Land Development

What we do in this area

In land development files the legal work is the work done before a dispute arises: pre-acquisition review of the property, reading the zoning status, resolving the share structure and writing the chosen development model correctly into the contract. In this area advisory work is carried out rather than litigation, and the work falls under the following headings:

• Pre-acquisition legal review (due diligence) and written report
• Analysis of shared title and land share structures
• Review of zoning status, plan notes and restrictions
• Legal follow-up of subdivision, amalgamation, road cession and land readjustment under Article 18 of the Zoning Law No. 3194
• Contract structuring for construction in return for land share and revenue sharing models

Before paying a deposit: the acquisition review

Land described as "zoned" in a sale negotiation often means something different on the plan. The review starts with the annotations, attachments and mortgages in the title register entry; it continues with the zoning status certificate, the plan notes, the cadastral sheet and any plan amendments on public display. The minimum questions examined are these: what use is the parcel reserved for, what are the development conditions, is there a part reserved for public use, has a readjustment share (DOP) deduction been made or is one to come, is the parcel of a size suitable for development.

The result of the review is set out in a written report: the legal encumbrances on the property, what it really means on the plan, the risks affecting the purchase price and the recommended contract structure. Paying the deposit before this review is the most common irreversible step in land files.

Shared title and land share structures

Land investment mostly runs through shared ownership, and as the number of shares grows both sale and development lock up. Before the acquisition it is investigated whether there is a written or de facto division between the co-owners; the possible pre-emption right on a sale to a third party is assessed; a transfer to an existing co-owner is not treated as every third-party sale. In projects where the shares are to be gathered in one hand, the sequence of transfers, the payment arrangement and the option of dissolution of co-ownership in case a co-owner refuses to agree are planned together.

From farmland to zoning parcel

A property classified as farmland does not turn into a buildable plot by itself even if it falls within a zoning plan; a series of administrative procedures comes in between:

Subdivision and amalgamation procedures are concluded by a decision of the municipal executive committee under Articles 15 and 16 of the Zoning Law No. 3194 and completed by registration at the land registry. In an Article 18 readjustment, the administration deducts a readjustment share (düzenleme ortaklık payı, DOP) from the parcels entering the readjustment for common use areas such as roads, parks and schools; this share may not exceed forty-five percent of the parcel's surface area before readjustment, and parts previously ceded without compensation are taken into account in the calculation. Objections to the calculation of the deduction, the fairness of the distribution and the location assigned to the parcel are open to administrative court action; we explained this side on the zoning law page.

Writing the development model into the contract

Two models stand out in practice: construction in return for land share, in which the landowner receives independent units from the project in return for transferring land share, and revenue sharing, in which the sale proceeds are shared at the ratio set in the contract. The choice is a matter of risk allocation: in construction in return for land share the delivery and defect risk comes to the fore, in revenue sharing the sale price and sales pace risk.

The decisive headings in contract structuring are these: the timing of the share transfer (gradual transfer tied to the level of construction instead of transfer up front), securities, allocation of the risk that the permit cannot be obtained, the delivery date and the delay sanction, the clarity of the allocation table. A contract creating an obligation to transfer land share must be made in official form; a contract in ordinary written form is open to an invalidity dispute. We explained delivery, defect and delay disputes arising from the contract on a separate page: construction in return for land share.

The page where we describe the process in detail: How we work.