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OBTAINING OCCUPANCY CERTIFICATE IN TURKEY
Hilal KÖMÜRLÜ
Istanbul
EXECUTIVE SUMMARY
It is frequently seen in Turkey that, obtaining occupancy certificate is not taken into consideration for most of the buildings existing in Turkey. A comprehensive crowd from tenants to property owners, from contractors to some other technical persons can meet a great many problems, even administrative and criminal sanctions, arising from this frequent negligence. This negligence also causes some problems in the establishment of condominium. In this context, persons planning to buy or rent property should consider the legal consequences of the lack of occupancy certificate on the property.
This manual arose from a realization the need to know more, regarding occupancy certificate with its general aspect for those who are considering to buy or rent property and those who are required to obtain occupancy certificate for their properties.
The aim is to provide information on significant topics such as;
· The competent authority in regards of occupancy certificate
· The material requirements for the certificate
· The process to be followed
· The financial side of the transaction
· Statistical data on occupancy certificate
· The legal consequences of not to obtain occupancy certificate
· The recent precautions
To make the seriousness of this negligence known and to enlighten the readers regarding the process to be followed for obtaining occupancy certificate in this context, the said focused statistical and legal information is tried to be provided.
This manual written by local attorney Ms. Hilal Kömürlü in a thoroughly readable style dealing in practical way and written as a general guide only. This report should not be given or copied, in whole or in part to any third parties.
It should not be relied upon as a substitute for legal advice. Specific professional advice should always be taken in respect of any individual matter, problem or agreement.
CONTENTS
EXECUTIVE SUMMARY_ 1
CONTENTS_ 2
1.Introduction_ 3
2.Material Requirements3
3.Process4
4.Other Documents to be Submitted to the Director of Occupancy Certificate_ 5
5.Financial Side of Transaction_ 5
6.Statistical Data on Occupancy Certificate_ 6
6.1. Occupancy Certificate, January-September Total6
6.2. Construction Certificate and Occupancy Certificate_ 6
6.3. Percentage Differences of surface area of usage purposes in the first 9 months of 2005 as compared with the first 9 months of 2004. (Construction Certificate-CC and Occupancy Certificate-OC)7
6.4. Residence and Non-Residence Areas According to Purpose of Usage in the First 9 months Total of 2005_ 8
6.5. Usage Purpose in Accordance with Occupancy Certificates and Percentage Differences as compared with the Previous Year, the First 9 Months of 2003-2005 Total10
7.Consequences of Not Obtaining Occupancy Certificate_ 11
8.Conclusion_ 12
Appendix -1 A Sample Petition Regarding Demand of Occupancy Certificate14
1. Introduction
Occupancy Certificate (OC) is an official document of great significance, which confirms that the construction has been completed in compliance with the current legislation, relevant project, Construction Certificate and supplements thereof. Content of Construction Licence, completion date of construction, content of title deed, address of the property, the usage purpose of each independent unit together with the numbers (according to the ranking, not suite number) land shares, surface area and owner of each unit are entered into this document[1].
In order to settle down a property of which the construction has been completed in partial or total and to benefit from the municipal services in this timeframe, it is obliged to obtain permission for the whole or the completed part of the property (if it is still under construction)[2] . The competent authority is the relevant office of municipality, which the subject property is within the boundaries of. Dependently, an OC proves that a building completed actually also completed legally. Thereby, an OC legitimates each independent unit and its utilization.
2. Material Requirements
Once having provided the municipality that the overall requirements stated below are implemented, an OC is regulated within 30 days starting from the application date.
· Completion of the property is in compliance with all licences and supplements, physical and sanitary regulations[3]
· Used materials fit the standards of Turkish Standards Institute
· The sewer system constructed in compliance with the licences and supplements thereto, unless the sewer system is completed, cesspool or another temporary system constructed
· Completion of the parking area for the building or plant as per the requirements of the relevant legislation
· Housekeeper’s lodge and shelter for the building or plant as per the requirements of the relevant legislation
Avoidance of municipality to submit occupancy certificate with the reasoning other than the aforementioned, is unlawful. For instance, municipality cannot avoid from submitting OC with the claim that the owner is in the charge of premium debt arising from labour relations to social security organization.
Unless the requirement is approved in accordance with legislation, the obligation of equipping the property according to legislation through carrying out the overall deficiencies is stated and what the deficiencies or mistakes are explained to the applicant. Should the deficiencies be removed; the owner of the property will be able to re-apply through the same process. The applicant has the right of suit of nullity against the refusal decision in administrative courts to provide the annulment of such decision, should s/he is in contemplation of unlawfulness.
3. Process
4. Other Documents to be Submitted to the Director of Occupancy Certificate
· Construction License
· A copy of Title Deed
· Building (Architectural) Project
· Static Project
· Metric scale
· Zoning Status
· Closing minute (obtained from Construction Audit Office)
· Water, canal and electric attached documents
· Under-floor cabling Licence (obtained from Turk Telekom)
· Foundation Licence
· Document certifying the tax liability termination including “free of debt on the property” written thereon (per each independent unit)
· Two 13 *18 cm. recent photos of both front and back view of the subject property
· Heat Isolation Licence
· Soil Licence,
· Address information
· Transaction duty for the constructions over 150 m2
· Licence to use elevator
· Shelter Report
· Reports including whether the construction is in line with the projects and physics and sanitary regulations prepared by head of the projects and physical affairs
5. Financial Side of Transaction
Pursuant to the 80th Article f paragraph of Municipality Income Law numbered 2464, submitting Occupancy certificate is subject to “Occupancy Certificate Duty”. However, the buildings constructed in Organised Industrial Zones, Free Zones and Small Art Sites are exempt from this duty.
The Occupancy Certificate duty various between the minimum amount of 0, 05 NTL and maximum 0,15 YTL (per each square meter) respectively for residential zones and commercial zones. Each municipal council determines a duty tariff based on the criterions such as type of the building, the used construction material in line with the stated lower and upper limits. The duty amount to be paid is calculated by the municipalities.
Any amendment on buildings for which OC is obtained is also subject to obtain a new occupancy certificate. In the case that there is no increase in gross area of independent units and there is no conversion in usage purpose, the certificate is not subject to any tax, duty or charge.
As per the paragraph (a) of 13th Article of the first section headed “Title Deed Transactions” of 4th tariff attached to Duty Law nr 492, the building or plants which are reconstructed over land or field are subject to an amendment duty of ‰ 15 based on property tax value. As per the paragraph (c) of the same Article, any kind of registration amendment other the said in paragraph (a) is subject to amendment duty of o/ooo 5 based on the property tax value. In addition, a fixed registry fee of 68 NTL (as of 2005) is collected for amendment transaction. 6. Statistical Data on Occupancy Certificate
The total area of the constructions for which municipalities have regulated occupancy certificate, showed an increase of 51 % in the first 9 months of 2005 as compared with the first 9 months of 2004.
6.1. Occupancy Certificate, January-September Total
Exchange ratios as compared with the previous year (%)
An increase of 41,7 % in the number of buildings for which occupancy certificate has been regulated, 69,3 % in the value and 37,5 % in the number of suites has been realized in the first 9 months of 2005 as compared with the first 9 months of 2004.
6.2. Construction Certificate and Occupancy Certificate
Source: Statistical Institution of Turkey
YR
YR
It is not legally possible to construct a building without obtaining construction license. The buildings that have been constructed without construction license may be subject to demolishment. Although obtaining certificates is necessary for both commencing construction and settle down (use) respectively, unfortunately common practise in Turkey to use a building without occupancy certificate after completion of the construction as per its construction license.
6.3. Percentage Differences of surface area of usage purposes in the first 9 months of 2005 as compared with the first 9 months of 2004. (Construction License-CL and Occupancy Certificate-OC)
CL
Other buildings
Wholesale and retail trade building
Office (jobsites) buildings
Hotels and such buildings
Single suited, residence-aimed buildings
Buldings total
Industrial buildings and warehouses
Two or more suited residence-aimedbuildings
OC
Source: Statistical Institution of Turkey
6.4. Residence and Non-Residence Areas According to Purpose of Usage in the First 9 months Total of 2005
Residences Usage Area (m²) Usage Area of non-residences (m²)
1
Buildings
111
Single suited, residence-aimed buildings
112
Two or more suited residence-aimed buildings
113
Public residence buildings
121
Hotels and such buildings
122
Office (jobsites) buildings
123
Wholesale and retail trade buildings
124
Traffic and Communication buildings
125
Industrial buildings and warehouses
126
Buildings allocated for public entertainment education services or hospital, care institutions
127
Other buildings out of the residence aimed buildings.
Source: Statistical Institute of Turkey
Usage areas of non-residences (m2) 30,9 %
Usage areas of residences (m2) 61,7 %
Common usage areas ( m2 )
7,4 %
Source: Statistical Institute of Turkey
Usage areas of residences has been calculated as 61, 7 %, usage areas of non-residences has been calculated as 7,4 % and common usage areas (such as stairwell, corridor)has been calculated as 30,9 % of the total usage areas of buildings for which occupancy certificate has been regulated in January-September 2005 total.
6.5. Usage Purpose in Accordance with Occupancy Certificates and Percentage Differences as compared with the Previous Year, the First 9 Months of 2003-2005 Total
A . Number of Buildings B. Square meter ( m² ) C . Value ( million NTL. ) D . Number of Suits
CC Code
Differences as compared with previous year (%)
Purpose of Use
1
Buildings
111
Single suited, residence aimed buildings
112
Two or more suited residence aimed buildings
113
Public residence buildings
121
Buildings such as Hotels
122
Office (jobsites) buildings
123
Wholesale and retail trade buildings
124
Traffic and Communication buildings
125
Industrial buildings and warehouses
126
Buildings allocated for public entertainment education services or hospital, care institutions
127
Other buildings out of the residence aimed buildings.
Source: Statistical Institute of Turkey
The ratio of areas of buildings’ usage purposes in accordance with Occupancy Certificates is demonstrated in the table below. (Please see the above table to see the code numbers on the rates correspond to which building.)
Source: Statistical Institute of Turkey
7. Consequences of Not Obtaining Occupancy Certificate
1. As per the 31st Article of Zoning Law, the ones who will settle down (use) the buildings for which the OC has not been obtained yet, cannot benefit from electric, water, sewer systems and services dealt out by municipalities[4]. In the event of that municipality provides its services; this gives rise to administrative responsibility. In the case of ascertainment of such a fact, a notification is sent by municipality or governorship to the relevant administration to provide the cut the relevant service as soon as possible. Forasmuch as, conclusion a contract between administration and a private person without showing the OC does not give rise to benefit from these services since not complying with overall legal requirements.
It is also regulated by the administrative regulations of such authorities that the buildings for which OC has not obtained yet shall not receive such services.
2. As per the 31st Article of Zoning Law, the date of submission of OC is deemed the completion date of construction. Determination of the completion date is crucial in terms of tax exemption[5].
3. As per the 42nd Article of Zoning Law, a specified amount of fine will be inflicted on both owner of the property and contractor per each used or leased flat or jobsite without OC[6].
4. Once the OC is obtained, it cannot be cancelled with the reasoning the zoning plan on which the construction licence is based, has been annulled. In this context, the owner of the property carries a vested right in this matter.
· As per the 184th Article headed “Giving Rise to Zoning Pollution” of New Turkish Criminal Code, the ones, who allow operating any kind of industrial activity in buildings (wherever they are) for which occupancy certificate has not been obtained yet, shall be punished with imprisonment punishment from 2 years up to 5 years. To have it regulated afterwards has no positive effect towards elimination of a public prosecution, in extinguishment of a currently carried prosecution or in vacation of a convicted punishment. However, this provision is not applied for buildings constructed on a date before 12.10.2004.
8. Conclusion
It is not difficult to say that the process to be followed for obtaining OC in Turkey is rather complicated, difficult and overloaded with bureaucratic procedures as well. However, both owners and contractors are accustomed to ignore the OC in today’s Turkey. The crucial reason of this is the absence of the sanctions of laws from efficiency.
Unfortunately, contrary actions to these rules are common practises in Turkey. For instance;
· Although it is stated under the Regulation Amending The Regulation Of Electric Tariff Dated 3.7.1999 and nr (Official Gazette) 23754, that in order to deal out electric to buildings and plants, there has to be OC for those (as just stated above), it is frequently seen in Turkey that electric is dealing out to even shanty houses.
· The water and sewerage units of municipalities make the connection of water or sewerage system to buildings and plants without seeking the OC requirement.
· As per the 12th Article of Condominium Law nr 634, obtaining Occupancy Certificate is necessary for the conversion of Condominium[7]. However, since establishment of appurtenant easement is legally significant alone to apply the Condominium Law, it is rarely seen to convert the Condominium although the construction is completed. Consequently, this provision, which obliges obtaining of Occupancy Certificate, has no practical significance.
· The statistical data also proves that these provisions are not efficient enough. (Due to fact that more than 50 % of the buildings are lack of OC.)
Thence, various draft laws studies listed below, which is expected to provide obtaining of the OC, continues.
· However, together with the enactment of the Condominium Law Draft as above-mentioned, not to obtain OC shall be subject to a sum of fine indirectly. The Draft Law of Condominium regulates it as a must to convert Condominium within 1 year starting the day obtaining OC and a fine of 2,000 NTL is imposed as a sanction. With this draft, since a sum of fine will be imposed to ones who do not convert the property to Condominium henceforth, the people who are ignoring conversion the condominium will not have such as a chance and accordingly they cannot be in avoidance of obtaining OC, which is an obligatory part of the conversion to condominium transactions.
· In addition, as above-mentioned, in the case of not obtaining OC, three new offences respectively has been created for the first time under the heading named “Giving Rise to Zoning Pollution” of New Turkish Criminal Code. Accordingly, avoidance of obtaining OC will not only cause the person’s to be pronounced with fine but also will cause him to be pronounced with imprisonment punishment.
· On the other hand, together with the Draft Law Related to Housing Finance System expected to be enacted in the summer of 2006, the buildings to be subject to housing credit are provided to become bound by restrictions at every phase until delivery. Consequently, the owners and contractors should henceforth change their mentality an attitude in OC.
Appendix -1 A Sample Petition Regarding Demand of Occupancy Certificate
TO THE MAYOR OF…………………..…MUNICIPALITY
SUBJECT DEMAND : Regarding Occupancy Certificate
EXPLANATIONS : Since the construction, which was commenced in accordance with the construction certificate submitted by your municipal authority dated … /…. /… and nr…….. has been completed, in order to benefit from the said construction as a residence (jobsite, warehouse, production plant etc.), I demand the occupancy certificate to be regulated and submitted to my behalf as per the 30th Article of Zoning Law.
I request for information and further action relevant subject demand. …./…../……..
ADDRESS NAME / SURNAME
SIGNATURE
Appendix: 1. Construction Certificate
[1] In the case that the property is out of the borders of municipality and its contiguous area, the competent authority becomes governorship. Accordingly, the applications must be directed to these authorities.
[2] Occupancy certificate for the partially completed units are submitted if the connected common species are completed and ready to use.
[3] The proof is the construction of the building in line with the effective Development Plan, Elevator Regulations, Fire Conservancy Regulations, Parking Regulations, Shelter Regulations and other related legal provisions.
[4] In the case, that OC obtained for completed units of a property (partial OC), the said services are solely dealt out these units.
[5]Quarter of tax value of residences (if this value is not less than 2.500 NTL) is temporally exempt from property tax for 5 years starting from the completion of the construction. For the application of this exemption, the taxpayer has to notice the circumstances, which are the requirements of the exemption, to the relevant municipality in due time.
[6] Should the relevant municipality make a complaint to the public prosecutor, the court also punishes contractor and other technically responsible people with temporary (1 year up to 5 years) disqualification to exercise the profession.
[7]The title deed of appurtenant easement is a title used temporarily until up the completion of the construction and the property right over each independent unit is seen individually on the deed and provides the Condominium Law to be applied in this completion process.
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Obtaınıng Occupancy Certıfıcate In Turkey
