Off-Plan Property in Turkey: How to Protect Your Deposit

The Off-Plan Market in Turkey

Off-plan purchases (maketten satis) represent a significant portion of Turkey's property market, particularly in Istanbul, Antalya, and Alanya. Developers offer discounts of 15-30% below projected completion prices to fund construction, making off-plan an attractive entry point for foreign investors.

The risk, of course, is that the building is not yet built. Your money sits with the developer during construction. If the developer fails, your deposit may be lost. Turkish law provides some protections, but understanding their limits is critical.

Legal Framework for Off-Plan Sales

The Consumer Protection Law No. 6502

Off-plan residential sales to individual buyers (as opposed to commercial investors) fall under the Consumer Protection Law No. 6502, which provides specific protections.

Article 40 of Law No. 6502 requires that off-plan residential sales contracts be executed as a notarized promise-to-sell (noter tasdikli on satis sozlesmesi) or registered with the land registry as an annotation. This gives the buyer a priority claim on the specific unit.

The law also mandates that the developer provide a pre-contractual information form (on bilgilendirme formu) at least 14 days before the contract is signed. This form must include the project's building permit details, the expected completion date, the payment schedule, and information about the developer's financial standing.

Kat Irtifaki Registration

Under the Condominium Law No. 634, a developer can establish kat irtifaki (construction servitude) on a project once the building permit is obtained. This creates separate titles for each unit in the land registry, even before construction is complete.

When you buy an off-plan unit with kat irtifaki, the title is transferred to your name in the land registry. This means you have a registered ownership interest, the property appears on your TAPU, and if the developer goes bankrupt, the property is yours, not part of the developer's bankruptcy estate.

This is the strongest form of protection available. Always insist on kat irtifaki registration for off-plan purchases.

Construction Guarantee Accounts

The Regulation on Pre-Sales of Buildings from Projects, which implements Article 40 of Law No. 6502, requires developers selling off-plan to provide one of the following guarantees: a building completion insurance policy (yapi tamamlama sigortasi), a bank guarantee letter (banka teminat mektubu), or a construction guarantee account at a bank where buyer payments are held and released to the developer in stages tied to construction progress.

In practice, enforcement of these guarantee requirements has been inconsistent. Many developers, particularly smaller ones, have found ways to avoid or minimize these obligations. Always verify which guarantee mechanism is in place and whether it actually covers your payment.

Due Diligence Before Buying Off-Plan

Developer Background Check

Check the developer's registration with the Trade Registry (Ticaret Sicili) through the Trade Registry Gazette at https://www.ticaretsicil.gov.tr. This shows the company's incorporation date, capital structure, directors, and any insolvency filings.

Request audited financial statements. Publicly traded developers file with the Capital Markets Board (SPK) and their financials are publicly available. Private developers are not required to share financials, but a reputable developer will provide them to serious buyers.

Check for lawsuits and complaints. The UYAP (National Judiciary Informatics System) does not provide public access, but your lawyer can check for pending litigation against the developer. The Consumer Arbitration Committee (Tuketici Hakem Heyeti) records are also worth checking.

Project Permit Verification

Verify the building permit (yapi ruhsati) directly with the municipality. A building permit is valid for five years under the Zoning Law No. 3194; if construction has not reached roof level within that period, the permit expires.

Check the zoning plan (imar plani) for the area. Developers sometimes build on land with pending zoning changes, which can delay or block the project.

Verify that the environmental impact assessment (CED raporu) has been completed if required for the project's size and location under the Environmental Impact Assessment Regulation.

Payment Structure

Never pay the full purchase price upfront. A reasonable payment schedule ties payments to construction milestones: foundation completion (10-20%), structural frame completion (20-30%), envelope completion (windows, exterior, 15-20%), interior finishing (15-20%), and key handover and iskan (remaining balance).

Payments should go to the developer's designated project account, not to personal accounts or offshore entities. Keep all bank transfer receipts.

What Happens If the Developer Goes Bankrupt

Under the Turkish Execution and Bankruptcy Law No. 2004, if you have kat irtifaki registration, the unit is registered in your name and is not part of the developer's bankruptcy estate. You own it, though you may face complications with completing construction.

If you have only a sales contract without kat irtifaki, you are an unsecured creditor. Your claim ranks below secured creditors (banks with mortgages on the project), tax authorities, and employee claims. Recovery rates for unsecured creditors in Turkish bankruptcies are historically low.

If the developer has provided a building completion insurance or bank guarantee, you can claim against that guarantee. The process involves notifying the insurer or bank and filing a formal claim with supporting documentation.

Practical Protection Steps

Insist on kat irtifaki registration at the time of purchase, not as a future promise. Verify the guarantee mechanism (insurance, bank guarantee, or escrow account) and confirm it actually covers your payments. Tie payment installments to verifiable construction milestones. Include a completion deadline with penalty clauses (gecikme cezasi) in the contract. Include a right of withdrawal (cayma hakki) if construction is delayed beyond a specified period. Have the contract reviewed by an independent Turkish property lawyer before signing.

Under Article 43 of Law No. 6502, the buyer has a 14-day right of withdrawal from the date of signing the contract, during which they can cancel without penalty.

For regularly updated off-plan buying guidance in Turkey, Bektu provides detailed checklists at https://bektu.com.