Article 25/6 of the Amending Law No. 7153 published in the Official Gazette on dated 10 December 2018 stipulates certain requirements for Building Contractors that would carry out undertake construction projects in parcels and areas subject to urban transformation under Law No. 6306 regarding the Law on Transformation of Areas under Disaster Risk.
Ministry of Treasury and Finance shall be setting out the minimum criteria with respect to the principles of the agreements to be entered into with the building contractors and also conditions to be met in terms of business experience, technical capacity and financial capabilities.
Moreover, before obtaining the building license, building contractors shall provide building indemnity insurance or certain securities which the scope, terms and conditions would later be declared by the Ministry.
Due its limited scope, building indemnity insurance is not very widespread despite it has been also introduced as a prerequisite for pre-paid residence sales according to the Law No. 6502 on the Protection of Consumer long before the introduction of this new law.
We expect that this new law will promote residence projects for land owners under the auspices of statutory securities that the building contractors to provide with.
For more information, please contact Okan Gündüz.
