Transformation in Risky Structures: The Legal Stages

In a building that has acquired risky structure status, transformation is a chain made up of the links of determination, service, objection, decision-making, evacuation, demolition and reconstruction. Each stage has its own time limits and its own risks of a loss of rights.

In Türkiye, a country situated over active fault lines, earthquakes are a constant threat bearing directly on the building stock. Buildings that have exceeded their age and offer low resistance compound that threat. In order to limit the destruction an earthquake would cause and to create safe living spaces, a transformation mechanism for risky structures has been put into effect, and the legal infrastructure to govern the renewal process has been separately regulated.

Extending from the determination exercise through to evacuation, and from the rights afforded to owners through to the incentives provided by the State, this process presents a multi-stage structure in which technical and legal links are interwoven. The rights and obligations that arise concern not only the owners of the building but also the tenants residing in it.

In this briefing note we address in turn the legal framework of the transformation process, the avenues of application and its stages, and we also touch upon the points at each link which, if overlooked, may lead to a loss of rights.

The identification, evacuation and reconstruction of risky structures are regulated by Act No. 6306 on the Transformation of Areas at Disaster Risk. Transformation is not merely an activity of physical renewal; it is a graduated exercise requiring the legal procedures to be followed meticulously at every stage.

The Concept of the Risky Structure

A risky structure denotes a structure that has exhausted its economic life or that has been shown by scientific and technical data to carry a danger of severe damage or of collapse. For a building to be made the subject of transformation, at least one of the following criteria must be satisfied: that the structure is under a danger of severe damage or of collapse, that it has exhausted its economic life, and that one of these matters has been established on the basis of scientific and technical data.

A determination is not an assessment made by looking at the building with the naked eye. Engineering reports, ground surveys and technical analyses are assessed together. The process is conducted by authorised institutions and organisations in accordance with the procedure laid down by the legislation.

Structures That May Be Subject to a Determination

Which structures may be the subject of a determination is set out expressly in Article 7(1) of the Implementing Regulation of Act No. 6306. The provision has narrowed the framework of the structures in respect of which a determination may be made. According to the Regulation, a determination may be carried out in respect of structures in which people maintain their lives, structures in which animals are housed, and structures used for the purpose of protecting goods.

By contrast, structures under construction that are not yet completed and are not inhabited, together with abandoned and unused derelict structures, have been left outside the scope of the determination.

The Power to Request a Determination

As a rule, the determination is carried out at the instance of the owners of the structure or their legal representatives, at their own cost. If no construction servitude or condominium ownership has been established over the structure, that power passes to the holder of the land share.

The owners are not the only authority able to commence the process; the competent administrations may also step in. The Presidency or the relevant administration may allow the owners a period and require them to have the determination made. If the owners do not act within the period allowed, the determination is made of its own motion by the Presidency or the Administration. It is also possible for the Presidency to allow the relevant administrations a period and request them to carry out the determination. The purpose of these provisions is to guarantee that the process advances rapidly and effectively.

Notification of the Determination to the Owners

The procedure for notification is subject to the rules under Act No. 6306 and is intended to ensure that rightholders are informed of the process.

At the first step, the determination report prepared by the competent administration or by the licensed organisation is sent to the relevant directorate. If the report is found to be complete, it is approved and entered in the land register within 10 working days at the latest; the fact that the immovable is risky thereby passes into the official records. Thereafter the stage of informing the rightholders begins.

Service is effected by the following methods:

Publication of an announcement on the subject on the Presidency’s website
Dispatch of a notification to the owners through the e-Government Gateway
Posting of the Annex-6 record on the structure in lieu of service
Announcement of the matter at the headmanship for a period of 15 days

Objection to the Determination and Recourse to the Courts

Rightholders who take the view that the determination report obtained does not reflect the true situation may have recourse both to administrative objection and to the judicial route. Basic information on these two avenues is set out below, and the subject is examined in detail in the study entitled “Objection and Action for Annulment Against a Risky Structure Decision”.

Administrative Objection

When a building is determined to be a risky structure, the situation is entered in the land register and served upon the owners. The owners or their legal representatives may object within 15 days following the date of service. The authority for objections is the Urban Transformation Directorate; in provinces where no such directorate exists, the application is made to the Provincial Directorate of Environment and Urbanisation. If the Presidency has delegated authority, objections may also be addressed to municipalities or to provincial special administrations.

Technical panels are established by the Presidency to examine objections. The panel is not bound solely by the grounds advanced in the notice of objection; it reviews in its entirety the conformity of the report with the law and with technical requirements. Following any necessary corrections, a final decision is given on whether the structure is risky and the outcome is notified to the objector.

The decision given by the panel is final; a second objection made by another owner in respect of the same structure is not taken into account.

Bringing an Action Before the Administrative Courts

Since decisions concerning a risky structure determination bear the character of an administrative act, they are open to judicial review. Pursuant to Article 125 of the Constitution of the Republic of Türkiye, owners may bring an administrative action upon the rejection of their objection, or directly against the determination report.

Time limit for bringing an action. An action must be brought within 30 days from the date on which the objection was rejected or on which service was effected. This period is a preclusive period; if it is missed, the right of action lapses.

Persons who may bring an action. The power is conferred on owners holding title to the immovable, on legal representatives and on heirs. Tenants and holders of rights in rem have no opportunity to bring an action.

Bringing an action directly. Recourse may be had directly to an action without awaiting the outcome of the objection stage. An action may be brought on the grounds that the administration carrying out the act lacked competence, that the scientific bases were deficient, or that the act was unlawful.

Court with subject-matter and territorial jurisdiction. In actions for annulment concerning a determination, subject-matter jurisdiction lies with the Administrative Court; the court with territorial jurisdiction is the Administrative Court of the place where the structure is located.

Stay of execution. Together with the action for annulment, the owners have the right to request a stay of execution. Such a decision temporarily suspends steps such as evacuation or demolition. The court decides by assessing together the unlawfulness of the act and the condition of damage that is difficult to make good.

The Transformation Decision and the Common Will of the Owners

The process takes shape in accordance with the decisions the owners take together. The stage begins with the notice convening the meeting and continues with the taking of decisions relating to the project. Owners who do not join the decision are served with formal notification and are informed of their rights. Compliance with the rules on service is decisive if the process is to advance transparently and lawfully. The choice among options such as demolition, strengthening or reconstruction is made by the common will of the owners.

Holding the Meeting and the Decision Quorum

Once the risky structure decision has become final and been entered in the land register, the condominium owners are required to come together and decide how the transformation is to be carried out. The decision is taken by an absolute majority (50%+1) of the owners.

Procedure for the Notice Convening the Meeting

In buildings holding risky structure status, the condominium owners must be summoned to a meeting in order to commence the process. Although Act No. 6306 has introduced no special provision on this subject, the provisions of the Condominium Ownership Act No. 634 may be applied by analogy.

The principles concerning the procedure for the notice are as follows:

Those entitled to convene: The notice convening the meeting may be requested by the manager, the auditor or at least one third of the condominium owners.
Timing and form of the notification: The notification must reach the condominium owners at least 15 days before the date of the meeting. The notification is made by way of a notice or by registered letter.
Disclosure of the agenda: The text of the notice must expressly set out the purpose of the meeting and the agenda items to be discussed.

The validity of a meeting held in a manner contrary to the procedure for the notice is subject to review by the Civil Court of Peace. The letter of invitation must expressly state that the meeting has been arranged in order to discuss the transformation arrangements to be made in accordance with the risky structure decision.

For the delivery of the invitation, one of the following three methods may be used: a written notice to be given to all co-owners against signature, dispatch by registered letter, or, where necessary, notification through a notary public.

Decisions That May Be Taken at the Meeting

Following the finality of the determination, the future of the building is resolved by an absolute majority (50% +1) of the condominium owners. That meeting is the most critical stage determining the course of the process. The decisions that may come onto the agenda are as follows:

Making a choice in favour of strengthening or reconstructing the structure,
Shaping the new project and the floor plans,
Determining the contractor and settling the terms of the contract,
How financing is to be secured and how State support is to be used,
Planning the demolition and establishing arrangements for temporary accommodation,
Determining the steps to be taken in respect of owners who do not join the decision,
Putting up for sale the land shares of owners who do not participate in the transformation.

Service on Owners Who Do Not Join the Decision

The decision taken, together with the offer containing the terms of the agreement — or the place where the offer may be examined — is notified to the owners who do not join the decision, pursuant to Article 15 of the Implementing Regulation of Act No. 6306, by one of the following methods:

For owners who have notified an electronic service address to the land registry → by way of electronic service
For owners who have not notified such an address → through a notary public
In risky structures → by drawing up the Annex-8 form and announcing it at the relevant headmanship for a period of 15 days
In risky areas and reserve building areas → by drawing up the Annex-10 form and announcing it at the relevant headmanship for a period of 15 days

Sale of the Land Shares of Owners Who Do Not Join the Decision

Once the decision has been taken, the record of the decision, drawn up in the form of a “Joint Decision Protocol”, is served on the non-participating owners through a notary public. In the service, the owners are allowed a period of 15 days and are informed that, if they do not adopt the decision within that period, their land shares will be put up for public auction.

The land shares of owners who do not accept the decision and the offer within the statutory period of 15 days are sold by public auction to the other co-owners who have reached agreement, once the current market value has been determined by the Presidency and provided that the price is not below that value.

How the Public Auction Operates

The place and time of the public auction are announced to all owners in accordance with the provisions of the Notification Act. Only owners who have signed the “Joint Decision Protocol”, or their legal representatives, may take part in the auction. An owner who has not joined the decision may remain outside the sale process by signing the protocol before the auction is held.

Remedies Against the Sale

An owner who has not taken part in the process may object to the sale of their share. The grounds of objection generally fall under two headings:

The price being set below market value: An owner who takes the view that the sale price has been fixed at an unfair level may apply to the court.
The sale being conducted contrary to procedure: If the transaction has not been carried out lawfully, the owner may request the annulment of the sale.

Where it is established that the price has been calculated at too low a figure, the court may rule that the difference be paid to the former owner, or it may equally annul the sale transaction.

Since applications concerning the sale of shares bear the character of an administrative act, they may be taken to the administrative courts within 30 days from the date of service. By contrast, transactions such as the determination of the price are not of a character capable of forming the subject of an action on their own.

Owners may also apply to the superior authority and request that the administrative act be amended or withdrawn. Such an application suspends the time limit for bringing an action.

Evacuation and Demolition of the Risky Structure

A determination becomes final through the objection period not being used or through the objection made being rejected. Following finality, the relevant directorate requests the administration to demolish the structure and the evacuation and demolition process begins.

The Evacuation Period and the Obligations of the Owners

The administration gives those residing in the risky structure a period of at least 90 days for evacuation and demolition. That period is allowed on one occasion only; the owners of the structure are expected to vacate the immovable and undertake the demolition within the period. Pursuant to Article 8(3) of the Regulation, if evacuation has not taken place or demolition has not been carried out at the end of the period, the administration exercises its power to carry out the demolition of its own motion.

During the evacuation period the cutting off of electricity, water and natural gas services may be requested; the relevant public institutions are obliged to comply with that request. It is also possible for a criminal complaint to be lodged and criminal sanctions imposed in respect of owners who obstruct the evacuation.

Enforced Evacuation

If the owners do not carry out the evacuation within the period given, the enforced evacuation process may be operated. The civil administrative authority may, with the support of law enforcement, secure entry into the structure; closed areas may be opened. The operation is conducted after the necessary written permissions have been obtained and accompanied by security measures.

Where the evacuation is resisted, a record is drawn up in respect of those obstructing it and a criminal complaint is lodged. Evacuation conducted with law enforcement support is a procedure of importance from the standpoint of maintaining public safety.

Construction of a New Building in Place of the Demolished Structure

Once the demolition has been completed, a decision may be taken to conclude a construction contract over the remaining plot of land. The method most frequently preferred in practice is the conclusion of a construction contract in return for a land share. That said, the parties may also conclude different construction contracts on whatever terms they wish.

The most decisive choice made by the landowners at this stage is the selection of the contractor and the conclusion of the construction contract in return for a land share. That contract gives the contractor the opportunity to acquire shares over the land in return for the independent units in the building it will construct on behalf of the landowner.

This contract is subject to a formal requirement; to be valid it must be drawn up before a notary public or at the land registry. Otherwise the contract is regarded as legally invalid.

The basic obligations of the contractor that must appear in the contract are as follows: completing the construction in conformity with the rules of science and engineering, obtaining the building permit and establishing the construction servitude, and delivering the independent units within the agreed period.

The contractor’s obligations are not limited to statutory requirements. Additional undertakings may also be added to the contract by agreement of the parties.

Additional obligations that may be agreed:

Provision of security and guarantees: The contractor may undertake to pay a contractual penalty if it fails to complete the construction within the specified period; it may also offer financial security by providing a bank letter of guarantee.
Accommodation support: The allocation of temporary housing or rent assistance may be agreed so that the owners do not suffer hardship during the construction.
Material and quality conditions: The use of materials meeting particular quality standards and the conduct of the construction in conformity with the technical specification may be inserted into the contract as conditions.
Compliance with architectural preferences: It may be agreed that the floor plans or the internal arrangements of the flats be shaped according to particular criteria in line with the owners’ requests.
Common and social areas: In projects of a housing-estate character, the construction of car parks, children’s play areas, a gym or social facilities may be imposed on the contractor as an additional obligation.
Delivery timetable and sanction for delay: It may be undertaken that the construction be completed within the agreed period; provision may be made for daily contractual damages to be paid to the owners in the event of delay.
Construction completion insurance: The taking out of insurance against the possibility that the construction is not completed or that delivery is incomplete or defective may be included in the contract.
Warranty and maintenance undertaking: The contractor may undertake to remedy defects arising in the structure for a specified period after delivery.

Inserting such additional undertakings into the text secures the owners’ rights and enables the project to progress more soundly. In selecting the contractor, financial capacity should be considered as much as technical capacity, and the contract should be prepared with legal advice.

The Owners’ Rights of Objection to the New Project

The protection of the owners’ rights and the fair conduct of the process are of great importance in transformation. When a new construction project is commenced, the contract concluded with the contractor must be prepared meticulously so as to protect the owners. Nevertheless, in some cases the terms of the contract may give rise to heavy burdens for the owners, may create inequality between the parties or may be unlawful. In such cases the owners may exercise their rights of objection and request that the agreement be reconsidered.

The principal grounds of objection on which owners may rely:

Unbalanced and inequitable terms: Clauses imposing unjust or heavy obligations against the owners, allocation and payment terms liable to cause a loss of rights, and provisions conferring a unilateral advantage on the contractor alone.
Clauses imposing a disproportionate financial burden: Payment terms carrying the owners’ financial burden beyond reasonable limits, and provisions leaving the loss with the owners while no sanction whatsoever is applied to the contractor in the event of delay.
Defects vitiating validity: Contracts concluded without the required number of signatures having been reached, becoming party to a contract without an absolute majority (50%+1) having been secured, and the inclusion of certain owners within the scope of the contract against their will.

Owners may bring an action before the Civil Court of First Instance for the annulment of terms that are unequal or incompatible with equity. The court examines whether the terms are fair and whether the owners’ rights have been infringed. Where an infringement exists, it may be decided that the relevant clauses be annulled or brought to a more balanced content.

In the case of contracts that are invalid by reason of the number of signatures, the court may rule that the text be annulled in its entirety or be reconsidered.

State Support Provided to Rightholders

Various forms of support and incentives are provided for rightholders who suffer hardship on account of a risky structure during the transformation process. These instruments aim to improve the living conditions of rightholders and to enable them to live in a safer and more sustainable environment, and they are made available subject to certain conditions. The range of support extends from rent assistance to financial incentives, and from tax exemptions to the allocation of temporary housing and business premises. These facilities are important in that they increase the efficiency of projects and contribute to the successful completion of the process.

Rent Assistance and the Application Procedure

Foremost among the forms of support provided under Act No. 6306 to owners and tenants evacuated from a risky structure is rent assistance. This support is directed in particular at meeting the temporary accommodation needs of those living in risky areas. The principles of the scheme are as follows.

Time limit for application and the competent authority:

The application must be made within one year from the date of evacuation or from the date on which the structure was demolished.
Applications are made through the relevant Municipality or Directorate.

Duration of the assistance:

If the application is accepted, rent assistance may be provided to rightholders for up to 18 months.
In risky areas and reserve building areas that period may extend to up to 48 months.

Conditions required:

The applicant must be resident in the risky structure.
The application must be found appropriate and the status of rightholder must be verified.

Persons who may benefit:

Owners, tenants, holders of limited rights in rem and those residing in the caretaker’s flat may benefit from the support.
The amount to be paid and the duration of the assistance may differ according to the type of rightholder status of the applicant.

Determination of the amount and payment:

The amount of assistance is determined through transactions carried out via the A.R.A.A.D. Information System.
Payments are made on the basis of the rent figure determined.

Transformation Loans and Other Financial Facilities

The financial support offered to rightholders plays a decisive role in the renewal of risky structures. The most widely used among these are State-supported interest-subsidised loans.

Character of the loan:

The urban transformation loan is a State-supported form of credit made available for the purpose of renewing risky structures.
The loan is offered at a low rate of interest and applications are made within the framework of Article 7 of Act No. 6306.

Conditions of application:

A risky structure determination must first have been obtained.
The application process is conducted in such a way that financing is provided at the interest rates determined.

Terms and interest rates:

The principles concerning the loan and the interest subsidy are determined by Presidential decision and may change each year. Within the framework of the Presidential decision dated 13.04.2023, numbered 32162 and bearing decision number 7065, the maximum amounts and rates have been fixed as follows.

The term is applied as 10 years for dwellings and 7 years for business premises.
For rightholders owning more than one dwelling, an interest subsidy of 8.4% is applied to housing construction and acquisition loans relating to the first dwelling; for second and subsequent dwellings that rate has been set at 7.2% per annum. For business premises construction and acquisition loans the subsidy rate is 4.8%.
The upper limit of the interest-subsidised loan that may be made available to a rightholder is TRY 1,250,000. For rightholders owning more than one independent unit, the total loan for which an interest subsidy will be provided may be at most TRY 3,000,000, provided that it does not exceed TRY 1,250,000 for each independent unit.

Those who may benefit from the loan:

Holders of limited rights in rem in risky structures,
Rightholders wishing to rebuild their dwelling.

Exemptions provided:

Exemption is granted from burdens such as notarial fees and the banking and insurance transactions tax in respect of transactions falling within the scope of the loan.

Conditions for Benefiting from the Incentives

The incentives provided by the State aim to lighten the economic burden on rightholders. Rent assistance, interest subsidies and fee exemptions are the principal facilities within that scope. However, benefiting from these facilities depends on the fulfilment of certain conditions.

Choice of type of support:

Only one of the urban transformation loan and rent assistance forms of support may be chosen and used.
Which support is to be chosen is determined in line with the applicant’s needs.

Time limits and conditions of application:

Applications must be made within the periods laid down in the relevant legislation.
For instance, in the case of rent assistance the application must be made within one year from the date of evacuation or demolition.
In applications for a transformation loan, the interest rates and credit limits that have been determined apply.

Other Briefing Notes on the Subject

The following headings may be examined for detailed information on the different links of the transformation process:

What Is a Risky Structure? How Is a Risky Structure Determination Carried Out?
Objection and Action for Annulment Against a Risky Structure Decision
The Urban Transformation Process in Risky Areas
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

Transformation in risky structures consists of links that follow one another, each confined to short periods. The greater part of the losses of rights encountered in practice arises not from a legal error but from the timetable being overlooked: the 15-day objection period running from service of the determination, the 30-day period for bringing an action following a rejection decision, and the 15-day period allowed for a response to the joint decision protocol are critical thresholds in this respect. Remaining silent at one stage of the process also narrows the outcome that can be obtained at the next.

The second critical axis of the process is the contractual stage. While the determination and evacuation links bear an administrative character, the reconstruction stage rests entirely on a private law relationship, and it is here that the owners’ long-term interests are determined. In a concrete file it is appropriate to address the following headings as a priority:

Subjecting the technical bases of the determination report to an independent assessment before the objection period expires
Verifying by documents whether the notice convening the meeting was made in accordance with the procedure and whether the decision quorum was met
Reviewing whether service on the owners who did not join the decision was effected by the method set out in the Regulation
Examining in detail the determination of the current market value and the public auction procedure in the sale of land shares
Inserting security, delay damages and construction completion insurance provisions into the contractor’s contract from the outset
Making the choice between rent assistance and a transformation loan on the basis of a financial analysis before evacuation

Independent Legal provides advisory and litigation services at every stage of the process, from objecting to a risky structure determination through to the preparation of the contractor’s contract and the conduct of disputes arising out of transformation.