Construction contract in exchange for land

Construction contracts in return for flats, also known as construction contracts in return for land share, constitute a type of work contract regulated in Article 470 of the TBK. Work contracts are defined in the law as contracts in which the contractor undertakes to produce a work and the employer undertakes to pay a price in return. There is no legal definition for construction contracts in exchange for flats. However, the Supreme Court used the following definition in its established jurisprudence. Accordingly:

Construction contract in return for land share is a contract in which the land owner is obliged to transfer the ownership of certain shares of his land to the contractor, and in return, the contractor is obliged to build independent sections on the land and transfer those independent sections belonging to the land owner. (Erman, H: Construction Contract in Exchange for Land Share, 3rd Edition, Istanbul 2010, p. 1; Coşkun, G.: Legal Status of the Third Party Entitled to the Construction Contract in Exchange for Land Share, 1st Edition, Ankara 2010, p. 25).

Although the construction contract in return for flat is considered a type of work contract, it should not be forgotten that there are some differences between the two contracts. The first of these differences is the type of contractor's receivable. Namely; It is the money that the contractor will receive in return for his performance in the work contract. However, it is the land share that will be received by the contractor who created the construction work in the construction contract in return for flat. Another distinction between the two contracts arises from the formal requirement. We will discuss this issue further under the heading of figure below.

LEGAL NATURE OF CONSTRUCTION CONTRACT IN EXCHANGE FOR LAND

Construction contract in return for land share is one of the contracts that imposes a mutual debt on both parties (synallagmatic). With the contract, the contractor undertakes to build a building on the land with the qualifications agreed between the parties and in accordance with the zoning legislation, while the land owner or owners undertake to transfer the land share determined as performance.

In these contracts, in general, the contractor (contractor) undertakes to give a portion of the construction to be done with his own materials to the land owner, while the land owner undertakes to transfer a certain share of the land on which construction will be carried out in the name of the contractor in the title deed. In this way, the price of the flats and independent sections to be built and delivered by the contractor is paid in kind with the share to be given over the land.

In such contracts, the independent section or sections to be given by the contractor to the land owner may be from the construction to be carried out on the land allocated by the land owner, or from the construction of the contractor (contractor) in another location. According to this feature, the contract has a complex, two-type nature as a promise to build and sell, as it includes the obligation to build on the part of the contractor (contractor) and the commitment to transfer a share in the title deed on the part of the land owner (Kostakoğlu, C.: Judicial Construction Law and Construction Contracts for Flats, Istanbul, 2011, p.61).

In such contracts, in response to the specified debts of the contractor, the owner is obliged to pay a price in return for the work carried out on the land, through "land share transfer", as a primary obligation. In these contracts, the wage (price) to be paid by the business owner is paid monthly by the land owner. Since such contracts generally extend over many years, it is not possible to achieve the purpose of the contract by fulfilling only this fee during the performance period. For this reason, some side debts must be fulfilled by the business owner. These; Obligations such as delivering the land suitable for construction and free of defects without any legal or actual obstacles on it, obtaining the zoning status and construction license of the land, having the plans and projects approved by the municipality, which is the competent authority, selling the title deeds of the independent sections that the contractor deserves for financing, giving a power of attorney to the contractor when necessary for works and transactions such as establishing a floor easement, obtaining a settlement license, and transferring the land share determined in the contract. As a rule, in types of contracts that impose obligations on both parties, if one of the parties is not obliged to perform in advance, the debtor who does not perform his own obligation will not be able to demand the performance of his obligation from the other party (Prof. Dr. Ahmet M. Kılıçoğlu; General Provisions of Obligations Law, Prepared in accordance with the New Code of Obligations; Extended 15th Edition, Turhan Kitabevi, Ankara 2012, p.581).

This issue is regulated in Article 81 of the Turkish Code of Obligations, with the mandatory provision that "A person who requests the performance of a contract that includes reciprocal commitments must have fulfilled his or her own debt or offered to perform it, unless he or she has the right to benefit from a certain deadline depending on the terms and nature of the contract." The same issue is also stipulated in Article 97 of the Code of Obligations. Since Construction Contracts in Exchange for Land Share are among the types of contracts that impose obligations on both parties, the order of performance, that is, the question of which of the parties will be obliged to perform the performance first, is important. In such contracts, the contractor party, who is under the obligation to build a building, must first fulfill its obligation in accordance with the contract, and then request the land owner to fulfill its obligation. In other words, first of all, the work must be done in accordance with the contract, and then the land owner must be requested to fulfill his obligation. The land owner can carry out the land share transfer act in different ways. This action can be carried out either by transferring the agreed land shares to the contractor when the construction is completed, or by gradual transfer of title deed according to the stage of construction in the contract.

Construction contract in return for flat is an atypical, that is, anonymous contract type. It is debatable whether the contract is for immediate or continuous performance.

ELEMENTS OF CONSTRUCTION CONTRACT IN EXCHANGE FOR LAND

In order for the work in exchange for land contract to be valid, it must contain certain elements. The first of these elements is the mutual agreement of the parties, and as clearly stated in Article 1 of the Code, all contracts are established by the mutual and consistent declaration of the will of the parties. In addition to this general element, in construction contracts in exchange for flats, the land owner is obliged to transfer his land share. In return, the contractor will be under construction obligation. We will examine these elements in detail below.

a-Agreement between Land Owner and Contractor

As we mentioned above, the first and general element of all contracts is the mutual and compatible declarations of will of the parties. In order for the contract to be valid, the essential elements of the contract must be specified and accepted by the parties. The essential elements of construction contracts in exchange for flats are as follows:

-The Contractor undertakes the construction and delivery of the construction,

-The employer pays a fee for the work to be done.

The contract is deemed to have been established upon completion of the essential elements. The absence of side elements does not render the contract invalid. In such cases, interpretation should be made according to Article 19 of the Turkish Code of Obligations. Relevant law article; "In determining and interpreting the type and content of a contract, the true and common will of the parties is taken as basis, regardless of the words they use by mistake or to hide their true purposes." It is arranged as follows.

b- Land Owner Undertaking the Obligation to Transfer His Land Share

The commitment to transfer the land share, which is one of the essential elements of the contract, also constitutes the characteristic element of the construction contract in return for land share. As we mentioned above while explaining the differences between the work contract and the construction contract in exchange for flats, the land owner's obligation to pay the price is fulfilled through the transfer of the land share. Here, the land owner undertakes to transfer the land share in monthly installments instead of paying the price.

Various provisions can be added to the contract regarding when the business owner will transfer his land share. There is no legal obligation regarding the time of the transfer. The transfer process can be carried out during the start of work, construction of the work or delivery of the work.

c-Contractor Undertaking Construction Debt

A construction contract in exchange for flats is a type of contract that imposes mutual obligations on both parties. In return for the land owner's obligation to transfer his land share, the contractor also has the obligation to carry out construction. The Contractor must act in accordance with Article 471 of the Turkish Code of Obligations when fulfilling this debt. As clearly stated in the relevant article; The contractor must perform the actions he undertakes with loyalty and care, taking into account the justified interests of the employer.

TYPES OF CONSTRUCTION CONTRACTS IN EXCHANGE FOR LAND

It is possible to establish a construction contract in return for land share in various ways. Classifying the contract in these ways is based on the principle of transfer. As stated in the decision of the Supreme Court of Appeals HGK numbered 2020/1033:

In construction contracts in return for land share, the land owner can transfer the share to the contractor in different ways; Sometimes, a floor easement is established by the owner of that land for the independent sections of the building to be built on a land, which will be subject to condominium ownership in the future (Condominium Law No. 634, article 2/c), by committing to transfer a certain percentage of the land share corresponding to the independent sections decided to be given to the contractor in the contract, the transfer is made to the contractor as agreed in the contract.

Sometimes, the land title deed is transferred to the contractor in its entirety without establishing a floor easement on the land, and in the future, when the construction is completed, a floor easement is established and the floor easement list is made together according to the sharing in the contract.

Sometimes, the contract decides on a gradual transfer of title deeds according to the stage of construction and the transfer is made accordingly by the land owner.

The most common form of transfer in practice is the transfer in which the land owner promises to sell the land shares that need to be transferred and the contractor undertakes to carry out the construction. Accordingly, the contractor will fulfill his/her performance in accordance with the contract, and in return may request the land owner to register the share committed to be transferred in his/her name. In this type, the real estate sales promise contract and the construction contract in exchange for flats are made together.

FORM OF CONSTRUCTION CONTRACT IN EXCHANGE FOR LAND

Construction contracts in return for flats differ from work contracts in terms of form. As we mentioned above, this contract is a mixed contract type consisting of the combination of a work contract and a real estate sales promise contract. In Article 237 of the Turkish Code of Obligations, it is clearly regulated that a sales promise contract can only be drawn up officially. Therefore, the validity of the construction contract in return for land share depends on its official conclusion. The authority and duty to make real estate sales promise contracts, Notary Law No. 1512, art. It was granted to notaries within the framework of Article 60/f.3 and it was recorded that the official form would be in the form of regulation in accordance with Article 89 of the said law.

CONSEQUENCES OF CONTRADICTION WITH THE FORM - CASES WHERE CONTRADICTION WITH THE FORM CANNOT BE ASSURED

Contracts that are not made formally are considered invalid. Therefore, the parties cannot demand the fulfillment of their acts. Performances made without knowing the lack of form may be requested back with unjust enrichment or extortion lawsuit.

However, in the decision dated 30.09.1988 and numbered 1987/2-1988/2 of the Grand General Assembly of the Supreme Court of Appeals for Unification of Jurisprudence, it was ruled that construction contracts in return for flats that were not made officially will be accepted as valid in some cases. According to the relevant decision, real estate sales promises that are not made officially are considered valid only if the following conditions are met:

1. The real estate subject to sale should be made subject to the Condominium Law,

2. The buyer has fulfilled his/her obligations,

3. The seller has delivered the independent section,

4. The seller refuses to register.

The General Assembly of the Supreme Court of Appeals made the following evaluations regarding the form in its decision numbered 2013/65 K.:

"Work contracts,as a rule, are not bound to any form. They can be made verbally, but also in ordinary written or official form. Form is not a condition of validity (sahhat), but a condition of proof.

The "construction contract in return for land share", which is a type of work contract, is a type of "mixed contract" with a special feature. Because in this type of contract, the contractor's obligation is to build and deliver the construction, and the land owner's obligation is to transfer the ownership of the land share to the contractor as a consideration. Two contracts are intertwined here. One is the "construction contract", which is not bound by any form; The other is the "contract that creates the obligation to transfer property", which must be made officially, in accordance with the Turkish Civil Code (TMK) No. 4721, Article 634, Code of Obligations (Code) No. 818, Article 213, Title Deed Law, Article 26, and Notary Law, Article 60. For this reason, "construction contracts in return for land share" must be made in the form of 'arrangement' at the notary. Here, form is the condition of validity. According to the mandatory rule, contracts made without complying with the official form are invalid.

However, the Supreme Court of Appeals grants validity to these contracts in cases where the construction contract in return for land share, which is invalid because it does not comply with the form requirement, is actually implemented and it is understood that the parties have fulfilled their obligations to the fullest extent.

The first exception to the form requirement is; "Even if the contract is in ordinary written form, if the contractor has fulfilled his obligation (the obligation to create a building) completely or to an extent that cannot be rejected, the land owner can no longer claim the invalidity of this contract." Because such behavior would be contrary to the rule defined in the 2nd article of the TMK, "The legal order does not protect the obvious abuse of a right".

The second exception is; Because the other part of the mixed contract, that is, the "construction contract", is not subject to the form condition anyway.

The rule of not claiming lack of form in cases where the land share is transferred to the contractor in the title deed, despite the mutual fulfillment of the acts completely or to a significant extent and the contract made without complying with the form condition, takes its basis from the justification of the decision of the Grand General Assembly of the Unification of Supreme Court of Appeals, dated 30.09.1988, numbered 1987/2-1988/2."

DEBITS OF THE LAND OWNER IN CONSTRUCTION CONTRACTS IN EXCHANGE FOR LAND

1-Obligation to deliver the land without defects

In light of our explanations above, it will be necessary to say that the construction contract in return for flat, which is a type of contract that imposes debt on both parties, imposes certain obligations on the land share owner. The most important of these debts is, of course, the debt of delivering the land. The land owner is under the obligation to deliver the land to the contractor without any defects. Since failure to fulfill the delivery obligation will result in default, the contractor cannot be asked to fulfill its debt.

When the land is delivered, there must be no situation that would prevent the contractor from starting construction. If the land is delivered with defects, the contractor will be able to benefit from the regulation in Article 472 of the TBK. According to the relevant article; "While the work is being created, if it turns out that the material provided by the employer or the place he showed for the work to be produced is defective, or if any other situation arises that would jeopardize the production of the work as required or on time, the contractor must immediately notify the employer of this situation; if he does not notify, he will be responsible for the consequences that may arise from this."

2- Land Share Transfer Debt

As we have stated in many places, the land owner's obligation to pay the price constitutes one of the essential elements of the contract. However, the land owner will fulfill his obligation to pay the price by transferring his land share as a consideration. This debt is the basic debt of the land owner. The timing of the transfer of the land share can be freely determined by the will of the parties. However, if there is no such provision in the contract, the due date of the debt will be the date of delivery of the construction.

In each of the contract types mentioned above, the time of performance of the transfer obligation may differ.

CONTRACTOR'S DEBTS IN CONSTRUCTION CONTRACT IN EXCHANGE FOR LAND

1. Construction Debt

In construction contracts in return for land share, the contractor's main obligation is to complete the construction subject to the contract and deliver the independent sections specified in the contract to the land owner. (Construction Contract in Exchange for Land Share, Istanbul, Der Publications, 3rd Edition, 2010, (Land Share) p. 33)

Material Provision Debt: The contractor must provide the necessary tools and materials while constructing the building. This obligation is stated in Article 471/4 of the TBK. It comes from the article. In the relevant article; "Unless there is a custom or agreement to the contrary, the contractor must provide the tools and equipment to be used to create the work." His statements are included. As regulated in the article, it is possible to eliminate this rule by agreement.

The contractor must determine the materials to be used in accordance with the dimensions expected by the employer.

2. Duty of Care and Loyalty

This obligation arises from Article 471 of the Turkish Code of Obligations. Detailed regulations are included in the relevant article. Accordingly:

The Contractor must perform the duties undertaken with loyalty and care, taking into account the justified interests of the employer.

In determining the contractor's liability arising from the duty of care, his behavior in accordance with the professional and technical rules that a prudent contractor undertaking works in a similar field should demonstrate is taken as basis.

The Contractor is obliged to carry out the work to be created directly or to have it done under his own management. However, if the personal characteristics of the contractor are not important in the creation of the work, he may have the work done by someone else.

Unless there is a custom or agreement to the contrary, the contractor must provide the tools and equipment to be used to create the work.

The following statements were included in a Supreme Court decision on the subject:

Compliance with the provisions of the contract is required by the rule of "fidelity", which is the basic principle in law. In the work contract, the contractor is obliged to carry out the work undertaken with loyalty and care in accordance with the trust placed in him, and to avoid any behavior that would harm the owner. The employer is also obliged to perform the duties assigned to him by his contract in a timely manner in order to complete the work. The parties must fulfill their obligations within objective rules of good faith.

3. Debt for Preparing Projects in Compliance with the Zoning Legislation and the Contract and Obtaining Licenses

Article 21 of the Zoning Law states, "For all buildings within the scope of this Law, it is mandatory to obtain a building license from municipalities or governorships (or sworn free architecture and engineering offices), except for the exception specified in Article 26." The arrangement as follows is included.

In Article 22 of the same law, the persons authorized to obtain a building permit are specified. In the law, these people are listed as building owners or their legal representatives. As can be understood from the law, the task of obtaining a building permit is essentially the responsibility of the land owner.

In terms of construction contracts in return for land share, it is seen that the authority to obtain a building permit is generally transferred to the contractor. There is no legal restriction regarding the transfer of this duty. In addition, it can be seen that transferring the task of obtaining a building permit to the contractor provides convenience in practice.

For this reason, the contractor must make the necessary applications and obtain permits. Following the application, the necessary examinations are carried out by the competent authorities and the deficiencies, if any, are requested to be completed. It is the contractor's responsibility to complete these deficiencies within the legal periods.

4.Contractor's Construction Delivery Debt

In construction contracts in return for land share, the contractor's main duty is to complete the construction and deliver it to the land owner. As we have stated in many places, the Supreme Court accepts the construction contract in return for flat as a type of work contract. For this reason, it would be correct to evaluate the provisions regarding the work contract here as well.

There is no express delivery obligation in the law regarding the work contract. However, regulations regarding the delivery obligation are included in various provisions. (TBK 473, 474,478,479 etc.)

The contractor must complete the work and deliver it to the owner. The burden of proving the fact of delivery belongs to the contractor. The Contractor is given the opportunity to prove this fact with all kinds of evidence. By delivery, it is meant that the land owner takes over the work in a position to actually use it. Delivery time and method are determined according to the contract provisions. If such a provision is not included in the contract, general provisions will come into play this time. Additional explanations will be made under the default heading in terms of delay in delivery.

The following statements were included in the decision numbered 2017/1199 K. of the 15th HD of the Supreme Court:

Generally, in work contracts, just because the contractor creates the work does not mean that he fulfills his primary performance obligation. The contractor is under the obligation to deliver the work he has created in accordance with the contract. The Contractor will create the work undertaken and deliver this work to the employer in accordance with the procedure, law and contract provisions. Since the obligation to deliver the work lies with the contractor, the burden of proving that the work has been delivered falls on the contractor. In other words, the contractor must prove that he delivered the work to the employer in accordance with the contract. In order to be entitled to the compensation, the plaintiff contractor is obliged to prove that he delivered the work to the employer within the deadline at the employer's workplace.

Delivery in work contracts is defined as the contractor's placing the completed work under the actual control of the employer with the intention of fulfilling the contract. The burden of proving delivery is on the plaintiff contractor, but how this delivery should be proven constitutes the solution point of the case. In proving whether the work has been delivered or not, the parties can stipulate in the contract regarding the evidence with which the proof will be made and conclude an evidentiary contract regarding delivery. If there is no such evidence contract, the contractor can prove the fact that he delivered the work he created, with all kinds of evidence, including witnesses, as a rule, since delivery is not a legal transaction, but a legal act.

5.Contractor's Obligation to Warranty Against Defects

We stated above that the contractor will be relieved of his obligations and entitled to the price upon delivery of the work to the owner. The land owner will need to inspect and accept the building when delivery is made. The performance obligation ends only when the land owner accepts the work.

If the work created does not meet the conditions agreed in the contract, it is considered defective. Likewise, not having the features that the land owner expects from the work is considered defective performance.

If a technical specification is added to the contract with the contractor, the manufactured work must have these qualifications.

The 23rd Civil Chamber of the Supreme Court made the following evaluations about the defect in its decision No. 2018/4016 K.:

"Incomplete work is the work that is not fully done even though it is agreed to be done according to the contract and its annexes. Defective work is the work that does not have the qualifications agreed upon in the work contract or some indispensable qualities. In other words, a defect is the absence of the qualities that should normally be present in a good or work according to the provisions of the contract or the law, or the presence of defects that should not be present. However, the contractor's liability continues for the defects that he deliberately conceals and for the defects that cannot be noticed during a proper review. If, If the defect is not detected by a proper inspection at the time of delivery of the work, it is assumed that there is a hidden defect. When obvious defects are detected as a result of the inspection carried out personally or by an expert, as soon as possible after the delivery of the work, the hidden defects must be reported to the contractor without delay, as soon as the defect is notified within the specified period. "

In this heading, the contractor's general debts are listed. Below, we will include evaluations under separate headings about the contractor's liability arising from defects and the conditions of this liability.

CONTRACTOR'S LIABILITY ARISING FROM DEFECT IN CONSTRUCTION CONTRACTS IN EXCHANGE FOR LAND

The following statements regarding defects in work contracts are included in the decision numbered 2017/3924 K. of the 15th Civil Chamber of the Supreme Court of Appeals:

"Provisions regarding defects in the work contract are regulated in Articles 474-478 of the TBK No. 6098. A defect refers to the lack of the necessary qualifications that must be present in the work or the qualifications agreed upon in the contract. According to Article 474/I of the TBK, the employer must inspect the work within a period that is not considered late according to the ordinary course of work after the delivery of the work and report the defects, if any, to the contractor. Rights of the employer in case of defects It is regulated in Article 475 of the TBK No. 6098."

After evaluating the provisions mentioned in the decision, it will first be necessary to make explanations regarding the conditions of liability.

i-Conditions of Liability

In order for the contractor to be held responsible for the defect and for the employer to exercise his rights specified in the law, certain conditions must exist. These conditions can be listed as follows:

1-The work must be delivered.

2-The delivered work must be defective.

3-The defect must not be caused by the owner of the business.

4-The employer must have fulfilled his inspection and notification obligations.

5-The work must not be accepted explicitly or implicitly.

As we stated above, in order to be considered defective, the work must be completed and delivered. Here, it is necessary to distinguish between incomplete work and defective work. There must be a defect in the delivered work. There are two types of defects: open and hidden defects. Obvious defects are defects that can be detected through proper inspection. The regulation regarding obvious defects is included in Article 474 of the UK Code. Hidden defects refer to defects that cannot be seen with proper control. Hidden defects are regulated in Article 477 of the UK Code.

The fault must not be caused by the employer. Because Article 476 of the Turkish Code of Obligations; "If the defect of the work arises from the instruction given by the owner, despite the contractor's express warning, or if it can be attributed to the owner for any reason, the owner cannot exercise his rights arising from the defect of the work." It is arranged as follows. Here, it should not be forgotten that the employer works independently and must do the job in accordance with technical and scientific arts. Namely; Even if the owner has given misinformation, the contractor must carry out the work in accordance with the rules of science and art. If the owner insists that the work is not done properly, the contractor will only be relieved of liability. For this, the contractor must have fulfilled its notification obligation.

In order for the contractor to be held responsible for the defect, the employer must not accept the work in its defective state. According to Article 477 of the Turkish Code of Obligations:

"After the express or implied acceptance of the work, the contractor is relieved of all liability; however, his liability continues for defects that are deliberately hidden by him and cannot be noticed during proper review.

If the owner neglects to review and notify, he/she is deemed to have accepted the work.

If the defect in the work is revealed later, the owner must notify the contractor of the situation without delay; If he does not declare it, he is deemed to have accepted the work."

ii-Inspection and Notification Obligation of the Land Owner

TBK 474: ''After the delivery of the work, the employer is obliged to review the work as soon as possible in the ordinary course of business and, if there are defects, to notify the contractor within a reasonable period of time.''

What is meant by the article is obvious defects. Defects that can be detected through proper inspection are considered obvious defects. If there is a clear defect in the work, the owner must notify the contractor within a reasonable time. If the notification obligation is not exercised within a reasonable time, the owner will be deemed to have accepted the work.

TBK 477: "If the defect in the work is revealed later, the owner must notify the contractor of the situation without delay; if he does not, he is deemed to have accepted the work."

This article regulates hidden defects. Defects that cannot be noticed during a proper inspection are defined as hidden defects. If a hidden defect is discovered, the employer must notify the contractor without delay. Otherwise, he will be deemed to have accepted the job.

It does not matter how the warning is made. However, for ease of proof, a written warning is recommended.

iii-Land Share Owner's Rights Arising from Defects

1- Cancellation of the contract if the work is defective to the extent that the employer cannot use it or cannot be forced to accept it due to equity, or if it is equally contrary to the provisions of the contract.

2- Do not keep the work and ask for a discount in proportion to the defect.

3- Requesting the work to be repaired free of charge, with all expenses borne by the contractor, unless it requires excessive expense. The employer reserves the right to request compensation in accordance with general provisions. If the work was built on the owner's real estate and its removal would cause excessive damage, the owner cannot exercise his right to withdraw from the contract.

In cases where the conditions are met, the business owner will be able to use one of the above optional rights. The creditor exercises its optional rights through litigation. The selected right cannot be changed again. However, the Supreme Court has an exceptional decision on this issue. In the relevant decision, it was ruled that the court could make a decision other than what was requested, and "the rule that there is little in many is cited as the reason." This notice is as follows:

"In this case, the court decided to partially accept the case based on the 4,000.00 TL calculated as the repair fee in the expert report, since the defect in the work was not at a level that could not be accepted and it was possible to repair it and the request was for the termination of the contract and the refund of the price. However, in accordance with the principle that there is less in many, since the entire cost of the work was paid, this issue was overlooked and decided to accept the case and return the wind turbine in the owner's possession to the contractor, although it was decided to accept the case." "It was not right not to give it, it was deemed appropriate to break it." Y15 HD. 2015/6602 K.

iv-Prescription

The employer can exercise his rights arising from the defect within the 5-year statute of limitations.

If the contractor is seriously at fault, the employer's rights become statute-barred after twenty years.

CONTRACTOR'S LATE COMPLETION OF CONSTRUCTION - CONTRACTOR'S DEFAULT

The contractor's failure to complete the work on time causes default, which is one of the cases of breach of obligation. In our review titled Debtor's default, we included extensive analyzes in terms of the conditions and consequences of default. You can find detailed information on the subject by reviewing our relevant article.

In this heading, we feel the need to make a statement regarding the use of the right of revocation due to default. According to the Supreme Court, the right to withdraw from work contracts can only be exercised through the court. 2016/1340 of the 23rd Civil Chamber of the Supreme Court of Appeals. As stated in decision no., the parties must apply to the court in order to withdraw from the contract. The relevant part of the decision is as follows:

"On the other hand, construction contracts in return for land share are mixed contracts consisting of work and promise of sale contracts, and since they also include a promise of sale (transfer of land share), it is not possible to terminate them with a unilateral declaration of intent. In the determined jurisprudence of our department, it is accepted that such contracts will be terminated by the termination decision of the court in case the wills of the parties are united or if there are justified reasons. Therefore, if the party who wants to renege on these contracts, if the other party does not accept to renege and objects, the judge will It needs a decision, that is, it can withdraw from the contract with the decision to terminate the contract at the end of the "termination of the contract" lawsuit filed in court. The court first discusses whether the person requesting termination is right or not; otherwise, it rejects the case and keeps the contract in force. In other words, termination of construction contracts in exchange for land share transfer is only possible with a court decision.

TERMINATION OF CONSTRUCTION CONTRACT IN EXCHANGE FOR LAND AND ABANDONMENT

According to Article 475 of the Turkish Code of Obligations; If the work is defective to the extent that the employer cannot use it or cannot be forced to accept it due to equity, or if it is equally contrary to the provisions of the contract, the employer may withdraw from the contract. But it should not be forgotten that; If the work was built on the owner's real estate and its dismantling and removal would cause excessive damage, the owner cannot exercise his right to withdraw from the contract.

According to the decision of the 15th Civil Chamber of the Supreme Court of Appeals No. 2018/1188; "The work to be done by the court is to evaluate whether the work is defective in a way that it cannot be accepted in accordance with Article 475/1 of the Turkish Code of Obligations, by obtaining an additional report from the expert committee that gave the original report. If the dismantling and removal of the work will cause excessive damage, it should be taken into consideration that it cannot exercise the right of return, and in this case, an investigation should be made regarding a reduction in the price in proportion to the defect in accordance with Article 475/2 of the TBK. According to the well-established jurisprudence of both our Chamber and the Supreme Court, if the price is reduced. "Relative method" should be applied. The proportional method is to determine the price to be deducted by dividing the price obtained by multiplying the agreed fee with the defective value of the work. If there are objections to the report to be received in this way, the cost of the work and the price paid should be determined and decided accordingly.

If the contractor does not start work on time or cannot complete the work he started on time, he will be deemed to be in default with the existence of other conditions. Likewise, if the land owner does not fulfill his obligations, he will be deemed to be in default.

One of the consequences of default is reneging on the contract. As a matter of fact, Article 125 of the TBK; "The creditor may also request compensation for the damage arising from non-performance of the debt or renege on the contract by immediately notifying that he/she has renounced the performance of the debt and the right to demand delay compensation." It is arranged as follows.

Again, in Article 484 of the Turkish Code of Obligations, the employer is granted the right of termination. According to the relevant article; The employer may terminate the contract, provided that he pays for the part done before the completion of the work and compensates all the damages of the contractor. A Supreme Court decision regarding the details of termination without compensation is as follows:

"The provision of Article 369 of the Code of Obligations No. 818 (Article 484 of the Code of Obligations No. 6098) grants the owner of the work-work the authority to break the contract by paying all of the damage to the contractor. In order for the owner of the work-work to use this authority, before the work is completed, the owner of the work must pay for the part done and compensate the contractor for all the damage in the most comprehensive way. "baligan mabelag" compensation included in the provision of the said Law. The term is the most comprehensive form of compensation, meaning spacious, ample. The method used in calculating this compensation, both in doctrine and in the practice of the Supreme Court, is the "collection method". In this method, the contractor's loss is determined by adding the net profit that he could have made if the work had been completed, to all expenses up to the time of termination, in order to calculate the contractor's profit loss and damage, in accordance with the "addition method". Because, termination based on the provision of the said Law is a "without reason" termination. If the employer has given a reason in the termination notification, Article 369 of Law No. 818 is not applied, in this case, it is investigated whether the reason for termination is justified; if the reason is unjust, the contractor may request positive damages from the faulty employer. Y15 HD. 2014/4650 K.

In addition, the following regulations are included in Article 473 of the TBK:

"If it is clearly understood that the contractor will not be able to complete the work at the agreed time, according to all estimates, due to the contractor not starting the work on time or delaying the work contrary to the provisions of the contract, or a delay caused by a reason that cannot be attributed to the owner, the owner may withdraw from the contract without having to wait for the day determined for delivery.

During the creation, if it is clearly seen that the work will be produced defective or in violation of the contract due to the contractor's fault, the employer shall instruct the contractor to rectify the defect or contradiction within a reasonable period of time to prevent this; Otherwise, he may warn that the repair or continuation of the work will be given to a third party at his own expense and damage."

CONSTRUCTION CONTRACT IN EXCHANGE FOR LAND AND PROMISE TO SALE PROPERTY

The construction contract in exchange for flats is a mixed contract that also includes the promise of selling real estate. The transfer of the land share to the contractor can be transferred by contract, before the work starts, or it can be decided that it will be transferred at the end of the work. In this case, the contractor may request the land owner to transfer the agreed land share to his name after delivering the construction. The Contractor may exercise this right by filing a lawsuit for title deed cancellation and registration. The lawsuit is filed against the land owner. The competent court is the civil court of first instance.

RIGHTS OF THE THIRD PARTY IN THE CONSTRUCTION CONTRACT IN EXCHANGE FOR LAND

In this case, which is called purchasing from the land, the contractor can sell the independent sections promised to him to third parties by contract. In this case, a real estate sales contract is made between the contractor and the third party. This contract must be made officially at the land registry office.

Apart from this, a real estate sales promise contract can also be made between the contractor and third parties. The contractor may transfer the land share registered in his name to someone else. This contract, which will be made officially, can be annotated in the title deed. If the contractor refrains from performing, a third party may file a lawsuit for the transfer of his share. Our explanations regarding the real estate sales promise can be reviewed in our article titled "Real Estate Sale Promise Agreement".

If the contractor promises his share to more than one person, the previous promise agreement is considered valid. In a sample Supreme Court decision, it is stated that "In practice, it is a common situation that the contractor assigns the same independent section to one or more third parties on different dates, either through the assignment of receivables or by making a promise to sell contract, and one or more assignees claim rights on the same independent part. Similarly, it is also possible for the owner to promise to sell a real estate that has been subject to a promise to sell contract to another person. In such cases, there is a competition of personal rights. As a rule, unless it is invalid or the contract is terminated." "As emphasized above, it is not important whether the sale transaction is made by the contractor to one or more of the third parties officially (with a notarized sales promise contract) or to the others with an ordinary written contract. The important issue is the date of the assignment to the third parties who claim personal rights." It is stated as follows.

SALE OF INDEPENDENT SECTION WITH ORDINARY WRITTEN CONTRACT

As we mentioned above, the real estate sales promise contract must be made formally. Otherwise, the contract will be deemed invalid. However, the Supreme Court has stated that in some cases, an ordinary written contract will be considered valid. These conditions are:

1. Conducting the real estate subject to sale in accordance with the Condominium Ownership Law,

2. Transfer of the sold independent section to the contractor,

3. Appropriate declarations of will of the Contractor and the third party,

4. 3. The person must have paid the sales price in full,

5. The contractor has completed the independent section and handed it over to the third party.

In case the above conditions are met, the third party may request that the independent section be registered in his/her name.

CONTRACTOR'S SELLING HIS PERSONAL RIGHTS AS AN INDEPENDENT SECTION

Here, the contractor's assignment of independent sections that have not yet been transferred to him in accordance with the contract will be examined.

As we mentioned above, it can be decided in the contract that the transfer of the independent sections that the contractor will own in return for the work will be carried out after the delivery of the work. The contractor may wish to generate income by transferring land shares that have not yet been transferred to him to third parties. This is the most common situation in practice.

Since the contract between the Contractor and the third party will be considered as an assignment of the receivable, it is sufficient that it is made in ordinary writing. In such cases, since the third party takes over the contractor's right, it can assert this right against the land owner. However, it should not be forgotten that asserting the right depends on the contractor fulfilling his responsibilities.

If the contractor does not fulfill his obligations, the third party cannot apply to the employer. However, in such cases, the contractor will be held responsible. The contractor's responsibility is the liability for compensation.

In this case, the third party may request that the title deed be transferred to him/her, as he/she will now be the successor to the rights of the contractor. Otherwise, the third party may file a lawsuit for title deed cancellation and registration.

If the contractor transfers his personal rights to more than one person, the transfer dates are checked. The previous assignment is considered valid. Also, good will is not required.

If the contractor both makes an assignment agreement and transfers his right from the title deed to someone else, the right of the transferee is protected. Because the real right of the transferee is prioritized over the personal right of the assignee.

DEED CANCELLATION AND REGISTRATION CASE OF THOSE WHO BUY FLAT FROM THE CONTRACTOR

In this heading, the parties to the lawsuits to be filed will be determined according to various situations.

• If the independent section that the contractor promises to sell is registered in his name in the title deed, the third party should direct the lawsuit against the contractor.
• If the third party has assigned the contractor's rights and the contractor has performed his duty, this time the lawsuit is filed against the contractor and the land owner.
• If a promise of sale contract has been made but the independent section has been transferred to someone else, then a lawsuit for title deed cancellation and registration cannot be filed. However, if the transferee is malicious, the lawsuit should be directed to him.

The period for filing a lawsuit for title deed cancellation and registration is 10 years.

If the plaintiff is a consumer, the case is filed in consumer courts. However, commercial courts of first instance are responsible for cases filed between merchants.