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Friday, 02 January 2009 00:00

Important points when buying a property

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Overdue Real Estate Tax Debts

It is very important to check whether the current owner of the property owes any overdue Real Estate Tax debt to the tax authorities.

According to the current regulations, new owner is also responsible for overdue real estate tax debts. Thus, you are advised to put a special clause in the Sale Contract so as not to be in an unwanted situation in the future. Furthermore, you are recommended to ask the seller to provide you with the copies of the tax receipts given by the tax collection units.

Overdue debts for utility services

In order to get rid of any unwanted situation regarding the overdue debts for utility services, you are recommended to put special clauses in the sale agreement by stating that the seller will be responsible for all overdue debts incurred by the date of sale.

Current Tenants

If there is a tenant staying in the property you like to buy, you are advised to check the tenancy contract. In some cases, you’d better see the tenant. Furthermore, please check whether the tenant has given the seller an evacuation notice or not. If he has given a notice, then you ought to check whether the dates stated in the Sale Contract and the Evacuation Notice fit properly.

Double Checking the Registry Records

When you are offered a property, please compare the information relating to the property which sellers declared to you to the local title deeds registry office records. In other words, please double check the title-deeds belonging to the seller to see

• Whether the actual address of the property and the address shown on the Title-Deeds are the same,
• Whether there is more than one owner (if so, make sure that all shareholders comply with the sale),
• Whether there are special clauses on the title-deeds which prevent the transfer of ownership owing to a long-term debt owed to a bank.

Appropriateness of the building

According to current legislation, all buildings have to be in line with the construction and earthquake-proof regulations and official plans. In this regard, you should double check whether the building has been built in line with those arrangements. In other words, you should ask the seller to provide you with the "Use of Building Permit" or "Habitation Certificate" (“Yapi Kullanma Izni” or "Oturma Izni/Ruhsati" in Turkish.) issued by the local authorities.

Buildings under construction

If you are to buy a building under construction, make sure that the contractor is financially viable and legally authorised. Furthermore, you are recommended to put some special clauses in the contract with the contractor such as a date of completion, list of materials to be used, indemnities etc.

Construction of a building on a plot of land

All issues relating to construction of buildings/building rights are arranged by Construction Law No. 3194.

According to the law, you can have a building constructed on your own land provided that

• It is in line with the official Construction Plansand current regulations.
• You obtain a “construction authorisation” certificate (planning permission) from the local governments.

With regards to the authorisation for building rights, if your land is within municipal borders, the relevant municipality authorises the construction. If your land is outside the municipal borders, then the relevant provincial governor’s office (“Valilik” in Turkish) authorises you.

Please bear in mind that you cannot construct any building on lands which are allocated as common places such as roads, green fields, and parks in the official Construction Plans.

If you plan to buy a land and to build a property on it, you are advised to search for the relevant official Construction Plans approved by the local governments and regulations, and to contact the relevant local governments.

Hiring a good solicitor would be beneficial at his step.

Residency Permits for Newly Constructed Buildings

A residency (habitation) permit (“Yapi Kullanma Izni" or “Oturma Izni” in Turkish) is a document that shows the construction of the building has been completed in line with the authorisation (planning permission) given by the local council (Belediye). This document also includes the information regarding construction authorisation, completion date of the construction works, the land registry office records on the property, address & size of the property, specifications of the independent parts in the property, and the owners. Residency permit is provided by the Construction Licenses Directorate (Yapi Izinleri Müdürlügü) and Construction Supervision License Directorate (Yapi Denetim Izni Birimi) within a local council.

Without this document you can neither live in the property in question nor subscribe to the utility companies.

Required Documents

• Petition
• Copy of the title deeds
• A document to be gathered from local tax offices to evidence that the owner does not owe anything to the tax office.
• External Sewage Document (Water Utility Directorate of the Municipality provides with it)
• Turk Telekom’s suitability approval for future telecom connections
• Scientific Responsibility Report ("Fenni Mesul Raporu" in Turkish)
• Frontal photographs of size 13x18 cm
• If there is an elevator/lift in the property, guarantee & technical standards documents, engineers’ documents, supervision report, supervision receipts, application projects approved by the relevant chamber are also needed.
• Air-raid shelter report for the building where a shelter is designated
• Fire brigade reports for the buildings where fire exits are compulsory

Who can apply for it?

You or your agent (Power of Attorney holder) can apply to the aforementioned department in the municipality. As well as the documents listed above, please make sure the visas regarding the application, the base (zemin), the parts above the base ("su basman" in Turkish), heat insulation and general construction (kaba insaat).

What is the cost of a building residency permit?

An examination fee and the corresponding levy, which are very low compared to the European examples, are charged on the basis of the area (number of meter squares) of the property. The unit prices for these fees are updated periodically. Please contact the municipality in question for the updated figures.

Housing Co-operatives

Housing Cooperatives are legal entities established in line with Law No. 1163 and aim at providing their partners (or participants) with residential flats or houses.

These entities are one of the most favorable methods of acquiring a property among Turkish citizens, who are generally at the middle income levels.

Tax advantages and relatively cheaper loans provided by State organizations, great potential for economies of scale, and convenient financing requirements evenly distributed to a time scale extending to a couple of years are some of the appealing features of these entities.

However, right management of a cooperative is of high importance. The Board should assure a sound financial status and employing the right contracting company which will construct the complex is very crucial. Unless a good Board which is composed of trustworthy and talented people is in office, the designated targets may not be attained.

In this regard, if you are planning to purchase a flat, house or villa on a complex, as a part of a cooperative, you are strictly advised to search for all important and relevant aspects. You can hire a professional to do this on behalf of you. In case you need professional help, please be sure that you assign the professional in question through a sound Power of Attorney.

The following information briefly explains how cooperative mechanism works.

A cooperative has to have at least 7 partners (or participants or members). The Articles of Association (AA) has to be stamped by a notary public and to be registered to the Trade Registry. The followings are to be clearly stated in an AA:

• The name and address of the cooperative,
• Purpose and activities of the cooperative,
• The conditions which cause participants to lose their partnership,
• Shares of participants,
• The degree of the rights and liabilities of participants,
• How the cooperative can be represented,
• Methods for how revenues and expenditures accrue,
• Names and addresses of the founders,
• How contributions will be made by the participants,
• Other issues, where applicable.

Cooperatives have to arrange ‘partnership notes’ in the name of each partners and these documents have to be signed by participants and the representatives of the cooperatives. These notes are delivered to the partners and indicate that the note holder has a legal partnership in the cooperative.

Main decisions regarding a cooperative’s activities are made by the General Assembly, composed of partners. Usual General Assembly meeting has to be held within a period up to 3 years following the previous meeting. Participants are officially invited to General Assembly meetings by the people authorised to represent the cooperative. These representatives are selected by the General Assembly.

Bringing the partnership to an end is allowed by the Law. In some cases, there might be some special time restriction clauses in the AA. AA may envisage that partnership cannot be brought to an end within a period up to 5 years following the date of partnership. If any force majeure conditions are specified in the AA and a participant falls in a force majeure, then he is exempt from such time restriction.

Partnership rights can be transferred to others or sold out.

According to the regulations, any partner is allowed to ask the Board of a Cooperative to provide him/her with the information about the financial status of the cooperative.

A cooperative dissolves if

• All works envisaged by the AA have been materialized and the properties have been registered in the names of the participants.
• The General Assembly decides upon that the cooperative will no longer continue.
• Bankruptcy is declared.
• Relevant Courts have made a decision to dissolve the cooperative.
• Another cooperative takes over or purchases it.
• Usual General Assembly meeting has not been held for at least 3 years.
• The relevant ministry finds out that the cooperative can no longer attain the designated targets.

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