Construction Agreement in Return For Land Share

Notedly, the real estate sector in Turkey shows a rapid growth from 2008 to today. This growth enables many empty lands to be used for real estate construction in Anatolia and in big cities as well. One of the most common methods in the real estate sector is the construction agreement in return for land share. The owners of the land transfer their land shares to the contractors and receive a part of the real estate built in return for this.

Also: Escrow Agreement

 The act of acquiring real estate in exchange for land share is carried out within the framework of a contract, just like other real estate transactions. This process proceeds as the land owner transfers a certain part of the land to the contractor and the contractor transfers a part of the built part to the land owner. Agreement in return for land share is not defined in the Code of Obligations. Like other agreements made in accordance with the principle of freedom of contract in the law, the agreement in return for land share is considered valid unless it is against the law.

What is Construction Agreement in Return For Land Share?

This agreement which is committed to construction in Exchange for land shares, imposes certain debts on both parties. At the end of the agreement, the contractor is undertaken to undertake construction. The land owner is obliged to transfer a certain share of the land share to the contractor. In addition, the contractor is obliged to notify the land owner in case of extraordinary situations. In the agreement, the end date of the building must be clearly stated and the contractor must comply with this date.

The court in charge of the agreement in return for sale is related to the commercial nature of the work. While the Civil Courts of First Instance can be dealt with on these matters, the Commerical Courts of First Instance may also be on duty. The location of the case is related to the location of the real estate.

Terminations of Agreement

In order for the issue of termination in the said agreement to be brought to the agenda, one or both of the parties must not have fulfilled their debts, as in other types of agreements. When the building is not completed on the date stated in the agreement, the land owner is free to exercise his right of termination. He may request some of the rights from the contractor, arising from the fact that the service that has not been executed as specified in the agreement.

Before the termination of the agreement, the land owner also has the rights of asking for the loss of rent and the penal clause, which is stated in the agreement. Apart from these, the land owner may also request a compensation fee for defective works. When the building is finished, if a missing or defective work has been presented despite the stated terms in the contract, contractor may be requested to remedy the deficiencies in accordance with the contract.

The importance of real estate contracts is directly proportional to the material value of the structures that will emerge. Experiencing financial losses are most likely to happen as a result of contracts that are not made in accordance with the procedure. In order to prevent such losses, you can also benefit from Marhan Law Office’s experience when making a construction agreement in return for land share.