In a country lying on an earthquake belt, the renewal without delay of districts carrying a danger of loss of life and property, whether by reason of the nature of the ground or of the existing building stock, has become unavoidable. Proceeding from the view that conducting transformation plot by plot in districts of this kind would prolong the process and magnify the danger, the legislature introduced the institution of the declaration of a risky area and gave effect to that arrangement by Act No. 6306 on the Transformation of Areas at Disaster Risk.
The concept of a risky area covers districts capable of giving rise to loss of life and property by reason of the characteristics of the ground or of the development upon it. A decision to that effect in respect of a district is not a purely technical administrative measure; it is a vital threshold as regards the safety of those living there.
Below we examine in detail how the legal position of owners takes shape following the declaration of a risky area and what rights they hold within the scope of transformation.
The Concept of a Risky Area and the Legal Framework
Risky areas are a category standing at the centre of transformation practice; their legal framework is determined by Act No. 6306, the “Act on the Transformation of Areas at Disaster Risk”.
What Does a Risky Area Mean?
A risky area denotes a district which carries a danger of giving rise to loss of life and property by reason of the structure of the ground or of the development rising upon it, and whose boundaries are drawn by a decision of the President.
Which Districts May Be Declared Risky Areas?
Under Art. 5(2) of the Implementing Regulation to Act No. 6306, the districts capable of forming the subject of a declaration of a risky area fall under two headings.
Districts in which public order or public safety has broken down. Where public order or public safety in a settlement has broken down to a degree that would halt or interrupt ordinary life, a decision declaring that area a risky area may be given. For that purpose, at least one of the following circumstances is required to be present:
- That damage has occurred to the infrastructure or the superstructure
- That the planning or the infrastructure services have proved inadequate
- The existence of development contrary to the zoning legislation
Where one or several of these circumstances are present together, a risky area file is created for the district concerned. The Presidency of Urban Transformation makes the determination on the basis of the file prepared and refers the matter to the Office of the President with a view to a decision being taken. The formal treatment of the district as a risky area takes place by a decision of the Office of the President.
Districts in which more than 65% of the building stock is contrary to the zoning legislation. Where at least 65% of the buildings in a district have been constructed contrary to the zoning legislation, or were built without a permit and subsequently regularised by a building and occupancy permit, a decision declaring that area a risky area may likewise be given. Determining that proportion is the task of the Presidency of Urban Transformation. The district whose boundaries are determined by the Presidency is submitted for the approval of the Office of the President and formally acquires the status of a risky area by a decision of the President.
The Planning of Transformation in Risky Areas
Once a district has been declared a risky area, transformation projects are devised having regard to the characteristics particular to that area. Plan proposals are prepared either by the Administration or by those concerned and are submitted to the Presidency. At the planning stage the plans in force, the documents setting out the current state of the district and the opinions obtained from the institutions and organisations concerned are assessed together.
Taking into account the character of the area of application, the scale of the plan and the analysis of needs, the Presidency identifies the elements that must appear in the plans to be submitted. The Presidency, which also determines which determinations, investigations and examinations are to be carried out, approves the proposals it finds suitable either as they stand or with such amendments as it considers necessary.
The Power of Disposal and the Position of Owners
In these districts the power of disposal may be exercised within the rules determined by the Presidency, by TOKİ or by the Administration. These bodies hold the power to suspend temporarily all transactions relating to zoning and development, both in risky areas and in reserve building areas.
The duration of a suspension decision may not exceed two years; where the need arises, it may be extended by a further year. During the period in which the suspension is in force, no new development or construction activity is permitted in the area concerned.
The Determination of the Value of the Property and of Entitlement
Following the decision declaring a risky area, the value of the properties in the district and the rights of the owners must be determined. Under Article 12 of the Regulation, the institution concerned itself prepares, or has prepared, the map or sketch setting out the boundaries, the surface area and the description of the properties in the area. The same institution also determines, or has determined, the owners of those properties and their address details.
The task of determining value is carried out by valuation commissions constituted within the institution concerned and composed of at least three members, or by way of the procurement of services. In making the valuation, the data obtained from persons, institutions and organisations specialising in property valuation, together with the information gathered from estate agents operating in the district, are also taken into account.
The Decision-Making and Contract Processes of the Owners
In risky areas, and on plots on which risky structures are situated, transformation is founded upon the intention formed by an absolute majority of the owners. The owners may carry out the transformation by reaching agreement with public institutions or with contractors. At the contract stage, headings such as the proportions of apportionment, the costs of construction and the independent units to be allocated to the rightholders come to the fore.
The Decision-Making Procedure and the Majority
In risky areas transformation proceeds in the first instance upon the initiative of the owners of the properties. The owners may reach agreement among themselves and go forward with a contracting firm, or they may equally act jointly with public institutions, as in the case of a municipality or of the Housing Development Administration (TOKİ).
The decision formed by an absolute majority of the owners in proportion to their shares is binding. That decision, together with the proposal containing the terms of the agreement, is served through a notary on the owners who did not join the decision, or is formally announced by being posted at the relevant headman’s office for fifteen days. Where the route of posting at the headman’s office has been taken, the final day of the posting is treated as the date of notification.
Where the proposal is not examined within fifteen days running from the date on which notification was made, or is not accepted within the same period, the owners concerned must be notified that their land shares will be put up for sale under the Act.
As regards the shares of the owners who did not join the decision, the course to be followed is this: the shares are first offered to the other owners by way of public auction. If none of the owners takes up those shares, the shares in question may be purchased by TOKİ or by the administration concerned at the market value determined by it.
The Contract Between the Owners and the Contractor
Since the owners of the properties do not possess the necessary technical resources or the permits required for contracting work, working with a contractor during the transformation process is a legal necessity. Determining the terms of that cooperation clearly from the outset is a precondition of the process proceeding soundly. A contract clearly setting out the rights and obligations of the parties must therefore be drawn up.
Contracts of this kind determine how the construction process is to advance, the responsibilities of the parties and the principles of apportionment. In risky areas the relationship established between the owners and the contractor rests essentially on two models:
- Construction and building contract: The owners bear the cost of the construction; what is obtained from the contractor is only the construction service.
- Construction contract in return for flats: The contractor leaves the owners a determined proportion of the independent units; the remaining units it may keep for itself or sell to third parties.
The Apportionment Agreement Between the Owners and the Administration
Some projects conducted in risky areas are carried out by the hand of public institutions such as a municipality or TOKİ. In such cases an apportionment agreement is concluded to which the owners and the administration concerned are party. The agreement determines the details relating to the dwelling or business premises to be allocated to the rightholders, the principles of apportionment and the obligations assumed by the two sides.
Matters to be observed in the apportionment agreement
- Appraisal and setting off: The appraised value of the owners’ former property must be determined by independent experts and that sum must be deducted from the construction cost of the new dwelling or business premises to be allocated to them. It is decisive, if the owners are not to suffer loss, that the value assessed should reflect the current reality of the market.
- Priority for building on the same site: As a rule, the new building should rise on the same site. Where the existing site is not suitable for technical or legal reasons, the transformation may be carried out in reserve areas or in other districts. In that event the owners must be informed, their consent must be obtained and alternative solutions must be offered to them.
The Eviction and Demolition Stage in Risky Areas
Where an objection directed against the determination of a risky area or structure is dismissed, or where no objection at all is made to the determination of a risky structure, the determination becomes final. A determination that has become final is announced to all those concerned by official service, in accordance with the procedures indicated in the Act and the regulation.
Following service, the owners are allowed a period of at most 90 days in which to vacate and demolish the building. Within that period the building must be evacuated and demolished by the owner or the rightholders.
Where the building is not evacuated and demolished by the owner or the rightholders, official notification is given to the institutions and organisations concerned with a view to the suspension of basic infrastructure services such as natural gas, water and electricity. After this stage, buildings still standing despite the period allowed are reported to the civil administrative authority; the eviction and demolition operations are carried out by the Administration with the police support provided by that authority, or are carried out by authorised persons and organisations.
Where the demolition is not carried out by the owners within the period, the costs of the eviction and demolition carried out by or on behalf of the Administration are recovered from the owners in proportion to their shares.
The Assistance and Support Provided to Rightholders
Various forms of state support are available to rightholders during the transformation process. This support falls under different headings such as rent assistance, interest support and alternative housing solutions. It is appropriate for rightholders to examine these opportunities in detail in order to benefit from the process to the fullest extent.
State support offered within the scope of transformation
The purpose of the support provided by the state within the scope of transformation projects is to prevent rightholders from suffering loss. The principal forms of assistance offered within the framework of Act No. 6306 and the related legislation are the following:
- Exemptions from taxes and duties: Exemption is granted from a great many duties and taxes, foremost among them land registry fees, notary fees and stamp duty.
- Rent assistance: Rent support is provided, for determined periods and in determined amounts, to owners in risky structures and in reserve building areas.
- Interest support: Interest support is provided, at determined rates, in respect of loans used for transformation projects.
- Lump-sum relocation assistance: Relocation assistance is paid in a single sum to tenants and to holders of limited rights in rem.
- Support directed at owners of informal dwellings: Rent assistance may be paid, for determined periods and in determined amounts, in risky building areas.
In order to benefit from these opportunities, rightholders must make an application to the institutions concerned.
Legal Disputes Encountered in the Transformation Process
Transformation conducted in risky areas is not merely an activity of physical renewal but at the same time a legal process. Proceeding within the framework of Act No. 6306, the Act on the Transformation of Areas at Disaster Risk, that process gives rise to a series of rights and responsibilities for property owners and other rightholders. In practice, risky area decisions and the other administrative acts of the process are frequently made the subject of legal objection. Taking legal precautions at every stage is of further importance if a loss of rights is to be avoided.
At Which Stages of the Process May an Action Be Brought?
- The requirement that risky area decisions be lawful. Risky area decisions taken by the President must be consistent with the legislation in force and must be made in a form amenable to legal review. Decisions defective in respect of any of the elements of competence, subject matter, cause, purpose and form may give rise to loss for rightholders.
- An action for annulment in the event of unlawfulness. If the decision is unlawful, the rightholders, the citizens affected by the decision or the institutions concerned may apply to the Council of State and seek the removal of the act by bringing an action for annulment. Pursuing that route depends on the unlawfulness being established and on the time limit for bringing an action being observed.
- The other administrative acts within the process. The acts performed during transformation are not confined to decisions of the President; TOKİ, the Ministry of Environment, Urbanisation and Climate Change, municipalities and other public institutions may also take decisions. The lawfulness of those decisions is likewise required in respect of the same five elements.
Which Judicial Body Is Applied To?
The judicial forum with jurisdiction over administrative acts found to be unlawful during the transformation process varies according to the nature of the act:
- In respect of acts performed by municipalities, by the Ministry or by other public institutions, an action for annulment may be brought before the Administrative Court, the Regional Administrative Court or the Council of State.
- Risky area decisions taken by the President, on the other hand, may be made the subject of an action for annulment directly before the Council of State.
Frequently Asked Questions
What is a risky area and how is it determined?
Districts declared by a decision of the President which carry a danger of loss of life and property by reason of the characteristics of the ground or of the development upon it are treated as risky areas. For the determination, documents such as technical reports, coordinated boundary maps and geoscientific surveys are annexed to the application.
Who may request the determination of a risky area?
A request to that effect may be advanced by the Housing Development Administration (TOKİ), by municipalities or by natural and legal persons holding the capacity of owner of a property. Applications are directed to the Presidency of Urban Transformation.
May an objection be made to the declaration of a risky area?
It may. An action for annulment may be brought before the Council of State within 30 days running from the day of service. A stay of execution may also be sought in the course of the proceedings.
What are the rights of property owners in risky areas?
Owners have the opportunity to become rightholders in the new building to the extent of the value of their property, to receive rent assistance and to benefit from low-interest loan support. In addition, they may take a decision by a majority and choose a contractor, or reach agreement with TOKİ.
How does the transformation process work in a risky area?
The first step is the declaration of a risky area. Planning is then carried out, values are assessed and the project takes definite shape with the participation of the owners. Once agreement has been reached, the process moves to eviction and demolition; when the new building is complete, it is delivered to the rightholders.
How is the value of properties in a risky area determined?
Valuation is carried out by a valuation commission composed of at least three persons, on the basis of the Expropriation Act No. 2942 and the standards laid down by the Capital Markets Board. This stage is conducted meticulously so that the owners do not suffer a loss of rights.
What are the state benefits during the transformation process?
The principal items from which rightholders may benefit are rent assistance varying between 18 and 48 months, interest support, exemption from notary and land registry fees, and relocation assistance. Relocation assistance is paid to tenants as well.
How long is the period for eviction, and is forced eviction possible?
The period for eviction allowed to owners is at least 15 to 30 days. Where agreement cannot be reached, an additional period is granted by notification through a notary. If the premises are still not vacated, natural gas, water and electricity may be cut off and recourse may be had to forced eviction.
How is the new building constructed after demolition?
After the demolition the owners may choose either to conclude a contract with a contractor in return for a land share or to reach agreement with TOKİ and bring the transformation to a conclusion. The construction cost of the new building is calculated on the basis of setting off.
How are rights protected against the declaration of a risky area?
To prevent a loss of rights, the land registry records must be kept up to date, knowledge must be acquired of the state benefits available, and professional legal support must be obtained at every stage of the contracts.
Related Topics
The following subjects may be consulted for other headings of the urban transformation legislation:
- The Urban Transformation Process in Risky Structures
- Objection to and Annulment of a Risky Structure Decision
- What Is a Risky Structure? How Is a Risky Structure Determined?
- The Rights of Owners Who Do Not Comply with an Urban Transformation Decision
- Termination of Construction Contracts Relating to Urban Transformation
- Strengthening Decisions in Risky Structures
Independent Legal Assessment
What distinguishes the risky area regime from building-based transformation is that the decision is given in respect of the district as a whole rather than of individual buildings. The legal position of an owner may therefore change independently of the technical condition of their own property; the suspension of zoning and development transactions, planning decisions and valuations directly affect the exercise of the right to property. The most frequent error in practice is to suppose that the process consists solely of the negotiation to be conducted with a contractor, and to lose sight of the administrative stages.
It must not be forgotten that an action for annulment to be brought before the Council of State against a risky area decision is subject to a time limit, whereas the subsequent acts, such as planning, valuation and eviction, may each be made the subject of a separate action. Recording the dates of the services and the postings at every stage of the process forms the basis of the claims to be advanced later.
In a specific file, it is appropriate to give priority in particular to the following headings:
- Examining the risky area decision as to the elements of competence, cause and form, and calculating the time limit for bringing an action
- Comparing the value in the valuation commission’s report with current market data
- Documenting the periods relating to service of the absolute majority decision and to the posting at the headman’s office
- Regulating expressly, in the contract to be signed with the contractor or the administration, the principles governing setting off
- Diarising the periods allowed for eviction and demolition and monitoring liability for the costs of demolition
- Making the applications for rent assistance, interest support and exemption from duties within time
Independent Legal provides advisory services and conducts litigation at every stage of the urban transformation process, from the declaration of a risky area to the disputes arising on delivery of the new building.