Urban transformation projects are large-scale projects that are generally carried out for the purpose of renovating old or risky buildings and constructing new structures in their place. These projects may contribute to the development and security of cities, but may also cause negative effects for some flat owners. Urban transformation is a process that entered our lives with Law No. 6306 and its main purpose is to make buildings at risk of disaster healthy and safe.
The urban transformation process begins with either a region being declared a risky area or a particular building being defined as a risky building. From this point on, owners must decide by absolute majority (2/3 ratio was changed by the decree dated 09.11.2023) to accept or reject urban transformation applications.
The legislator stipulated that the land shares of owners who do not participate in the decisions taken in order to complete the urban transformation quickly will be sold at auction in accordance with legal regulations. However, all processes leading up to this sales transaction must comply with the Law and Implementation Regulation. Detection of illegality at any stage may prevent the sale transaction from being carried out.
Owners who do not agree with the urban transformation decision have the right to take legal action regarding the decisions and the sales transaction, citing such illegalities.
At this stage, it is important to evaluate the legal situation of the owners who do not participate in the decision. Because owners who do not participate in the decisions taken within the scope of urban transformation may face significant loss of rights, including the sale of their land shares.
1. What is Risky Building and Risky Area?
The first stage of urban transformation applications is the identification of risky buildings or declaration of risky areas. According to the definitions made according to the law;
A risky building is a building that has completed its economic life or is determined to be at risk of collapse or serious damage, based on scientific and technical data. According to this definition, for a building to be considered a risky building;
- Having completed its economic life, or
- It must bear the risk of collapse or serious damage.
In this context, if these issues are determined based on scientific and technical data, it will be possible to subject the building to urban transformation as a risky building.
Risky area refers to an area declared by the President that carries the risk of causing loss of life and property due to the ground structure or construction on it. The risky area can be declared ex officio by the President or as a result of the owners' application to the Ministry.
There is an important point at this point that the owners do not need to make any decisions for these transactions. Only an owner can claim that the building is a risky building or apply for a risky area declaration. For this reason, when the relevant transactions are against the law, any owner can object to the determination of a risky structure or take legal action against the declaration of a risky area. As a result of the use of objection or litigation methods or the expiry of the application period for these methods, the risky area detection or risky area declaration procedures become final. Urban transformation applications will begin after the procedures are finalized.
2. Decisions in the Urban Transformation Process
Decisions that can be taken during the urban transformation process are determined by at least two-thirds majority of the shares held by the real estate owners. Basically, owners can make three different decisions:
1. Reinforcement decision.
2. Demolition decision.
3. Demolition and reconstruction decision.
In general, the risky structure must be demolished. However, if the owners determine that it is technically possible to strengthen the risky building, the option of strengthening the risky building can be considered. In addition, owners can decide not only to demolish the building, but also to demolish it and rebuild it. If no decision is taken, the risky building will have to be demolished when the deadline given by the administration to the owners expires.
It seems that the most common decision taken in the urban transformation process is to demolish and rebuild the risky building. Owners can decide to demolish and rebuild the building by holding a meeting. It is important that all owners are notified of this meeting and it is necessary to ensure that all owners attend. However, if all owners do not attend the meeting despite the invitations, it is possible for those who attend the meeting to make decisions.
It is not mandatory for the decision taken to be in writing, but it would be a better practice to prove it with a written decision report. In addition to proving the decision with a signed report, it can also be proven with a contract signed with the contractor or a power of attorney given to the contractor. However, it is recommended to keep a signed decision report so that the decision taken can be more easily proven.
3. Notification of the Decision to Other Owners
It is extremely important to inform other owners of the decision taken and the terms of the contract with the contractor. Owners who do not agree with the decision can make an agreement with the contractor by accepting these conditions. For this reason, the decision taken and the terms of the contract must be notified to other owners. According to Article 15 of the Implementation Regulation, the decision taken and the offer containing the terms of the agreement must be notified to the owners who do not participate in the decision through a notary or in accordance with the Notification Law No. 7201. This notification should include the fact that they must accept the decision and offer within fifteen days, otherwise their land shares will be sold.
In accordance with Article 15 of the Implementation Regulation, a period of fifteen days begins after the notification is made to the owners who do not participate in the decision. During this period, owners are given time to accept or reject the decision and offer. This period starts and ends from the date of notification to the owners. Owners must evaluate the decision and offer within this period and, when necessary, decide whether to accept or reject it or use their right to object. At the end of this period, if the owners do not accept the decision and offer, the process of selling the land shares can begin.
4. What Are The Legal Remedies For Owners Who Do Not Want Urban Transformation?
Owners who do not agree with the urban transformation decision can object using legal means if they think that the transactions in the process are not in accordance with the law. They may file a lawsuit alleging that there are illegalities in the transaction stages. These cases are filed in the Civil Court of Peace and the court evaluates the transactions in terms of legality. If the transactions are found to be unlawful, the court may cancel the relevant transactions or order them to be corrected. Flat owners can use these methods to protect their legal rights and ensure a fair functioning of the urban transformation process.
4.1. Case for Cancellation of the Decision Taken by the Majority
If an owner who does not agree with the urban transformation decision thinks that the decision taken at the meeting is against the law, he can file an annulment lawsuit against this decision. In this case, the owner may claim that the two-thirds majority required for the decision was not obtained, that the meeting was not notified to him, or that the notification was irregular. This lawsuit can be filed in case of any irregularity or unlawfulness in the transaction. Since such cases are filed based on the Condominium Law No. 634, the competent court is the Civil Court of Peace. As a result of the lawsuit filed, the court evaluates the transactions and, if there is a violation of the law, may cancel the relevant decision or order it to be corrected. Owners can use this legal remedy to manage the urban transformation process fairly and protect their rights.
NEW PROCESS ACCORDING TO THE URBAN TRANSFORMATION LAW DATED 09.11.2023
The Law on Amendments to the Decree Law No. 375 came into force after being published in the Official Gazette No. 32364 dated 09.11.2023. This new regulation has led to various changes in the provisions of Law No. 6306. Urban transformation processes have gained importance, especially due to the increase in earthquake disasters in our country and the increase in the number of risky buildings. However, the problems experienced in this process caused the property rights of the rightful owners to be violated and the transformation of buildings declared as risky structures to be delayed.
The new law, published in the official gazette dated 09.11.2023, aims to eliminate these rights violations and ensure rapid urban transformation. However, this new regulation has led to some changes that may cause victimization in the process. Changes have been made to basic regulations such as deadlines, notification procedures and decision quorums. In this context, we should point out the most important changes as follows:
The majority required to take a risky building decision or to make a new contract on a property declared as a risky building has been reduced from 2/3 majority of the owners to an absolute majority. Both the 2/3 majority of the owners and the absolute majority calculations take into account the land share ratios of the owners. Land share ratio is of great importance in the urban transformation process and can have an advantageous impact on the decision-making process and the process of identifying risky buildings or concluding a new contract.
In the current situation, owners whose land share ratio is different according to the land registry must file a lawsuit for correction of their land shares. However, it should not be forgotten that they must file this lawsuit before the demolition of the property. Otherwise, the land share correction case filed for the demolished property may be rejected.
With the amendment dated 09.11.2023, the risky building detection process is carried out by abandoning the physical notification method and by notifying the owners via a report posted on the building and via e-government. Additionally, it is announced in the relevant headman's office for 15 days. If there is no objection within this period, the risky building identification process becomes final and the evacuation and demolition process begins.
In previous regulations regarding the evacuation of risky buildings, an initial period of 60 days was given, followed by a second period not exceeding 30 days, and if the property was not demolished within this period, demolition was carried out by the public/municipalities at the expense of the owners. However, with the new change, a single 90-day period is given for evacuation and demolition after the risky structure determination of the real estate is finalized. This regulation aims to complete the process faster.
In previous regulations, physical notification had to be made to each flat owner, and therefore demolition/evacuation periods could be constantly postponed due to owners living abroad or not wanting to receive notifications. With the new regulation, it has been deemed sufficient to hang a report on the immovable property instead of physical notification, to send a notification to the owners via e-government, and to post a notification in the headman's announcement for 15 days for the 90-day period to begin.
The new law also introduced the adoption of a notary notification or a 15-day announcement in the headman's office for share sales. This change makes it easier for the ministry to sell the shares of owners who do not agree with the decision of the absolute majority. However, this may cause the people who constitute the absolute majority to violate the property rights of other owners. Therefore, it is important to follow the notifications carefully and not to miss legal remedies.
New legal regulations have been made regarding the lawsuit for dissolution of partnership in risky structures and the results of this lawsuit. Previous legal regulations were interpreted as filing a lawsuit for dissolution of partnership in risky structures could prevent the start of the risky structure process and that both could not be carried out at the same time. However, with the new law, it has become clear that these two processes can be carried out simultaneously and that the sale of shares as a result of the dissolution of the partnership will not hinder the risky structure process. This arrangement provides owners with greater flexibility.
In addition, with the regulation introduced in 2019, the Ministry's ex officio termination authority was only applied to real estate sales promises and construction contracts in return for land share, while with the new regulation, the Ministry was given ex officio termination authority for all contracts related to construction construction. With this change, it has been clarified that the ministry has a broader termination authority for construction contracts. In order to apply for ex officio termination, it has been deemed sufficient to make an application with an absolute majority of the shares. This regulation contributes to the acceleration and regulation of the risky building process.
With the new regulations dated 09.11.2023, the duration of lawsuits to be filed against risky building determination decisions has been shortened and the possibility of objection against stay of execution decisions has been closed. In addition, the definition and scope of reserve building areas have been expanded and new prerequisites have been introduced for reserve building requests. Announcement and objection procedures regarding zoning and subdivision plans have been implemented in the field of application. The development process has been accelerated in the applications to be made by the Presidency. For this reason, it is important for those who want to get detailed information and legal support regarding the urban transformation process to get help from a lawyer who is an expert on the subject. Since urban transformation is a legal process that concerns everyone, including building owners and tenants, it will be useful to get support from a professional lawyer to prevent loss of rights.
An owner who does not agree with the urban transformation decision has the opportunity to protect his rights by using the following legal methods:
4.2. Objection Case to Sale and Sales Price:
If the owner thinks that the transactions carried out for the sale of his share are irregular or that the sale price of his share has been determined unlawfully, he can file an annulment lawsuit against this transaction. During the court process, it evaluates the legality of the transaction and the legality of the current price.
4.3. Objection to the Agreement Made with the Contractor:
- If the contract between the owners and the contractor contains provisions that are unfair or excessively burdensome, then an owner who does not make an agreement may file a lawsuit against the agreement made with the contractor. The court evaluates whether the agreement violates the owner's rights and whether it is signed by a sufficient number of owners. This type of case is heard in the Civil Court of First Instance.
These types of cases are just a few of the legal ways that owners can use to protect their rights during the urban transformation process. Owners should seek help from a lawyer for the best legal remedy for their situation, because each situation may be different and the guidance of an expert lawyer is of great importance in this process.
5. Sale of Land Shares of Owners Who Do Not Participate in the Urban Transformation Decision
The land shares of the owners who do not participate in the urban transformation decision and do not accept the offer will be sold first to the stakeholders who participate in the decision, according to the procedure specified in Article 15/A of the Implementation Regulation. However, if sales to stakeholders cannot be made, two different situations should be evaluated in terms of risky structures and risky areas.
5.1. If Urban Transformation is Carried Out in Risky Areas
When sales cannot be made to stakeholders in risky areas, the relevant land shares are registered ex officio in the name of the Treasury in the land registry, provided that the market price is paid by the Ministry. Shares registered in the name of the Treasury are deemed to have been allocated by the Ministry to be evaluated within the framework of the decision taken by the owners, or they may be transferred to TOKİ or the Administration in cases deemed appropriate by the Ministry.
5.2. If Urban Transformation is Carried Out in Risky Buildings
In risky structures, sales are attempted to stakeholders who reach an agreement or to third parties who accept the agreement, and the sales process is repeated until the buyer emerges.
6. Conditions for the Sale of Land Shares of Owners Who Do Not Participate in the Urban Transformation Decision
In order for urban transformation practices to continue, the shares of owners who do not participate in the decision must be sold. In order for the sale of shares to be considered lawful, the conditions required in Article 15/A of the Implementing Regulation must be met. These conditions are:
Risky building detection must have been made.
The first condition for the sale of land shares is that a risky structure has been identified. With this determination, the legal status of the relevant building changes and the urban transformation process begins.
The owners must have decided to sell shares.
Risky structure stakeholders can make decisions with at least a two-thirds majority of the shares regarding the implementation procedures to be carried out in the risky structure. "A signed decision report indicating that the owners agreed with at least a two-thirds majority, or documents such as a contract or power of attorney belonging to the agreeing owners, must be attached to the application."
Determination of the Fair Price to be Based on Share Sale
In the urban transformation process, the value of the shares of the owners whose shares will be sold should be determined before the sale. To determine this value, an authorized real estate appraisal company must be selected and this company must be licensed by the Capital Markets Board.
Notification of the Share Sale Decision to the Owners Who Are Opposed to the Decision
The decision taken regarding the share sale, together with the offer containing the terms of the agreement, must be notified to the owners who oppose the decision through a notary or in accordance with the Notification Law.
An owner who does not participate in the decision may declare his/her participation in order to prevent the sale of his share within fifteen days from the date he learns that he has received the notification. If no willingness to participate is shown during this period, the share sales process will continue.
Documents of notifying the owner who does not agree with the decision and the terms of the agreement and giving fifteen days for acceptance must be attached to the application.
Applying to the Directorate or Municipality
In order to carry out a share sale transaction, an application must be made to the relevant Directorate authorized in this regard or to the Municipality, if there is a delegation of authority.
7. Procedure for Selling Land Shares of Owners Who Do Not Participate in the Urban Transformation Decision
During the urban transformation process, a price determination commission and a sales commission are established within the relevant administration in order to sell the shares of building owners. These commissions are responsible for determining the fair value of land shares and carrying out the sales transaction. The fair value of land shares is determined by the price determination commission, taking into account the value of the real estate determined by the owners. No sales transaction can be made below this determined price.
8. Legal Remedies Against the Sale of Shares
Article 6/9 of Law No. 6306. According to the article, "A lawsuit can be filed against the administrative procedures established in accordance with this Law within thirty days from the date of notification, in accordance with the Administrative Procedure Law No. 2577 dated 6/1/1982."
Since rejection of the application for the sale of shares, determination of the price, announcement of the sale and sale of shares are transactions of an executive nature, a lawsuit can be filed against these transactions in the administrative court. However, these transactions cannot be directly sued on their own against non-executive transactions such as the determination of the price determination commission.
According to Article 11 of the Administrative Procedure Law No. 2577, "Before filing an administrative lawsuit by the relevant parties, the removal, withdrawal, modification or a new action of the administrative action must be requested from the higher authority, or if there is no higher authority, from the authority that has carried out the action within the period of filing an administrative lawsuit." "This application stops the period for filing an administrative lawsuit that has already started." Against the administrative transactions carried out within the scope of the share sale procedure, owners may, if they wish, apply to the higher authority to cancel, change or initiate a new transaction.
9. Frequently Asked Questions About the Process
Is it mandatory to hire a lawyer in Administrative Courts?
According to Turkish Law, there is no obligation to hire a lawyer in Administrative Courts, with certain exceptions. However, due to reasons such as the complex structure of Administrative Law and the strict and short periods in the Administrative Procedure Law, if the litigation process is carried out by non-lawyers, irreparable mistakes can be made both in terms of form and substance. For this reason, in order to avoid loss of rights in administrative litigation processes, it is recommended that you seek legal support from lawyers experienced in "Administrative Law" before taking action.
How to Calculate Absolute Majority?
The absolute majority calculation is made according to the land shares owned by the owners. In the transactions to be carried out after the demolition of risky buildings, the total land shares of the owners are taken into consideration and the calculation of the two-thirds majority is made based on these land shares. To reach the absolute majority, the total land shares owned by the owners are taken into account.
An owner who opposes the majority decision may declare that he wishes to participate in the decision within fifteen days from the date of notification of the decision regarding the share sale and the terms of the agreement. If the decision not to participate is not changed within this period, the land share of the owner who does not participate in the decision will be sold.
Who Determines the Fair Value in the Sale of Shares?
The fair value to be taken into account in the sale of shares is determined by the price determination commission, taking into account the value of the real estate determined by the owners. For this determination, an appraisal made by CMB licensed real estate appraisal companies is used.
Can the Price Determined for Share Sale Be Objected If It Is Lower Than the Current Price?
If the price determined for the share sale is below the market value determined by the owners, you can object to this situation. You have the right to appeal to the higher authority within thirty days from the notification of the price determination. Additionally, you can directly file an annulment lawsuit against the price determination without having to apply to a higher authority.