Bank-protected progress payments for off‑plan homes use a written pre‑sale housing contract, a bank protocol that keeps buyer funds in a blocked account and releases them by milestones, and a statutory security such as a building completion insurance policy or a bank letter of guarantee. These sit alongside title tools like a notarised promise‑to‑sell that can be annotated at the land registry to protect the buyer’s position before delivery.[1][2][3][4][5]
Legal basis and core documents
Off‑plan sales to consumers in Turkey are governed by the Consumer Protection Law No. 6502 and the Regulation on Prepaid Housing Sales. The Regulation requires a written contract stating the total price, delivery date, and payment plan, and it bars collecting advance payments until a valid building permit (yapı ruhsatı) exists for the project.[1][2] If the developer has established construction servitude (kat irtifakı) based on the approved architectural project, the land share and unit plan appear in the land registry, helping align progress payments with the intended independent section.[3] Buyers often strengthen their position with a notarised promise‑to‑sell real estate contract (gayrimenkul satış vaadi sözleşmesi) and have that personal right annotated (şerh) to the title; Turkish law allows such annotations, which improves enforceability against later acquirers.[4][5]
Bank-managed progress payments: how funds are held and released
The “bank‑protected” feature is documented in a tripartite protocol among the buyer, the developer, and the bank. Turkish contract law allows the parties to agree that payments are deposited in a blocked bank account and released only when defined milestones are met, such as structural completion, façade closure, or delivery readiness.[6] The protocol should cross‑reference the pre‑sale contract’s delivery date and price and set documentary triggers for each release, for example approved project documents, municipal stage approvals, or completion evidence issued within the building inspection system under Law No. 4708.[7] The bank’s role is custodial and procedural: it receives funds, checks the agreed evidence for each stage, and disburses to the developer under the protocol. This setup does not transfer title; title passes later at the land registry on execution of the definitive sale deed once construction reaches the agreed state.[6]
Security instruments and buyer protections
Bank custody of progress payments supplements the statutory security required for prepaid housing sales. Under the Regulation on Prepaid Housing Sales and Ministry of Trade guidance, the seller must provide completion assurance through a building completion insurance policy (bina tamamlama sigortası) or a guarantee such as a bank letter of guarantee (banka teminat mektubu), ensuring completion or a refund if the project cannot be delivered.[1][2] The general terms of completion insurance define covered risks and remedies and may provide funding to finish the project or repayment up to the insured limit, aimed at protecting consumers in long projects.[5] Law No. 6502 and the Regulation also grant consumers specific rights, including a right to withdraw within a defined period and, before delivery, a right to terminate under stated conditions. The bank protocol should reflect these rights so that blocked funds are returned in line with the law when they are exercised.[2][3]
Practical next steps
Before you sign, obtain the building permit number and date from the developer and match them to your project and unit. At the land registry, confirm that construction servitude has been established and that a notarised promise‑to‑sell is annotated for your benefit; this reduces the risk of conflicting sales on the same share.[3][4][5] From the bank, request the full progress‑payment protocol with its milestone schedule, the exact documents that trigger each release, the definition of default, and the return mechanics if you use a statutory right to withdraw or terminate. Then review the completion insurance wording or the bank guarantee that secures your payments, and have a Turkish lawyer assess how these security instruments interact with your pre‑sale contract and the bank protocol. This article provides general information; a licensed lawyer or financial professional should advise on your specific documents.
Related Questions:
– Q# What protections does a notarised preliminary sales contract (gayrimenkul satış vaadi) give an off-plan buyer in Turkey?
– Q# How do completion insurance policies work for prepaid housing sales in Turkey?
– Q# What should be in a payment schedule for an off‑plan apartment under Turkish law?
– Q# How do construction servitude (kat irtifakı) and condominium title (kat mülkiyeti) affect off‑plan purchases?
References:
[1] Republic of Türkiye Ministry of Trade. “Ön Ödemeli Konut Satışları (Prepaid Housing Sales).” https://www.ticaret.gov.tr/tuketici/tuketici-islemleri/konular/on-odemeli-konut-satislari
[2] Official Gazette (Resmi Gazete). “Ön Ödemeli Konut Satışları Hakkında Yönetmelik (Regulation on Prepaid Housing Sales), 27.11.2014, No. 29188.” https://www.resmigazete.gov.tr/eskiler/2014/11/20141127-1.htm
[3] Official Gazette (Resmi Gazete). “Tüketicinin Korunması Hakkında Kanun (Consumer Protection Law) No. 6502.” https://www.mevzuat.gov.tr/mevzuat?MevzuatNo=6502&MevzuatTur=1&MevzuatTertip=5
[4] Official Gazette (Resmi Gazete). “Kat Mülkiyeti Kanunu (Condominium Law) No. 634.” https://www.mevzuat.gov.tr/mevzuat?MevzuatNo=634&MevzuatTur=1&MevzuatTertip=3
[5] Official Gazette (Resmi Gazete). “Tapu Kanunu (Land Registry Law) No. 2644, including Article 26 on annotations of personal rights.” https://www.mevzuat.gov.tr/mevzuat?MevzuatNo=2644&MevzuatTur=1&MevzuatTertip=3
[6] Official Gazette (Resmi Gazete). “Türk Borçlar Kanunu (Turkish Code of Obligations) No. 6098, Article 26 (freedom of contract).” https://www.mevzuat.gov.tr/mevzuat?MevzuatNo=6098&MevzuatTur=1&MevzuatTertip=5
[7] Official Gazette (Resmi Gazete). “Yapı Denetimi Hakkında Kanun (Law on Building Inspection) No. 4708.” https://www.mevzuat.gov.tr/mevzuat?MevzuatNo=4708&MevzuatTur=1&MevzuatTertip=5
Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or investment advice. Property law and tax rules in Turkey change frequently. Consult a licensed Turkish lawyer, accountant, or real estate professional before making any purchasing decision.