renovations done during use, or the situation in common areas may change. Therefore, having the current situation determined by an expert through the court is of great importance.

In a request for evidence gathering, all defects and deficiencies in the independent unit and common areas must be concretely stated. For example, instead of saying "the building is defective," a statement such as "there is a water leak in the basement, the exterior cladding is contrary to the technical specifications, the elevator does not comply with the permit, the parking lot is incomplete, and the thermal insulation is contrary to the specifications" should be made.

The expert conducts an on-site inspection and prepares a report detailing the nature of the defects, whether they are apparent or hidden, the cost of redress, the value of incomplete work, any deviations from the technical specifications, and their impact on the building's usability. This report constitutes strong evidence in any subsequent lawsuits for compensation, repairs, price reductions, or the cost of incomplete work.

While it's possible to file a lawsuit directly without gathering evidence, a damage report provides a significant advantage to the owner, especially in technical disputes. This is because, during the litigation process, the contractor can deny the defect, argue that it stemmed from misuse, or claim that there were no defects at the time of delivery.

Expert Examination in Defective and Incomplete Manufacturing Cases

In these cases, the court usually appoints an expert panel consisting of a civil engineer, architect, mechanical engineer, electrical engineer, real estate appraiser, or technical expert. The accuracy of the expert examination directly affects the outcome of the case.

The expert must answer the following questions: What works were committed to in the contract and technical specifications? What works were actually completed? Are the completed works in accordance with the project, permit, technical specifications, and engineering and construction standards? Are there any incomplete works? Are there any defective works? Is the defect obvious or hidden? What is the cost of remedying the defect? ​​What is the cost of completing the incomplete works? Does the defect affect the use of the building? Has there been a decrease in value? Is the contractor liable?

An expert report should be challenged if it is incomplete, superficial, or contradictory. In particular, if the report has not examined the technical specifications, is based solely on observation, fails to explain the market value calculation, does not distinguish between apparent and hidden defects, or does not consider deficiencies in common areas, a supplementary report or a new expert panel should be requested.

What is the statute of limitations?

In cases of defective workmanship, the statute of limitations is of great importance. According to Article 478 of the Turkish Code of Obligations, if a contractor has produced a defective work, lawsuits filed on this ground are subject to a statute of limitations of two years for works other than immovable structures, five years for immovable structures, and twenty years if the contractor is grossly negligent, regardless of the nature of the defective work, starting from the date of delivery.

Since buildings constructed within the scope of urban transformation are considered immovable structures, the five-year period is generally relevant in cases of defective workmanship. However, if the contractor has committed gross negligence, engaged in fraudulent conduct, intentionally concealed defects, or has very serious technical irregularities, the twenty-year period may become debatable.

The statute of limitations generally begins from the date of delivery. However, in the case of hidden defects, the subsequent discovery of the defect and its prompt notification are evaluated separately. Therefore, owners must document the delivery date, the delivery receipt, the date the defect was discovered, and the date the defect was reported.

In claims for defective workmanship, the statute of limitations and legal classification should be evaluated separately according to the specific claim. If the incomplete work constitutes undelivered performance, different assessments may arise compared to defective workmanship. Therefore, before filing a lawsuit, it is necessary to correctly characterize the claim as "defect," "incomplete work," "delay," "loss of value," or "breach of contract.".

What defenses can the contractor put forward?

In cases involving defective and incomplete workmanship, contractors can make various defenses. The most common defense is that the work was accepted upon delivery and the owners did not report any defects. The contractor can rely on the phrase "received in perfect condition" if it is stated on the delivery receipt. Therefore, care should be taken when signing the delivery receipt.

The second defense is that the defect is due to misuse. For example, in the case of water leaks, plumbing malfunctions, or deteriorated coatings, the contractor might say, "the owner made repairs later" or "there was misuse." Evidence gathering and technical reports are crucial in countering this defense.

The third defense is that the defect stems from the project or the owner's instructions. According to Article 476 of the Turkish Code of Obligations, if the defect in the work arises from the owner's instructions despite the contractor's explicit warning, or from another reason attributable to the owner, the owner cannot exercise their rights arising from the defect.

The fourth defense is the statute of limitations. The contractor can argue that the time limit has expired since the date of delivery. The fifth defense is that the quality claimed in the technical specifications was not agreed upon. Therefore, clarity in the technical specifications is very important in favor of the owner.

Who can file a lawsuit for defects in common areas?

In urban transformation projects, defects can arise not only in individual units but also in common areas. Examples of defects in common areas include roofs, facades, elevators, stairs, parking lots, shelters, fire systems, water tanks, hydropumps, generators, common installations, gardens, and landscaping.

Regarding defects in common areas, the homeowners' association, site management, apartment management, or the owners themselves may need to act together. If condominium ownership has not yet been established and the building handover process is ongoing, the landowners may rely on their contractual rights. The legal standing to sue regarding defects in common areas should be determined according to the current title deed and management status of the property.

Defects in common areas have a broader impact than defects in individual independent units. For example, faulty exterior insulation can affect the energy performance and resale value of the entire building. Defective elevators or fire systems can raise concerns about life safety. Therefore, evidence gathering and expert examination should be more comprehensive in cases of defects in common areas.

What claims can be made in a lawsuit for defective or incomplete workmanship?

Property owners may make different demands depending on the specific circumstances. The most common demands are as follows:

Completing the unfinished tasks,

Free repair of defective workmanship,

Collection of payment for defective and incomplete work

Price reduction proportional to the defect

Compensation for depreciation,

Compensation for loss of rent and loss of use

The cost of having the incomplete or defective work done by a third party shall be recovered from the contractor

Compensation for non-compliance with the technical specifications

Removing hidden flaws,

Requests for termination of the contract and liquidation, if necessary.

Each claim requires separate proof. For example, in a claim for free repair, it must be shown that the defect is remediable. In a claim for a price reduction, the impact of the defect on the value of the independent unit or building must be determined. In a claim for compensation, the damage and the causal link must be proven. In a claim for incomplete work, it must be demonstrated that the incomplete work was agreed upon in the contract and was not performed.

The Most Common Mistakes in Defective Manufacturing Cases

The most common mistake made by property owners is accepting delivery of the independent unit without documenting any deficiencies in the handover report. If the handover report states that the unit was received without any deficiencies, it can make it more difficult to raise obvious defects later.

The second mistake is delaying the notification of defects. Obvious defects must be reported within the appropriate timeframe, and hidden defects as soon as they become apparent. Delay can risk the work being deemed accepted.

The third mistake is making repairs without having evidence collected. If the owner repairs the defective workmanship with their own resources, they may later have difficulty proving the existence of the defect and the cost of its repair.

The fourth mistake is failing to include the technical specifications in the lawsuit petition. Claims of defective and incomplete workmanship should be evaluated together with the contract and the technical specifications.

The fifth mistake is ignoring defects in common areas. Not only deficiencies in the individual unit but also the building's shared facilities and common areas should be examined.

The sixth mistake is the incorrect formulation of claims. Claims for defects, incomplete work, delay, loss of rent, diminished value, and termination must be distinguished from one another. Incorrect legal characterization can lead to the dismissal of the case or insufficient examination.

Documents to Prepare Before Filing a Lawsuit

Before filing a lawsuit for defective and incomplete workmanship in urban transformation projects, a comprehensive file must be prepared. This file should include the urban transformation contract, the construction contract in exchange for land share, technical specifications, architectural project, building permit, occupancy permit, independent unit allocation table, delivery records, defect notification warnings, photographic and video recordings, evidence assessment report, expert report, apartment or site management records, contractor correspondence, invoices, and repair quotations.

In addition, if there are defects in common areas, the decisions of the homeowners' association, management correspondence, photographs of common areas, and maintenance and repair reports should also be included in the file. If there is an allegation of a hidden defect, it should be specifically documented when the defect was discovered and when it was reported.

Conclusion

In urban transformation projects, lawsuits regarding defective and incomplete construction are one of the most important legal avenues for verifying whether property owners have truly received their new independent units in accordance with the contract, project, permit, and technical specifications. The demolition of a risky building eliminates the owners' previous property ownership; the urban transformation achieves its purpose only if the new building is delivered free from defects, complete, safe, and usable.

Defective workmanship refers to work that is of poor quality, faulty, or contrary to the contract. Incomplete workmanship, on the other hand, is when the work that should have been done was not done at all or was not completed. In both cases, property owners may have rights such as free repair, completion of incomplete work, price reduction proportional to the defect, compensation, loss of value, cost of incomplete work, and termination of the contract if necessary.

Owners must act diligently during delivery, document any obvious defects, report any hidden defects as soon as they are discovered, send a notarized warning, have evidence collected, include the technical specifications and projects in the file, and properly guide the expert examination. Since Articles 474-478 of the Turkish Code of Obligations contain fundamental provisions regarding liability for defects, alternative rights, acceptance, and statute of limitations, lawsuits concerning defective workmanship should be conducted within this framework.

In conclusion, defective and incomplete workmanship in urban transformation projects is not merely an aesthetic or quality issue. This problem directly affects the property owners' rights, usage rights, the value of their individual units, the safety of common areas, and the long-term durability of the building. Therefore, property owners who encounter defective and incomplete workmanship should immediately submit written notification, gather technical evidence, and, if necessary, file a lawsuit against the contractor.