Build-to-Share Construction Contracts: A Guide for Foreign Landowners

Many foreigners who own land around Antalya would rather develop it than sell it, and the usual route is a "kat karşılığı inşaat sözleşmesi" — a build-to-share, or land-for-flats, construction contract. Under this model the landowner transfers a share of the plot to a contractor, and in return the contractor builds on the land and hands over an agreed number of finished units. Structured well, it is a clever way to produce real estate without putting up cash. Structured badly, an owner who lives abroad can end up trapped in years of litigation, staring at a half-finished site and the land shares they have already signed away.

What Is a Build-to-Share Contract?

A build-to-share (land-share-for-construction) contract is one in which the landowner undertakes to transfer a defined share of the plot to the contractor, and the contractor undertakes in return to erect a building and deliver agreed independent units to the owner. No money changes hands as the price; the consideration is exchanged between the "land share" and the "construction" itself.

For the landowner the appeal is obvious: without paying cash, you convert raw land into completed apartments. The risk is equally clear: you usually transfer the land share before construction begins or at an early stage, yet you receive your own performance — the finished building — much later. That gap in time is the heart of every protective clause in the contract.

Legal Nature and the Formal Requirement

In Turkish law a build-to-share contract is treated as a "mixed" contract that combines more than one contract type. It contains two core elements. The first is the construction-contract (eser sözleşmesi) element defined in Article 470 of the Turkish Code of Obligations (Law No. 6098): "a contract by which the contractor undertakes to produce a work and the client undertakes to pay a price in return." The contractor's obligation to build is governed by these rules. The second element is the landowner's undertaking to transfer the land share, which is in the nature of a promise to sell immovable property (taşınmaz satış vaadi).

Because that second element is in play, the contract is subject to a strict formal requirement. A contract involving the transfer of immovable property cannot be validly formed in simple written form — that is, on a document signed in a project office. Article 60(3) of the Notary Law (as amended on 23 June 2022) expressly empowers notaries to draw up promise-to-sell contracts for immovable property and, at the request of either party, to annotate them on the land registry through the title-deed information system. A build-to-share contract must therefore be executed at a notary in "düzenleme" (drawn-up) form; otherwise, for registered land, the validity condition is not met. The settled practice of the Court of Cassation is likewise that a claim for cancellation and re-registration of title cannot rest on such a contract executed without the official form.

Once notarised, the contract should be annotated on the land register under Article 26 of the Land Registry Law. The annotation strengthens the landowner's personal right and makes the contract enforceable against later purchasers and the contractor's creditors.

Clauses a Foreign Landowner Should Insist On

A standard contractor's draft almost always protects the contractor. The clauses that tip the balance back toward the landowner are:

• Security mortgage (teminat ipoteği). A mortgage in the owner's favour should be registered over the units or land share that will fall to the contractor, held until construction is complete. If the contractor defaults, this security can be realised.
• Staged transfer of title. Do not transfer the whole land share up front. Tie transfers to construction milestones (foundation, structural work, occupancy permit) so shares pass only as the contractor progresses.
• Delay penalty (penalty clause). Set a clear daily or monthly penalty for each month of delay, and write in an unambiguous final delivery date.
• Technical specification and finishes schedule. Fix the materials, brands and quality standards in an annexed schedule; phrases like "as in the brochure" are not binding.
• Termination and reversion clause. Include a clause providing that if construction stalls or falls below a defined completion rate, the contract ends and the transferred shares revert to the owner.

If the Contractor Becomes Insolvent or Abandons the Project

This is the most feared scenario, and the Turkish Code of Obligations offers several exits. If the contractor seriously falls behind or walks away, the landowner can terminate for just cause. Article 484 of the Code allows the client to terminate the contract by paying for the portion already completed; Article 486 provides that the contract ends automatically where the contractor becomes unable to render personal performance.

After termination, the critical step is recovering the transferred land shares. The landowner can bring an action for cancellation and re-registration of title (tapu iptali ve tescili) to take back the shares given to the contractor. In these cases the Court of Cassation generally looks at the construction's completion rate: where the work is largely finished the court may order an equitable adjustment rather than cancellation, whereas a very low completion rate makes an order returning the shares easier to obtain. An "automatic reversion" (ipso facto) clause in the contract, together with an annotation on the title deed, speeds this process up and strengthens the owner's position against the contractor's creditors and bankruptcy estate. Claims arising from a construction contract are, as a rule, subject to a five-year limitation period (Article 147 of the Code), so rights must be exercised in good time.

Practical Guidance for Foreign Landowners in Antalya

Owners living abroad often cannot monitor the site in person. Before signing, research the contractor's past projects, completion record and any litigation left in their wake. Have the contract reviewed by an independent lawyer rather than the contractor's. If you grant a power of attorney, keep it project-specific and narrow; avoid general powers that authorise "everything." Our guides on what to watch for during title-deed transfer and the promise-to-sell contract will also help during this process.

Frequently Asked Questions

Q: Can I sign a build-to-share contract without a notary?

Not where registered land is involved. Because the contract includes a promise to transfer immovable property, it must be executed before a notary in drawn-up form. A simple written text signed at a project office cannot support a claim for cancellation and re-registration of title.

Q: When should I transfer my land share?

Ideally in stages as construction advances, not all at once at the start. If you transfer everything up front and the contractor abandons the project, you will have to sue to recover the shares. Tying transfer to milestones is your strongest practical protection.

Q: Will I lose my apartments if the contractor goes bankrupt?

Your position depends on whether the contract was notarised and annotated on the title deed. With an annotated right and a security mortgage, you stand far stronger against the contractor's other creditors in bankruptcy or enforcement; without them, you fall to the level of an ordinary creditor.

Q: Do I need to be in Turkey to sign?

No. You can grant a power of attorney at a Turkish consulate or before a notary in Turkey. It is important to keep the scope specific to the contract and to authorise someone you trust.

How Mona Hukuk Can Help

At Mona Hukuk we draft build-to-share construction contracts for foreign landowners in Antalya, negotiate protective clauses such as security mortgages and delay penalties, carry out due diligence on the title register, and represent clients in termination and title-cancellation actions when a contractor fails to perform. We work directly with foreign clients through our multilingual team.

Contact us at contact@monahukuk.com or call +90 (242) 606 14 32 to schedule a consultation in Antalya.