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Why is a Power of Attorney Important in Urban Transformation?

In urban transformation projects, conducting transactions through power of attorney is a very common practice, especially in apartment buildings with multiple owners, inherited properties, with owners living abroad, with elderly or ill owners, and with individuals who cannot physically manage the property. The process of identifying risky buildings, applying to municipalities and administrations, meeting with contractors, signing construction contracts in exchange for land, applying for rental assistance, title deed transactions, transferring land shares, establishing condominium ownership, the building permit process, and occupancy and handover procedures often consist of technically complex and intricate processes that owners cannot personally handle.

Therefore, the property owner can authorize a trusted person or lawyer to handle the urban transformation process. However, a power of attorney in urban transformation is not an ordinary representation document. With this power of attorney, transactions with potentially very serious consequences can be carried out on behalf of the property owner. The agent can sign contracts, apply to the administration, attend meetings, enter into agreements with contractors, receive rental assistance, conduct transactions at the land registry, and even, if explicitly and specifically authorized, carry out transactions such as the transfer or sale of land shares.

Therefore, when preparing a power of attorney for urban transformation projects, the most important issue is ensuring that the scope of the authority is clearly defined, limited, verifiable, and protects the property owner's interests. According to the Turkish Code of Obligations, a power of attorney is a contract in which the agent undertakes to perform a task or transaction for the principal; the agent is obligated to act with loyalty and diligence, safeguarding the legitimate interests of the principal. Furthermore, the agent is required to account for the work performed upon the principal's request and to deliver to the principal any receipts received in connection with the power of attorney.

Which procedures in urban transformation can be carried out with a power of attorney?

In the urban transformation process, many transactions can be carried out through an agent. The property owner can authorize their agent to conduct transactions with the municipality, land registry office, Urban Transformation Directorate, Provincial Directorate of Environment, Urbanization and Climate Change, notary public, building inspection organizations, contractors, and other official institutions.

The main transactions that can be carried out through an agent are as follows:

To apply for a risk assessment of a building,

Receiving notifications regarding the risky building report

To object to or withdraw an objection to a risk assessment of a building,

Obtaining documents from the municipality and relevant authorities

Attending meetings and voting on behalf of the owner,

Signing urban transformation decision documents,

Meeting with contractors,

To negotiate a construction contract or preliminary agreement in exchange for a share of the completed building

Sending or receiving a notice from a notary public,

To apply for rental assistance,

Obtaining land registry records,

To follow up on easement and condominium ownership transactions

To submit administrative applications related to building permits and occupancy permits

To file lawsuits or to follow up on existing lawsuits,

If explicitly authorized, to carry out title deed transactions such as land share transfer, sale, mortgage, division, abandonment, creation of new land, and similar procedures.

However, not all of these transactions are the same. Some transactions are simple follow-up and application processes, while others are disposition transactions that directly affect the ownership structure of the real estate. In particular, for transactions such as the sale of real estate, transfer of land shares, establishment of mortgages, donation, settlement, waiver, release, filing a lawsuit, transfer of title deed, and construction contracts in exchange for a share of the property, the power of attorney must contain specific and explicit authorization. The Turkish Code of Obligations explicitly stipulates that an agent cannot transfer real estate or restrict it with a right unless specifically authorized to do so.

Is a General Power of Attorney Sufficient?

One of the most common mistakes in urban transformation is the belief that all kinds of transactions can be carried out with a general power of attorney. A general power of attorney may grant the agent certain powers of follow-up and representation; however, it is often insufficient for transactions that involve the disposition of real estate.

For example, a general statement such as "authorized to handle my affairs in official institutions" does not grant the agent the authority to sell real estate, transfer land shares, transfer title deeds in favor of a contractor, or establish a mortgage on behalf of the owner. Land registry offices require clear and specific authorization in power of attorney documents for transactions affecting real estate, such as sales, transfers, and mortgages. It is particularly emphasized in practice that the authorization must be clearly and explicitly stated in land registry transactions; otherwise, the power of attorney may not be accepted.

Therefore, when preparing a power of attorney for urban transformation projects, broad and vague expressions such as "authorized to perform all kinds of transactions" should be avoided. Instead, the specific transactions the agent can perform should be clearly stated. If the owner only wishes to grant the authority to attend meetings and handle documents, the power of attorney should be limited accordingly. If the owner wishes to grant the authority to transfer land shares or perform title deed transactions, this authority should be clearly defined, specifying the property information and, if possible, limiting the terms of the transaction.

Transactions Requiring Special Authorization in a Power of Attorney

The most important aspect to consider in an urban transformation power of attorney is the specific authorization. This is because the agent cannot perform certain serious legal actions without this specific authorization. The main actions requiring specific authorization in urban transformation projects are as follows:

Real estate sale,

Transfer of land share,

Transfer of title deed in favor of the contractor,

Signing a construction contract in exchange for a share of the completed building

Making a promise to sell real estate or a construction contract in the form of an arrangement,

Establishment of a mortgage,

Establishing a real right on immovable property,

Transactions of abandonment, creation, unification, subdivision, and partition

Establishment of floor easement and condominium ownership,

Forgiveness,

Settlement, waiver, acceptance, and release

Filing a lawsuit and waiving a lawsuit,

Rent assistance or payment collection,

Receiving money into a bank account,

Obtaining payment or security from the contractor,

Receiving or returning the letter of guarantee.

Which of these powers will be granted should be determined according to the owner's will. It is not correct to include all powers in every urban transformation power of attorney. Powers such as sale, transfer, mortgage, settlement, release, and waiver should be granted with particular care. Even if the agent is a trustworthy person, the owner must know which transaction they are authorizing.

Should property information be included in an Urban Transformation Power of Attorney?

Yes. In an urban transformation power of attorney, if possible, the province, district, neighborhood, block, parcel number, independent section number, and land share of the property should be clearly stated. This clarifies which property the power of attorney is for and limits the attorney's authority.

For example, if the owner only wants to grant power of attorney for a property located in a specific block and plot in Kadıköy district of Istanbul province, that property must be clearly specified in the power of attorney. Otherwise, a broadly worded power of attorney may allow the agent to act on behalf of the owner in other properties as well.

Clearly stating the property information in an urban transformation power of attorney provides security for both the owner and the agent. The owner knows the limits of their authority. The agent knows which properties they can process. The land registry office and other administrations can also more easily assess the scope of the power of attorney.

Power of Attorney for Contractor Agreement

In urban transformation projects, one of the areas where property owners face the most risk is the contractor contract. Construction contracts based on land share or building in exchange for a share of the building are contracts that carry serious consequences for the property owner. With this contract, the property owner accepts terms relating to the demolition of the old building, the construction of a new building, the transfer of certain independent units to the contractor, the transfer of land share, delivery time, rental assistance, technical specifications, and title deed procedures.

Therefore, if an agent is to be authorized to sign a contractor's contract, this authorization must be explicitly stated in the power of attorney. However, merely stating "authorized to sign a contract with a contractor" does not provide sufficient protection for the property owner. The power of attorney must specify which property the contract is for, whether it is a construction contract in exchange for a share of the land or a construction contract in exchange for a share of the land, whether a transfer of land share is involved, and under what conditions the agent can sign.

If the owner does not wish to grant the agent complete freedom to sign contracts, they may add restrictions to the power of attorney. For example, conditions such as "provided that a bank guarantee letter is obtained in favor of the owner," "provided that the transfer of title is done in stages," "the final transfer cannot be made before the building occupancy permit is obtained," and "provided that there is a provision for rental assistance and late payment penalties" can be added to the power of attorney or to a separate instruction/protocol.

Power of Attorney for Title Deed Transfer and Land Share Transfer

In urban transformation projects, property transfer is one of the riskiest transactions. If land shares are transferred to the contractor prematurely, the most important safeguard for the property owners may disappear. If the contractor abandons the project, goes bankrupt, sells the shares to third parties, or delays the construction, it becomes difficult for the property owners to reclaim their rights.

Therefore, great care must be taken when granting authority to a representative for the transfer of land shares or the sale of title deeds. The following points must be clearly stipulated in the power of attorney:

For which property was the transfer authorization granted?

To which person or company the transfer can be made,

Whether the transaction was a sale, a contract for a share of the completed building, or a barter,

Transfer price or reason for transfer,

Whether or not a phased handover will be carried out,

Adherence to stages such as licensing, foundation, rough construction, and occupancy permit,

Whether the transfer can be made without collateral,

Whether a representative can act on their own behalf or on behalf of their relatives,

Whether or not the sale of contractor shares to third parties has been approved.

Since the sale and transfer of immovable property, in particular, are among the transactions requiring special authorization under the Turkish Code of Obligations, this authorization must be explicitly stated in the power of attorney.

Attending Meetings on Urban Transformation with a Proxy

In urban transformation projects, it is not mandatory for property owners to attend meetings in person. Owners can participate in the meeting through a representative and be represented in the decision-making process. However, for the representative to be able to vote at the meeting, their power of attorney must include authorization to do so.

Attending the meeting through a proxy is particularly important if there are many owners, heirs, or individuals living abroad in the apartment building. However, the crucial point here is how the proxy will vote. The owner can give explicit instructions to the proxy. For example, instructions such as "vote in favor of this contractor's offer," "do not approve the transfer of land shares," or "do not sign the contract draft without seeing it" should be put in writing.

According to Article 505 of the Turkish Code of Obligations, an agent is obligated to comply with the explicit instructions of the principal; if they deviate from these instructions, they cannot be considered to have properly fulfilled their agency obligations unless they compensate for the resulting damages. Therefore, the owner should not leave the instructions given to the agent verbally; they should make them verifiable through written instructions, email, protocol, or a separate internal regulation.

Power of Attorney for Owners Who Do Not Agree with the Decision During the Share Sale Process

Under Law No. 6306, the sale of land shares belonging to owners who do not participate in a decision made by a simple majority of shareholders in proportion to their shares may come into question. In this process, a power of attorney is important both for representing the majority owners and for protecting the rights of owners who did not participate in the decision.

With the regulatory changes in 2026, the procedures regarding decision-making, share sales, and title deed applications in urban transformation have been made more detailed. It is stated that the changes published in the Official Gazette dated February 4, 2026, and numbered 33158, have significant consequences in terms of decision-making, share sales, title deed applications, and transfer of development rights.

If the share sale process is to be conducted through an agent, the power of attorney must clearly state the rights granted to the agent, including the application for share sale, preparation of the sale file, receipt of the valuation report, participation in the auction, bidding, purchase, payment, and title registration procedures. If a dissenting shareholder wishes to object through an agent, the power of attorney must include the authority to file administrative appeals, initiate legal proceedings, request a stay of execution, present evidence, and receive notifications.

Granting Power of Attorney on Behalf of the Heirs

In urban transformation projects involving inherited properties, power of attorney is of particular importance. If the owner has passed away, the heirs may jointly own the property. In this case, for a single heir to act on behalf of the other heirs, they must obtain a valid power of attorney from all of them.

Heirs usually appoint one person from among themselves as a representative. However, the idea of ​​"let a family member handle it" is not legally sufficient. Since transactions such as signing contracts, transferring title deeds, providing rental assistance, selling land shares, and establishing condominium ownership in urban transformation projects have serious consequences, the scope of powers of attorney must be clearly defined.

If one of the heirs is abroad, in most cases, an apostille, consular certification, sworn translation, and notary certification are required for a power of attorney issued in a foreign country to be used in Türkiye. The power of attorney must clearly state information about the real estate, urban transformation procedures, title deed transactions, and legal powers granted.

If one of the heirs is a minor or has limited legal capacity, the authority of the guardian, trustee, or conservator must be examined separately. Court permission may be required for some disposition transactions. Therefore, before drawing up a power of attorney for inherited real estate, the inheritance certificate, land registry records, inheritance shares, power of representation, and any guardianship decisions must be checked.

Power of Attorney Documents Issued Abroad

It is very common for property owners living abroad to grant power of attorney during urban transformation processes. However, attention must be paid to the formal requirements for foreign powers of attorney to be validly used in Türkiye.

A power of attorney drawn up abroad can be prepared at a Turkish consulate. In this case, there are generally fewer problems regarding its usability in Türkiye. For powers of attorney prepared before a foreign notary, it is important to know whether the relevant country is a signatory to the apostille system, whether there is an apostille certificate, a sworn translation, and notarization.

Foreign powers of attorney must include a Turkish text or an accurate sworn translation. Information regarding real estate, title deed transactions, land share transfer, contractor agreements, legal authority, rental assistance, and official institution procedures must be clearly stated. General powers of attorney issued in foreign countries may be insufficient for title deed or notary transactions in Türkiye.

Abuse of Power of Attorney

Abuse of power of attorney is a serious risk in urban transformation projects. An agent acting on behalf of a property owner is obligated to protect their interests. However, in practice, it is possible for an agent to collude with a contractor against the property owner, sell the property at a low price, transfer land shares prematurely, appropriate rental assistance for themselves, fail to return guarantees, accept contract terms detrimental to the property owner, or vote against the property owner's instructions.

According to Article 506 of the Turkish Code of Obligations, the agent is obligated to act with loyalty and due diligence; the liability arising from the agent's duty of diligence is based on the conduct that a prudent agent working in a similar field should demonstrate. Furthermore, according to Article 508 of the Turkish Code of Obligations, the agent is obligated to account for their actions and to deliver to the principal anything received in connection with the agency.

In case of abuse of power of attorney, the owner may resort to the following legal remedies:

Dismissal of the deputy,

Cancellation or revocation of the power of attorney,

If the title deed transaction has been completed, a lawsuit for cancellation and registration of the title deed

Compensation lawsuit,

The case of accountability,

Unjust enrichment or debt collection lawsuit,

If the contractor or a third party acted maliciously, a lawsuit can be filed against them

Criminal complaint if necessary.

Each case must be evaluated on its own merits. Did the agent have the authority? Did they exceed their authority? Did the property owner give explicit instructions? Did the contractor or third party know of the agent's bad faith? Was the transfer of title for consideration? Did the property owner suffer any damages? These questions determine the nature of the case.

How Should a Power of Attorney Be Restricted?

In urban transformation projects, property owners need to consciously limit the scope of their power of attorney to protect themselves. The power of attorney should not be excessively broad. The following limitations could be considered in particular:

The power of attorney should only be valid for the specific plot of land.

The power of attorney should be limited solely to urban transformation projects.

The authority to transfer title deeds should be subject to phased conditions.

The contractor's name or contract terms must be specified.

The authorization to sell/transfer should be subject to a price or security deposit.

An agent should be prohibited from conducting transactions in their own name, or in the name of their spouse, relatives, or related companies.

Rent assistance and the authority to collect rent should be regulated separately.

The authority to return letters of guarantee should be clearly limited.

The powers to file lawsuits, settle disputes, waive claims, and release debts must be granted carefully.

A limited power of attorney can be drawn up.

The owner may give written instructions to the agent in addition to the power of attorney. These instructions can be done at a notary public or in the form of a separate written protocol. This makes it clearer under what conditions the agent can act.

Dismissal of the Representative

If the owner has lost confidence in the agent, they can dismiss them. Since the agency relationship is based on trust, the principal has the right to remove the agent from their duties. However, when carrying out the dismissal process, the agent's previous transactions, notifications to third parties, and records with the land registry, notary, contractor, and administration should be carefully reviewed.

The dismissal of an agent does not automatically prevent them from actually using the power of attorney they hold. Therefore, notification of the dismissal must be given to the agent, and the relevant land registry office, notary public, contractor, apartment management, and, if necessary, the relevant authorities must be notified. Otherwise, the agent may attempt to conduct transactions with third parties who are unaware of their dismissal.

In urban transformation projects, especially if trust in the representative has been lost before the transfer of land shares or the signing of a contractor contract, swift action is necessary. A letter of dismissal should be prepared, necessary applications should be made to the land registry office to prevent the transaction, and the contractor should be informed that the representative is no longer authorized.

Essential Authorities Required in an Urban Transformation Power of Attorney

Each case has different requirements; however, a secure urban transformation power of attorney can generally be structured by classifying the following powers:

Administrative follow-up authorities: Obtaining documents, making applications, and submitting petitions to municipalities, directorates, land registry offices, notaries, building inspection offices, and related institutions.

Risky building procedures: Risk assessment, appeals, receiving notifications, demolition process, rental assistance application.

Meeting and decision-making powers: Attending owner meetings, signing minutes, and voting.

Contractual responsibilities: Negotiating with the contractor, preparing a draft contract, and signing the contract in accordance with the owner's instructions.

Title deed authorizations: Transactions related to easement of floors, condominium ownership, abandonment, creation, consolidation, subdivision, partition, transfer of land shares, sale, or registration; however, these authorizations must be clearly and restrictively stated.

Legal action and enforcement powers: To file lawsuits, initiate enforcement proceedings, send warning letters, and file administrative applications.

Financial authorizations: To collect rent assistance, payments, security deposits, or compensation; if this authorization is granted, account information and usage limits must be specified.

The Most Common Mistakes Made When Granting Power of Attorney in Urban Transformation Projects

The most common mistake is granting an overly broad and unrestricted power of attorney. While the owner may only intend to grant the authority to attend meetings, they may unknowingly also grant the authority to sell and transfer real estate.

The second mistake is not including information about the property in the power of attorney. This makes the scope of authority unclear.

The third mistake is granting the authority to sign a contractor's contract unconditionally. The agent can sign a contract against the property owner's interests.

The fourth mistake is that the authority to transfer land shares is not linked to a phased and secured system.

The fifth mistake is failing to specify to whom, to which account, and under what conditions the rental assistance and fund collection authorization is granted.

The sixth mistake is that the power of attorney issued abroad is incomplete in terms of apostille, translation, or special authorization.

The seventh error is when only one of the heirs acts on behalf of the others without authorization.

The eighth mistake is that despite the dismissal of the representative, this fact was not reported to the land registry office, notary, contractor, and administrations.

Conclusion

In urban transformation projects, conducting transactions through power of attorney is a significant advantage in terms of speeding up and streamlining the process. However, if used without control, this convenience can lead to serious property loss for the owner, including risks related to title transfer, contractual liability, rental assistance disputes, share sales, and lengthy litigation processes.

The fundamental principle when preparing a power of attorney is this: the authority should be neither insufficient nor excessively broad. The transactions the agent will perform on behalf of the owner must be clearly stated; information about the property must be specified; and specific authorization must be included for complex transactions such as title transfer, land share transfer, sale, mortgage, settlement, waiver, and release. The Turkish Code of Obligations system obligates the agent to act in accordance with instructions, to show loyalty and diligence, to be accountable, and to deliver the received assets to the principal.

In urban transformation projects, power of attorney is of great importance, especially during the contractor contract and title transfer stages. Instead of granting the agent unlimited authority to transfer land shares, the owner should tie the transfer to specific stages such as obtaining permits, foundations, construction work, occupancy permits, and handover. The authority to sign contractor contracts should also be limited by protective clauses such as security deposits, rental assistance, delay penalties, technical specifications, and occupancy permit obligations.

In conclusion, a power of attorney for urban transformation is not a simple document to be filled with ready-made templates. This document allows the owner to exercise their most fundamental rights over the property through an agent. A correctly prepared power of attorney facilitates the process; an incorrectly, broadly, or vaguely prepared one can jeopardize the owner's property rights. Therefore, before granting a power of attorney in urban transformation, the property's title status, ownership structure, contractor model, title transfer plan, collateral system, and litigation risks should all be evaluated together.