The sale and purchase of flats in a building that is still under construction is governed in Turkish law by a distinct institution. A construction servitude is a right in rem of a special character, established in connection with the land share, for the purpose of enabling condominium ownership to be created in the future over the independent sections of an unfinished building. The right comes into existence upon registration in the land registry under the Condominium Ownership Act No. 634, and it lays the legal groundwork for the transition to condominium ownership once the building has been completed.
The conditions under which this institution may be established, the obligations borne by the holders of the right, and the manner in which the transition to condominium ownership operates generate considerable debate in practice; in buildings for which no occupancy permit can be obtained, the process may remain suspended for years.
Below we address in outline the legal character of the construction servitude, the conditions for its establishment and its operation in the land registry, the powers conferred on and the obligations imposed upon the holders of the right, the process of conversion into condominium ownership, and the differences between the two regimes.
Definition and Legal Character of the Construction Servitude
The right in question arises in connection with the land share and subsists until condominium ownership is created; by its nature it is a right in rem. It does not confer full ownership over the independent section; it merely constitutes the legal infrastructure of the path leading to the condominium ownership to be created in the future.
Article 14 of the Condominium Ownership Act (Act No. 634) regulates this institution as a right established over the independent sections of a building under construction, or to be constructed later, on a plot of land, so as to form the basis for condominium ownership. The construction servitude is therefore regarded as a right in rem that constitutes the stage preceding condominium ownership and that is tightly bound to the land share.
Within this definition, the distinguishing features of the institution may be listed as follows: the right arises upon registration in the land registry; it is available only in respect of buildings that have not yet been completed; it is established by attachment to the land share; it determines who holds the right over each independent section; and it remains in force until condominium ownership is created.
By virtue of these features, the construction servitude is regarded as a temporary rather than a permanent regime of rights in rem, one that prepares the transition to condominium ownership.
How Is a Construction Servitude Established?
This right is established by attachment to the land share in respect of the independent sections of a building that is under construction on, or planned for, a plot of land. Under the provisions of Act No. 634, the creation of the right depends upon registration in the land registry. It is therefore mandatory that the conditions required by the Act be satisfied and that the necessary documents be submitted to the land registry directorate.
The practical function of the institution is that it permits independent sections in immovables under construction to be sold and transferred; once the building has been completed, that registration becomes the basis for the transition to condominium ownership.
Conditions for Establishing a Construction Servitude
Before anything else, the establishment of the right requires that the immovable be recorded in the land registry as a plot of land and that the independent sections of the building to be erected upon it have been determined. In addition, the owners must have made a request to that effect and the independent sections must have been identified in conformity with the project.
The principal conditions required are as follows:
- A request by the owner or owners for the establishment of a construction servitude
- Registration of the immovable in the land registry with the character of a plot of land
- Preparation of the architectural project for the building
- Determination of the independent sections on the project
- Separate indication of the land share falling to each independent section
Establishment of the Servitude in the Land Registry
The transaction is carried out at the land registry directorate for the place where the immovable is located. If the documents have been submitted in full and the statutory conditions are satisfied, the directorate establishes the construction servitude in respect of each of the independent sections in connection with the land share.
Following the transaction, the independent sections become visible in the register separately from one another, and the persons concerned acquire the construction servitude attached to their shares.
Documents Required for a Construction Servitude
The establishment procedure requires that certain documents be submitted to the land registry directorate. These documents are official records demonstrating that the building to be erected has been lawfully planned and that the independent sections have been determined.
The documents generally required at the establishment stage are as follows:
- The management plan
- The approved architectural project
- The title deed
- The list of independent sections
- Identity documents of the owner or owners
- A document showing the distribution of the land shares
Legal Effect of Registration
The right is deemed to have arisen in law at the moment it is entered in the land registry. No construction servitude can be said to exist before registration has taken place; in short, this is a right in rem acquired through registration.
Registration has three fundamental effects: a right attached to the land share arises in respect of the independent sections, that right is recorded in the register, and the holders of the right acquire the power of disposition over their independent sections.
Rights of Construction Servitude Holders
The persons concerned may exercise certain powers over the independent sections, attached to their shares. These powers are regulated in Act No. 634 and are intended to ensure that the transition to condominium ownership proceeds soundly and that the persons concerned are able to benefit from the immovable.
The powers in question do not reach the level of a full right of ownership; they consist of rights in rem that make it possible to dispose of the independent section and to take part in the conversion process.
Holding a Right over an Independent Section
The person concerned becomes the holder of a right over the independent section, attached to his or her share; the transaction that confers this position is registration in the land registry. The right in question constitutes the legal basis of the ownership to be created over the independent section in the future.
The powers available to the holder of the right include disposing of the independent section, transferring that section to third parties, making it the subject of a lease agreement, and passing the right on to his or her heirs.
None of this, however, acquires the character of a full right of ownership until condominium ownership has been created.
Right to Benefit from Common Areas
Holders of the right have a power over the common areas in connection with the land share; the extent to which those areas may in fact be used is, however, determined not by the land share but by the nature of the common area concerned.
Before the building is completed, the use of the common areas may remain limited. Even so, the holders of the right may benefit from those areas in a manner compatible with the purpose of the immovable. Such use may not be exercised in a way that obstructs the use of other holders of the right.
Right to Request Transition to Condominium Ownership
Once the building has been completed and the necessary conditions have arisen, the holders of the right may request that condominium ownership be created. Securing that transition is, after all, the very reason for which the institution exists.
If the building has been completed but the conversion formalities are not being carried out, the holders of the construction servitude may request that the necessary transactions be effected; if no result is obtained, they may have recourse to the courts.
Right to Transact in the Land Registry
The holder of the right may dispose of the right attached to his or her share in the land registry. Within this framework, the right may be transferred, sold, donated and made the subject of a pledge.
The validity of such dispositions depends on the official transactions to be carried out in the land registry.
Obligations of Construction Servitude Holders
Holding the right gives rise not only to powers but also to responsibilities. In order that the principal immovable may be completed and an orderly communal life secured, Act No. 634 imposes certain obligations on holders of a construction servitude. The purpose of these provisions is to protect both the rights over the plot of land and the regime of condominium ownership to be created in the future.
These obligations stand out in particular on three points: respect for the position of the other holders of the right, the assumption of common expenditure, and the completion of the construction.
Bearing Obligations Attached to the Land Share
The persons concerned must bear the responsibilities arising over the principal immovable in connection with their shares. These cover responsibilities relating to the preservation and maintenance of the immovable and to the use of the common areas.
Liability arises in proportion to the land shares, and the holders of the right cannot escape these obligations by a unilateral declaration.
Obligation to Contribute to Common Expenses
Contributing to the expenditure incurred for the preservation of the principal immovable, the completion of the construction and the management of the common areas is an obligation founded on Act No. 634.
Contribution is not determined by a single criterion; different principles apply according to the nature of the expense. Some expenditure is contributed to in proportion to the land share, some in equal parts, and some according to the ratio of benefit (use).
By way of example, expenditure directed at the completion of the construction and general expenses relating to the principal immovable are for the most part apportioned on the basis of the land share, whereas management and operating expenses may be distributed in equal parts or by reference to the extent of use.
The fact that the independent section has not yet been taken over, or is not actually being used, does not extinguish this obligation. Holders of the right cannot avoid contributing to the common expenses on such grounds.
Obligation to Contribute to Completion of the Building
The persons concerned must refrain from obstructing the transactions directed at the completion of the building and must discharge the obligations falling to them. Since the aim of the system is that the building be completed and condominium ownership created, the holders of the right are expected to abstain from conduct that would disrupt this process.
In this context, holders of the right may not engage in conduct that would render the completion of the building more difficult; they must submit to the implementation of the common decisions taken; and they are obliged to permit the necessary technical and administrative transactions to be carried out.
Obligation to Comply with the Management Plan and the Project
Holders of the right are obliged to act in conformity with the management plan, where one exists, and with the architectural project of the principal immovable. Making an alteration contrary to the project, or using the independent section otherwise than for its allocated purpose, is regarded as unlawful.
Holders of a construction servitude must therefore adhere to the project and to the relevant legal provisions, both when using their independent sections and in transactions relating to the construction process.
Transition from Construction Servitude to Condominium Ownership
This institution is a right in rem of a temporary character, established with a view to conversion into condominium ownership once the building has been completed. When the building is finished and the legal conditions required are satisfied, the right is extinguished and gives way to condominium ownership over the independent sections. The process is completed by registration in the land registry under Act No. 634.
This conversion is a critical threshold in newly built residential and commercial projects, since full ownership over the independent sections can be acquired only at this stage.
Obligation to Move to Condominium Ownership
Where a construction servitude has been created over an immovable, the rule is that condominium ownership be created once the building has been completed. Article 14 of Act No. 634 already defines the construction servitude as a right in rem established so as to form the basis for condominium ownership, and it identifies the purpose of the right as the creation of condominium ownership upon completion of the building.
In practice, the reason that most often delays this stage is the inability to obtain the occupancy permit (building use permit). Where such a blockage arises, holders of the construction servitude may request that the transition formalities be carried out and, if necessary, may have recourse to legal remedies.
Conditions for Transition to Condominium Ownership
For the conversion to take place, the building must first have been completed and the independent sections must have become separately usable. In addition, the occupancy permit must have been obtained and the necessary documents submitted to the land registry directorate.
The principal conditions required for the transition are as follows:
- A request for the creation of condominium ownership
- Actual completion of the building
- Completion of the architectural project
- The independent sections having become usable independently of one another
- The occupancy permit (building use permit) having been obtained
Requirement of an Occupancy Permit (Building Use Permit)
One of the most decisive conditions of the conversion is that the occupancy permit has been obtained. This document is an official record establishing that the building has been completed in conformity with its construction permit and its project and that it is fit for use.
In principle, it is not possible to move to the condominium ownership regime without obtaining this document. Accordingly, even where the building on an immovable subject to a construction servitude has in fact been completed, condominium ownership cannot be created unless the occupancy permit has been obtained.
It is a picture frequently encountered in practice that an immovable remains for many years in the status of a construction servitude because, although the building has been completed, the occupancy permit cannot be obtained.
Formalities for Transition to Condominium Ownership
The conversion is effected by a transaction carried out at the land registry directorate. At this stage the documents proving that the building has been completed are submitted to the directorate; the independent sections are then registered in accordance with the condominium ownership regime.
The documents generally required during the transaction are as follows:
- The occupancy permit (building use permit)
- The title deed
- The list of independent sections
- The approved architectural project
- The management plan
- Identity documents of the owners
Upon registration in the land registry, the construction servitude comes to an end and gives way to condominium ownership.
Effects of the Transition to Condominium Ownership
With the completion of the conversion, a full right of ownership arises over the independent sections. From that moment, the rights and obligations of the owners are determined within the framework of the provisions on condominium ownership.
The principal effects of the transition may be summarised as follows:
- The construction servitude is extinguished
- The immovable becomes subject in its entirety to the condominium ownership regime
- A full right of ownership arises over the independent sections
- Each independent section acquires the character of a separate immovable
- The assembly of condominium owners and the management structure begin to function in practice
Difference Between Construction Servitude and Condominium Ownership
These two institutions are two distinct types of right in rem created in relation to the independent sections of the same immovable. Both are regulated under the Condominium Ownership Act No. 634; there are, however, appreciable differences between them as regards the legal effects they produce, the scope of the right of ownership and the stage the building has reached. A correct grasp of this distinction is decisive when purchasing an immovable, taking out a loan and assessing legal risks.
Our study entitled What Is Condominium Ownership? may also be consulted in this connection.
Difference in Terms of Legal Status
A construction servitude is a right in rem established by attachment to the land share over an unfinished building so that condominium ownership may be created in the future. It is temporary in character, and it is envisaged that it will be converted into condominium ownership once the building has been completed.
Condominium ownership, by contrast, denotes the full right of ownership arising in respect of the independent sections of a completed building. Under that regime the independent section is regarded as an immovable in its own right and its owner enjoys complete power of disposition over it.
Difference in Terms of Use and Right of Ownership
At the servitude stage there is no full ownership over the independent section; there is only a right attached to a share that forms the basis for the condominium ownership to be created in the future. Since the building has not yet been completed, actual use of the independent section is in most cases not possible.
Under condominium ownership, by contrast, the independent section is situated within a completed building; its owner may use it as he or she wishes, let it or transfer it to third parties. In this respect condominium ownership corresponds to the stage at which full ownership arises in law and the immovable can in fact be used.
Difference in Terms of Sale and Loan Transactions
There is no legal obstacle to the sale of an immovable over which a servitude has been created. Banks, however, take account of the legal position of the immovable when deciding on a loan and for the most part prefer immovables over which condominium ownership has been created. The reason for this is that, under condominium ownership, the building has been completed and the legal position has been clarified.
This preference produces three consequences in practice: loans are more readily obtained in respect of immovables under condominium ownership; loan conditions may be narrowed in respect of those under a construction servitude; and condominium ownership is regarded as a factor that increases legal security for the purchaser.
Points Most Often Confused in Practice
The two concepts are frequently used interchangeably in everyday language. In particular, a failure to examine the land registry record sufficiently during the purchase of an immovable may give rise to legal risks at a later stage.
The misconceptions most often encountered in the field are as follows:
- The mistaken assessment that an immovable over which a construction servitude has been created carries no legal risk whatsoever
- The belief that condominium ownership can be created even without an occupancy permit
- The assumption that a construction servitude and condominium ownership denote the same legal status
- The idea that a building shown in the land registry as subject to a construction servitude must necessarily have been completed
Before a purchase decision is taken, it must therefore be verified which regime has been created in the land registry record — that is, whether one is dealing with a servitude or with ownership.
The Practical Value of the Differences Between the Two Regimes
The matters we have addressed separately above show that these two types of right in rem, both of which may be created over the same immovable, differ from one another as regards loan transactions, the possibility of use and legal status. A correct understanding of the difference is decisive both for a sound decision on the purchase of an immovable and for the advance assessment of legal risks.
Independent Legal Assessment
The construction servitude is a functional instrument developed in order to finance the construction process; the legal position it affords, however, often does not match the security that purchasers expect. Purchasing an independent section shown in the land registry as subject to a construction servitude does not mean that the flat in question actually exists; the subject matter of the right is an independent section determined according to the project, together with the land share allocated to it. Purchases made without a grasp of this distinction may turn into serious losses where the building is left unfinished or is constructed contrary to the project.
Secondly, a failure to determine the land shares at the establishment stage in a manner consistent with the value of the independent sections generates disputes under many headings once condominium ownership has been created, from the apportionment of common expenses to the majorities required for decisions. Calculating the shares correctly from the outset is a far more economical solution than actions for rectification brought later.
The headings that should be brought to the fore in a concrete matter are as follows:
- Verifying before purchase whether a construction servitude or condominium ownership has been created in the land registry record
- Comparing the approved architectural project with the independent section that is the subject of the sale in order to establish whether they correspond
- Examining whether the land share allocated to the independent section has been determined in proportion to value
- Assessing in advance the records in the management plan concerning use and the apportionment of expenses
- Investigating whether the occupancy permit has been obtained and whether there is any breach of the construction permit that would prevent it from being obtained
- Where the building has been completed but no transition has taken place, asserting the request for transition to condominium ownership in due form
Independent Legal provides advisory services across the whole field of condominium ownership law, from the establishment of a construction servitude to the formalities for the transition to condominium ownership and the resolution of disputes arising from that process.