Property Rights in Urban Transformation

 This comprehensive legal guide covers property rights in urban transformation projects, including risk assessment, objections, lawsuits, evictions, demolition, rental assistance, interest subsidies, contractor contracts, simple majority decisions, and land share sales.

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Why are property rights important in urban transformation?

Urban transformation is not simply the process of demolishing an old or risky building and constructing a new one in its place. It is also a comprehensive legal area directly concerning property rights, the right to housing, economic value, land registry records, land shares, the decision-making will of the owners, and administrative oversight. Especially in procedures carried out under Law No. 6306 on the Transformation of Areas Under Disaster Risk, it is crucial for owners to be aware of their rights, manage the process correctly, and adhere to deadlines.

During the urban transformation process, property owners have many rights, including having a risky building assessment carried out, objecting to the risky building report, filing administrative lawsuits, requesting a stay of execution, demanding that legally compliant procedures be followed during the eviction and demolition process, applying for financial support such as rent assistance or interest subsidies, participating in decisions regarding the new building to be constructed, reviewing the contractor's contract, filing lawsuits against unfair land share sales, and objecting to valuation reports.

Failure to be aware of these rights can have serious consequences for the property owner. Failure to appeal the risky building report within the stipulated time, failure to utilize effective legal remedies against the demolition decision, inadequate preparation of the contractor contract, undervaluation of the land share, or irregularities in the majority decision can all result in significant losses for the property owner in terms of their property rights.

Property Owners' Right to Have a Building Assessed for Risks

The most common starting point in the urban transformation process is the identification of risky buildings. Risky building identification involves determining, based on technical principles, whether a building has reached the end of its economic lifespan or whether it poses a risk of collapse or severe damage. In urban transformation, the process for risky buildings is described as follows: building owners apply to licensed institutions and organizations, risk assessment is carried out, the risky building is demolished, and post-demolition procedures are implemented.

One of the most fundamental rights of property owners is the right to have their building assessed for structural integrity. It is not necessary for all owners to act together for this application. In practice, one of the owners or their legal representative can initiate the risk assessment process by applying to an institution or organization licensed by the Ministry. This means that the transformation process can be initiated by a single owner; however, the rights of other owners to object and file lawsuits are reserved after the report is prepared.

The right to have a risk assessment carried out on a building not only provides the owner with the opportunity to learn about the building's safety, but is also important in terms of benefiting from rental assistance, interest subsidies, fee exemptions, and conversion facilities under Law No. 6306. According to ministry statements, citizens whose risky buildings are demolished are granted facilities such as interest subsidies, rental assistance, and fee exemptions for the new housing to be built.

Property Owners' Right to Information and Notification

In urban transformation projects, one of the most important rights of property owners is the right to be properly informed of the process. After a risky building is identified, the report is reviewed by the relevant authority, the necessary annotations are made in the land registry, and the notification process to the owners is initiated. This notification is not limited to traditional postal service. In practice, posting a report on the building, e-Government notification, neighborhood announcement, and relevant administrative notices are important.

The notification and publication process is crucial for property owners to exercise their rights to object and file lawsuits. The Ministry of Environment, Urbanization and Climate Change states that in risky building processes, the date of receipt of the notification, not the date of posting, will be considered under the Notification Law; and that objection petitions submitted by the property owner or their legal representative and received by the relevant directorate within 15 days of the completion of all notifications will be taken into account.

Therefore, the owner should not make the mistake of neglecting the process on the grounds that "I did not receive the notification in person." The land registry records, e-Government notifications, local administrative notices, posted notices in the building, and administrative letters should be checked regularly. Missing deadlines for objections and lawsuits can lead to the finalization of the risky building assessment and the initiation of the eviction and demolition process.

Right to Appeal Against a Risky Building Report

In urban transformation projects, one of the most important defense rights of property owners is the right to appeal against a risky building report. The issuance of a risky building report does not necessarily mean that the building is undeniably at risk. The report may be based on faulty technical inspections, insufficient sample collection, incorrect building codes, incorrect parcel information, erroneous concrete strength calculations, or incomplete structural system analysis.

The right to appeal against the determination of a building as risky is primarily granted to the building owners and their legal representatives. Ministry statements indicate that if an appeal petition is submitted to the relevant provincial directorate along with documents proving ownership of the building, the appeal can be examined by a technical committee under Law No. 6306.

Because the objection period is short, property owners need to act quickly. The objection letter should not consist only of general statements such as "our building is sound." An effective objection should concretely demonstrate technical deficiencies in the report, errors in sample collection, inadequacies in the assessment of the load-bearing system, deficiencies in soil investigation, errors in address and building code, jurisdictional issues, and irregularities in notification procedures.

If the owner has passed away, the heirs must also be considered in the process. Ministry statements indicate that, for owners whose title deeds have not been transferred and who appear as deceased in the MERNIS system, if the heirs are known, notification should be sent to the heirs, and they should be granted the right to object to the risky building assessment process.

Right to File a Lawsuit Against the Determination of a Building as Risky

Property owners have the right to file a lawsuit in administrative courts against the determination of a building as risky. The determination of a building as risky is, by its nature, an administrative act. Therefore, if the property owner believes that the report and the actions based on it are unlawful, they can file a lawsuit for its annulment in the administrative court.

The most important point here is that filing a lawsuit does not automatically stop the eviction and demolition process. According to the Ministry's statement, the fact that a lawsuit has been filed against the risk assessment of a building or the demolition decision does not prevent the administration from carrying out its actions unless a stay of execution or annulment decision is given in these lawsuits.

Therefore, when filing a lawsuit, the property owner should not only request annulment but also, if the circumstances of the case are appropriate, request a stay of execution. The request for a stay of execution should clearly state that the action is unlawful and that its implementation would cause irreparable harm. It should be emphasized that if the risky structure is demolished, a subsequent annulment decision may be effectively ineffective, the property right will be irreversibly affected, and demolition without addressing the technical deficiencies in the report is disproportionate.

Property Rights During Eviction and Demolition

If a building is definitively identified as risky, the evacuation and demolition process begins. At this stage, the owners' right to continue using the building is restricted because the structure is now considered risky by the authorities. However, this does not mean that the authorities can act arbitrarily. Evacuation and demolition procedures must be carried out in accordance with the law, regulations, and procedures.

The Ministry's statements regarding the risky building process indicate that owners of properties registered in the land registry as risky buildings will be given a certain period of time to demolish the buildings; if demolition is not carried out, the administration will conduct inspections and take additional actions. Furthermore, it is stated that owners of buildings evacuated through agreements within the application area may receive monthly rental assistance, as determined by the Ministry, starting from the date of evacuation or demolition.

Property owners have the following rights at this stage: to request proper eviction and demolition notice, to learn the demolition period, to follow the demolition permit process, to demand that the building be demolished safely, to demand accurate calculation of the costs incurred by the administration, to apply for rental assistance or interest subsidies, and to file a lawsuit against unlawful demolition procedures.

Right to Rent Assistance and Interest Subsidy

In urban transformation projects, one of the most important financial rights of property owners is rental assistance. Rental assistance aims to alleviate the temporary housing burden of property owners whose buildings are evacuated or undergoing demolition due to risky structures. According to the Istanbul Infrastructure and Urban Transformation Directorate, property owners in the project area whose buildings are evacuated by agreement may receive monthly rental assistance, as determined by the Ministry, starting from the date of evacuation or demolition. For risky structures outside of risky areas, the assistance period is 18 months.

According to the 2024 Rent Assistance Guide, owners of buildings covered under Law No. 6306, tenants residing in the building, and holders of limited real rights are considered eligible. The guide states that applications must be submitted to the relevant directorate in the province where the risky building is located, or to the relevant district municipality in Istanbul, within one year of the date the risky building is evacuated or demolished.

The most important point for property owners to pay attention to regarding rental assistance is the application deadline. If the one-year period following the eviction or demolition date is missed, the right to rental assistance may be lost. Furthermore, it should be noted that the rule stating that both rental assistance and interest subsidies cannot be provided to the same person is incorrect; Ministry statements indicate that those receiving rental assistance cannot receive interest subsidies, and vice versa.

The guidelines stipulate that rental assistance will be provided to property owners for a maximum of one independent unit of the same type, without requiring residency; applications for a different type of residence and a different type of business premises may be evaluated separately.

Property Owners' Right to Participate in Decisions Regarding the New Building

After a risky building is demolished, the property becomes a vacant plot of land. At this stage, the most important right of the owners is the right to participate in decisions regarding how the land will be developed. Questions such as whether a new building will be constructed, whether a construction contract will be signed with a contractor in exchange for a share of the completed building, whether a revenue-sharing agreement will be made, whether the construction will be financed by the owners themselves, and how the independent units will be distributed directly determine the economic future of the owners.

In urban transformation projects, property owners' decision-making rights are closely linked to their land share ratios. In most cases, the quorum for decision-making is determined not by the number of property owners, but by their land share ratio. Therefore, a large number of property owners with small shares may not be able to form a majority on their own; conversely, the will of property owners with larger shares can be decisive in the decision-making process.

However, a majority decision does not mean that the rights of the minority owners are completely eliminated. The majority decision must comply with the principles of good faith, equity, equal treatment, and the essence of property rights. Owners have the right to examine the minutes of the meeting, oversee the procedure for calling the meeting, review the content of the proposal, evaluate the contractor's contract, and object to unfair terms.

Landowners' Rights Against the Sale of Land Shares

One of the most sensitive issues in urban transformation is the sale of land shares belonging to owners who do not agree with the majority decision. According to the Ministry's statement, the land shares of owners who do not agree are sold to the other shareholders who have reached an agreement through an auction at the value of the land share; once the sales transactions are completed, the implementation phase for the new building begins.

This sales mechanism aims to prevent the transformation process from completely halting due to obstruction by minority landowners. However, this does not mean that the sale of land shares can be carried out arbitrarily. Landowners have significant rights in this process. First, the majority decision must be made in accordance with the procedure. The decision and offer must be properly communicated to the landowner who does not agree with the decision. The value of the land share subject to sale must be determined based on its true market value. The auction procedure must be conducted in accordance with the legislation.

If a dissenting property owner believes that the valuation was too low, the decision was made improperly, they were not invited to the meeting, they were not properly informed of the contract or offer, the contractor's contract is unfair, or the sale of the land share was conducted in bad faith, they may pursue legal action.

The Right of the Contractor to Review and Negotiate the Contract

One of the most critical rights of property owners in the urban transformation process is the right to examine and negotiate the content of the contract with the contractor or developer. In practice, many property owners sign the standard contract offered by the contractor without sufficient examination, and later suffer serious losses of rights.

Construction contracts based on land share or building in exchange for a share of the completed building must be prepared in detail regarding the sharing of independent units, net and gross square meters, delivery time, rental assistance, relocation costs, delay penalties, security deposits, technical specifications, licensing obligations, occupancy permits, defective workmanship, title transfer, and termination provisions.

Property owners need protection, particularly in the following areas: the contractor's financial adequacy, the provision of a bank guarantee or similar security, phased title transfer, ensuring that all shares are not transferred before the construction reaches a certain level, clearly stating the delivery date, including penalties for delays, preparing detailed technical specifications, and ensuring that delivery is not considered complete until an occupancy permit is obtained.

Title Deed, Land Share and Independent Unit Rights

In urban transformation projects, one of the most important factors affecting property rights is the land registry record. Land shares, independent unit numbers, floor easement or condominium ownership status, mortgages, liens, usufruct rights, inheritance issues, and power of attorney procedures directly affect the smooth progress of the process.

The owner should verify the accuracy of the land share recorded in the title deed. This is because in new buildings, the allocation of independent units is often based on land shares. Incorrect land shares, insufficient square footage, differences in premium value, or unfairness in the distribution of independent units may become grounds for litigation in the future.

Furthermore, in cases where inheritance transfers have not yet been completed for immovable properties, the heirs must be included in the process. The death of the person listed as the owner in the land registry does not mean that the process stops entirely; however, the heirs must be informed and enabled to exercise their rights.

Property Rights in Unlicensed or Non-Compliant Buildings

One of the frequently asked questions in urban transformation is whether buildings constructed without permits or in violation of project plans can benefit from the rights under Law No. 6306. The Ministry's statements indicate that it is not mandatory for a building to have a permit in order to undergo a risk assessment under Law No. 6306 and to benefit from the rights under the law.

This explanation is important from the property owner's perspective. The presence of an unlicensed structure, an addition violating zoning regulations, or the status of an old structure alone does not prevent a building from being classified as risky. However, the lack of a permit or deviations from the project plan must be further evaluated in terms of obtaining permits for the new structure, the distribution of independent units, development rights, and the contract model.

Property Owners' Right to File a Lawsuit Against Unlawful Actions

In urban transformation projects, property owners' right to sue is not limited solely to lawsuits challenging the determination of a risky building. Different types of lawsuits may arise at different stages of the process. Actions such as the determination of a risky building, demolition decisions, sale of land shares, expropriation, or administrative fines may be subject to litigation in administrative courts. Conversely, claims arising from contractor contracts regarding delay compensation, incomplete and defective workmanship, cancellation and registration of title deeds, termination of contracts, or penalty clauses may fall within the jurisdiction of the judicial courts.

The key issue property owners should pay attention to here is determining the correct legal avenue. Filing a lawsuit in the civil courts against an administrative action or taking a dispute arising from a private law contract to the administrative court can lead to a loss of time. Therefore, the source of the dispute must be correctly identified before filing a lawsuit.

Things Property Owners Should Pay Attention to During Urban Transformation

To prevent property owners from losing their rights during the urban transformation process, they must pay attention to certain key points. Firstly, they should follow up on risk assessment reports, official notifications, neighborhood announcements, land registry records, and e-Government notifications. Secondly, they should not miss deadlines for objections and lawsuits. Thirdly, property owner decisions regarding the new building must be in writing and in accordance with proper procedures. Fourthly, the contractor contract should not be signed without undergoing legal scrutiny. Fifthly, land share valuation reports should be examined, and swift action should be taken against the possibility of undervaluation or unfair sales.

Property owners should also not miss application deadlines for rental assistance, interest subsidies, title deed fees, and other exemptions. To benefit from support under the risky building process, it is important that the building has been identified as a risky structure under Law No. 6306. The Ministry states that in order to benefit from the rights under the law, the building must have been identified as a risky structure under Law No. 6306 before it was demolished.

Conclusion

In urban transformation projects, property owners' rights are not limited to acquiring an independent unit in the new building. Owners have the right to: have a risk assessment of the building carried out; object to the report; file a lawsuit; request a stay of execution; be informed of the notification and announcement process; demand that eviction and demolition be carried out in accordance with the law; apply for rental assistance or interest subsidies; participate in decisions regarding the new building; review the contractor's contract; object to the sale of land shares; and seek legal recourse against unfair actions.

To ensure these rights are exercised effectively, deadlines must be carefully monitored. Urban transformation processes are fast-paced, involve short timeframes, and directly affect property rights. In particular, deadlines for appealing risky building reports, administrative litigation periods, rental assistance application periods, notifications regarding land share sales, and delivery dates in contractor contracts are of great importance to property owners.

A properly managed urban transformation process can provide property owners with a safer, more valuable, and legally compliant property. Conversely, an ill-planned process can result in low-priced land share sales, incomplete contracts, unfinished construction, defective workmanship, loss of rights, and lengthy lawsuits. Therefore, property owners should consider the urban transformation process not only as a technical or economic process, but also as a strategic process with serious legal consequences.