Rights of foreign real estate investors in Turkey

What should foreign investors in Turkey do when their real estate projects are not delivered on time?

Recently such cases have increased in Turkey. The reason is mostly since at a time when the number of Turkish real estate development companies (including some well-known giants) were expanding excessively and launching a large number of projects that were far above the capabilities of their capital stock; It faced the recent severe economic crisis and the rapid decline in market demand.

Below we will provide some general legal answers to the following questions:

How can investors secure their rights if real estate projects are not delivered on time? And what happens to the already-paid instalments of thousands of dollars?

In the beginning, to avoid any problem as such; Of course, it is important to work with a reliable broker or real estate agency.

On the other hand; Investors or their intermediaries should conduct preliminary market research for the real estate developer whose project is to be invested. This research should revolve around questions such as whether they are currently in a debt crisis, or have failed to deliver their projects in previous cases.

Once the investor has decided to invest in a project with a company; He must be very careful about the conditions stipulated in the contract. In particular; Sanctions clauses should be somewhat protective of the investor.

If the project was not delivered on time; The investor should not hesitate to take immediate action against the real estate development company. Notwithstanding some cases where companies have reasonable excuses for the delay; Many companies are usually unable - or unwilling to complete their projects on time - once they start asking for delays.

So; These companies should be given a feeling that investors are fully aware of their rights, and that they are prepared to appear in court if necessary.

Going to court and filing a lawsuit usually appears to be a complicated and expensive method for investors; Thus they may be tempted to hesitate to claim their rights, and prefer to wait as long as possible.

But; Are these fears completely wrong? honestly no. It may take a long time to obtain results from the courts (mainly because the disputing party usually appeals to the highest and then the Supreme Court), and during the litigation period, there are some expenditures such as attorneys' legal advice fees or court fees.

So; It is better for investors not to waste time taking legal action. The reason for this is - in particular - the fact that if there is more than one case (which means more than one plaintiff) against a company; Whoever wins his case first will have a chance to enforce the court's decisions first.

In other words; Creditors who win their lawsuits against a company are lining up to collect their compensation. In addition; Even if it takes time to reach a successful outcome, the amount of penalty fees and default interest also increases with the increase in the litigation period.

Therefore; Not only will investors' losses be compensated, but additional fines will be paid to them for unnecessary delays. In the end; Going to court appears to be a troublesome way for the investor, but it is usually the only opportunity to effectively secure rights.