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What Did the Urban Transformation Law Change?


Ece Ergün

In our earthquake-prone country, Law No. 6306. on Transformation of Areas Under Disaster Risk (“Law”) also known as the Urban Transformation Law, is enforced to renew buildings lacking earthquake resistant. To amend the aforementioned Law, the Law on Amendments to the Law on the Transformation of Areas Under Disaster Risk and Some Laws and Law No. 375 Decree Law, was presented to the parliament on October 20, 2023 is enforced and the Law on Amendments to the Law on the Transformation of Areas Under Disaster Risk and Some Laws and Law No. 375 Decree Law No. 7471 (“Amendment Law”) was published in the Official Gazette dated 9 November, 2023.


The Amendment Law encompasses numerous changes, primarily aimed at expediting urban transformation processes. The significant changes within the Amendment Law are as follows:


Detection of Risky Buildings Ex Officio

Under the Amendment Law, the Urban Transformation Directorate (“Directorate”) or Municipalities (metropolitan or district) / Provincial Special Administrations (each, “Administration”) will have the authority to detect risky buildings ex officio ( without any request). The obligation to building owners granted a period to detect risky buildings themselves, has now been eliminated.


The Law Enforcement Support

In the situations when the detection of risky buildings is obstructed, the evacuation and demolition of buildings identified as risky buildings are prevented, or the relevant individuals cannot be reached during these processes the way to get support the law enforcement has been opened. In case of any these situations it is possible to unlock closed doors or access restricted areas with the support of law enforcement.


Decision-Making by Absolute Majority

Within the purview of the Amendment Law, the demolition threshold has shifted from a 2/3 majority to a redefined absolute majority, set at 50%+1 of the shareholders. Decisions taken by the building owners will be notified to those who do not participate in the decision through a notary or by being publicly announced for a 15-day period at the relevant neighborhood office.


Expediting The Notification Process to Building Owners

Another significant amendment pertains to the notification process. Under the current Law, all The Amendment Law addresses a prevalent issue encountered in practice, namely the regulation of notification procedures. Under the Amendment Law, notifications pertaining to the urban transformation process will be affixed to the relevant building, posted on individuals’ E-Devlet accounts, and announced at the headman’s office in the vicinity of the risky building for a 15-day period. In essence,individual notifications will no longer be dispatched to each building owner. Instead, once the announcement period at the headman’s office expires, it will be considered that notifications have been sent to every building owner.


In addition, instead of the initial period of at least 60 days and an additional period of at most 30 days given for demolition in the past, a single period of at least 90 days will be envisaged.


Reserve Building Area

With the Amendment Law, the definition of reserve building area in the Law has also been changed. With the change, the previously existing “new settlement area” limitation was eliminated. As per the amendment, areas with existing settlements can now be designated as “reserve areas” by the executive and the area in question can be included within the scope of the Law and enter the urban transformation process.


The reserve building area can be determined ex officio by the executive or upon request by real person or private law legal entity. If the transfer of 30% of the land square meters (the allowable building area) of the relavant real estate is allowed to be transferred or the associated cost is remitted to the Directorate, any person may request that a certain area be designated as a reserve building area.


In regions designated as reserve building areas, if stakeholders who do not align with the absolute majority decision are unable to sell their land shares to participating stakeholders constituting the absolute majority, said shares will be subject to purchase by the Directorate, Administration, or TOKİ at the prevailing market price, in contrast to the sale of at-risk buildings.


Another change brought by the Amendment Law regarding these areas involves the conferment of a legal right of pre-emption to the Directorate.In our law, pre-emption denotes a purchase right triggered when one of the stakeholders decides to sell their share in a jointly-owned real estate. In simpler terms, a stakeholder holding a share has the right to purchase it first, if he/she wishes, instead of selling it to a third party. This amendment endows the Directorate with the right of pre-emption, irrespective of whether it holds any share in the real estate.


Financial Aid Opportunity for Construction

Another amendment brought by the Amendment Law is regulation that provides financial assistance for construction, in addition to rental assistance, housing, or workplace allocation in the context of the urban transformation process. The procedures and principles governing construction assistance will be established by the Presidency. In the days to follow, through the implementation of these regulations, the specifics of how this new form of assistance will function, including its amount, duration, and whether it will be provided as a one-time benefit, will be duly addressed.


Changes Regarding Legal Process

The Amendment Law precludes the cessation of the urban transformation process when a lawsuit for the dissolution of the partnership is instigated by any or all of the owners. Through the regulation incorporated into the law, in the course of litigation aimed at dissolving a partnership, within the scope of the urban transformation process, stakeholders will continue to make decisions with an absolute majority commensurate with their shares and there will be no interruption of the ongoing process. If a legal process is initiated for sales transactions made within the scope of Law on the grounds of miscalculation of the sales price and the sale is canceled due to the incomplete price as a result of the lawsuit, the sales transaction will no longer become completely invalid. The price found to be incomplete will be paid to the seller and will not cause any interruption in the urban transformation process or any change in the title deed.


Significant changes have occurred regarding the administrative proceedings related to cancellation lawsuits filed solely concerning damages caused by the earthquake’s impact within the areas designated as disaster zones following the earthquake on February 6, 2023. The initiation of objection processes and the deadlines for submitting petitions within these initiated processes have been shortened, diverging from the general rules. Additionally, avenues for objections have been closed regarding the requested measures in annulment lawsuits initiated in these areas.


Conclusion

With the regulations added to the scope of the Amendment Law, changes have been made in many issues, especially notification process, reserve areas, periods, and legal processes. One of the main issues experienced within the scope of urban transformation processes was related to periods and notification procedures. In this context, we anticipate that the implemented changes introduced will have a positive impact on the mentioned processes. Nevertheless, we are of the opinion that the alterations and innovations related to the reserve areas may give rise to issues in various dimensions, especially in terms of property rights. Regardless of the outcomes, the amendments in the law and the innovations introduced signify the commencement of a new era in urban transformation.


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