Real estate investment covers a wide variety of asset types, such as land, residential projects, offices, shopping centres, hotels, logistics warehouses and industrial facilities. For an investor or a project developer, legal risks do not arise only at the moment the title deed is transferred. Different contracts and obligations come into play at every stage, from the acquisition of the property to the development of the project, from its financing to its leasing, and in the management of the investment over the years.

Mersin is a city with intense activity in logistics warehouse investments thanks to its port and free zone, in residential and tourism projects thanks to its long coastline, and in international real estate transactions thanks to demand from foreign investors. On this page I discuss the main legal issues faced by real estate investors, project developers, landowning companies, and owners and operators of commercial real estate. For individual property disputes such as title deeds, tenancy, condominium ownership or partition of co-owned property, please see the real estate lawyer page.

Pre-Investment Legal Review

Real Estate Legal Due Diligence

A legal review carried out before acquiring a property or project for investment purposes allows risks that directly affect the price and the investment decision to be identified in advance. Checking the title deed (tapu) record alone is not enough; the legal, administrative and contractual status of the property should be assessed as a whole.

The review looks in particular at the following:

The chain of ownership, and any mortgages, attachments (haciz), annotations (şerh) and declarations (beyan) in the title deed record
Easements and rights of use held by third parties
Zoning status, plan amendments, the building permit (ruhsat) and the occupancy permit (yapı kullanma izni)
Risks of expropriation, allocation to public use or inclusion in a protected area
Existing lease agreements and the sustainability of rental income
Construction, contractor and project agreements
Financing and security encumbrances
Tax liabilities and pending lawsuits

Acquisition Through Company Shares

Large real estate investments are sometimes made not by buying the property directly, but by acquiring the shares of the company that owns it. In this structure, the investor takes over not only the property but also the company’s past debts, tax risks, employee receivables and contractual obligations. For this reason, the company’s legal and financial position must be reviewed separately, and the representations and warranties and the indemnity provisions in the share transfer agreement must be drafted carefully.

Project Development

Construction Agreements in Exchange for Land Shares

The construction agreement in exchange for land shares (arsa payı karşılığı inşaat sözleşmesi) is the most common way of setting up residential projects in Mersin. The landowner undertakes to transfer certain shares of the property to the contractor, and in return the contractor undertakes to build the project. These agreements must be executed before a notary in official form (düzenleme şeklinde); otherwise their validity is called into question.

The following in particular should be clearly regulated between the developer and the landowner:

The allocation of the independent units and the basis on which they will be allocated
Technical specifications, material standards and project changes
Who will obtain the building permit, the occupancy permit (iskân) and other permits, and within what period
Linking title deed transfers to the progress of construction
Delivery period, delay penalties and grounds for extension of time
The contractor’s authority to sell and the status of sales made to third parties
Termination of the agreement and winding up if the project is left unfinished

Security obtained from the contractor and linking title deed transfers to project stages are the main tools that protect the landowner against the risk of the project being left unfinished. For contractor and subcontractor relationships during the construction phase, please see the construction and infrastructure sector page.

Project Development and Joint Investment Agreements

In large projects, the landowner, investor, developer, contractor, architect, financial institution and sales company come together within the same project under different agreements. Setting up the legal structure correctly from the outset ensures that project costs, revenue sharing, management powers and responsibilities are clearly defined.

In projects involving more than one investor, capital contributions, management and decision-making procedures, revenue distribution, additional capital needs, share transfers and exit mechanisms should be regulated by agreement. Establishing a special purpose company for the project can separate the risk from other activities and make financing easier.

Zoning, Permits and Planning Processes

The investment value of a property depends on the permitted use and building conditions in the zoning plan. Plan amendments, parcelling and zoning implementation, and the building permit and occupancy permit processes directly affect the project’s timetable and cost. The time limits for bringing an action against the administration’s planning and permit decisions are short; for this reason, administrative decisions affecting the project should be monitored closely. For litigation against administrative acts, please see the administrative law page.

Off-Plan Sales and Pre-Paid Housing

Sales to consumers from projects that have not yet been completed are subject to the rules on pre-paid housing sales (ön ödemeli konut satışı) in Consumer Protection Law No. 6502. For the developer, pre-contractual information, the execution of the promise to sell agreement (satış vaadi sözleşmesi) before a notary, the consumer’s fourteen-day right of withdrawal and the security obligations laid down in the legislation must be fulfilled meticulously. Failure to comply with these rules can put the validity of the agreement and the sales revenue at risk.

Commercial Real Estate and Leasing

Shopping Centre, Office, Hotel and Logistics Warehouse Leases

For income-producing commercial real estate, the lease agreement is the key document that determines the value of the investment. In long-term commercial leases, the rent increase method, currency and inflation risk, turnover rent, service charges and advertising contributions, who will own fit-out and decoration investments, and early exit and assignment provisions must be drafted carefully. In Mersin, leases of logistics warehouses around the port and the free zone, and leases of hotels and tourism facilities in coastal areas, are prominent examples of these agreements.

Long-Term Operating and Management Agreements

In properties such as hotels, shopping centres, student residences or healthcare facilities, ownership and operation are often separated. In long-term lease, operating or management agreements between the owner and the operator, the key legal issues are revenue sharing, performance criteria, refurbishment investments, maintenance costs and the condition in which the property will be handed back at the end of the agreement. For matters relating to tourism facilities, please see the tourism sector page.

Financing and Security

Mortgages and Real Estate Security

Real estate is the most frequently used form of security in bank loans and project finance. Which debts the mortgage covers, its rank, whether it is set up as a maximum-amount mortgage (üst sınır ipoteği), the order of priority between several creditors and the conditions for releasing the mortgage also affect the rights of buyers of independent units, particularly in project sales.

Project Finance

In large-scale projects, lenders may require additional security alongside a mortgage, such as a pledge over company shares, an assignment of rental income and an account pledge. Setting up this security in line with the project agreements, the shareholding structure and the sales plan prevents conflicting provisions that could tie the developer’s hands later on. For matters relating to financing agreements, please see the banking and finance sector page.

Foreign Investors

The acquisition of real estate in Türkiye by foreign individuals and legal entities is subject to restrictions and permit procedures depending on the region in which the property is located, its nature and the legal status of the buyer. Additional permission is required for properties in military restricted zones and security zones. Acquisitions made through companies with foreign capital are subject to different rules. Real estate investments above a certain amount may also form the basis of a citizenship application; in that case, conditions such as how the purchase price is paid and the undertaking not to sell the property become important. In transactions by foreign investors, powers of attorney, sworn translations, money transfers and tax matters should also be planned from the outset. For citizenship procedures, please see the Turkish citizenship page.

Portfolio Management and Digitalisation

Legal Management of Real Estate Portfolios

For companies and investors that own several properties, legal follow-up is not limited to new investments. Lease terms and rent review dates, security, insurance, the validity of permits and licences, changes in title deed records and pending disputes should be monitored regularly. This monitoring prevents missed deadlines that lead to loss of income, and unexpected liabilities.

PropTech and Digital Processes

Online sales and rental platforms, digital contracts, remote valuation and smart building systems are becoming widespread in the real estate sector. These applications bring new legal issues with them, such as personal data protection, electronic approval processes, platform liability and cybersecurity.

Resolving Real Estate Investment Disputes

Investment and project disputes are high-value, technical and lengthy cases. For commercial monetary claims, applying to a mediator before filing a lawsuit is mandatory; in large projects, the parties may prefer to have disputes resolved by arbitrators with technical knowledge of the field through an arbitration clause in the agreement. Keeping contracts, formal notices, progress payment (hakediş) and handover reports, technical reports and correspondence in good order is the most important factor in determining a party’s position when a dispute arises.

Individual Property Disputes

For a property problem you face as a homeowner, tenant, unit owner in a condominium or heir, the following pages will be more suitable:

Scope of Legal Work in Real Estate Investment

In real estate investment, legal support begins with the review carried out before the investment decision is made, continues with the structuring of the project and the drafting of the agreements, and carries on with the management of the portfolio once the property starts generating income. Risks often arise at the signing stage, through a contract provision that has not been drafted correctly.

As Attorney Ezgi Çalışkan, I support real estate investors, project developers, landowning companies and owners of commercial real estate in legal due diligence, construction agreements in exchange for land shares and project development agreements, commercial leasing and operating agreements, financing and security structures, and transactions by foreign investors. Because every investment has a different purpose and risk profile, I aim to build the legal structure around the real needs of the project.

Real Estate Investment and Development