Construction Contracts, Legal Framework and Dispute Resolution in Turkey

1. Introduction

In Turkey, a construction contract is more than just a simple agreement; it's the most fundamental legal instrument in the construction industry, detailing the rights and obligations of the parties and providing legal protections. These contracts form the legal foundation for all construction activities, from residential projects to large-scale commercial structures and infrastructure investments. Incorrect or incomplete provisions can lead to significant financial losses, loss of rights, and lengthy litigation for the parties. Therefore, construction contracts in Turkey are legal safeguards that protect not only the technical aspects of the project but also the economic interests.

2. What is a Construction Contract?

Pursuant to Article 470 of Law No. 6098 of the Turkish Code of Obligations, a construction contract is a special type of contract for work. The contractor undertakes to create a work, and the client undertakes to pay for it. The "work" in this case could be an apartment building, a business center, an infrastructure facility, or a residential complex.

For example, the most common construction contract between a landowner and a contractor is a flat-in-return construction contract. Under this contract, the contractor undertakes to build the property and transfers ownership of the individual units specified in the contract .

3. Types and Features of Construction Contracts in Turkey

In Turkey, a Construction Contract can be drawn up in different ways depending on the type of project:

• Construction Contract in Return for Flats: The client opens the land for construction, the contractor completes the construction, and in return, the independent units specified in the contract are transferred to the contractor. In such contracts, annotation on the title deed safeguards the rights of the parties.

• Turnkey Construction Contract: The contractor undertakes to complete the project in full, including all technical and legal processes, and deliver it to the client.

• Contract Based on Cost + Profit: Construction costs are covered by the employer; the contractor is also paid the profit rate determined by the contract.

• Subcontractor Agreements: These agreements regulate the main contractor's assignment of specific tasks to specialized subcontractors. The limits of responsibility must be clearly defined in the contract.

  
  

Adding an Annotation to the Title Deed in Construction Contracts in Return for Flats

In land-in-return projects, annotating the title deed protects the parties' rights against third parties. This protects the contractor's contractual rights in the event of a land sale, mortgage, or lien.

4. Basic Elements That Must Be Included in the Construction Contract

Every Construction Contract in Turkey must include the following elements:

• Identity information and representation powers of the parties

• The subject of the project is the title deed information of the land.

• Construction start and finish times, penalty conditions in case of delay

• Payment method and plan (cash, transfer of independent section, etc.)

• The contractor's liability for deficient or defective work

• Dispute resolution methods (mediation, litigation, arbitration)

• Provision for annotation on the title deed

  
  

5. The Most Common Disputes in Construction Contracts in Türkiye

The most common disputes between parties in the construction industry are as follows:

• Failure to deliver the construction within the time specified in the contract,

• Incomplete or defective manufacturing,

• Disagreements regarding the sharing of independent units in projects in return for flats,

• The employer does not pay the fee,

• Liability disputes arising between the contractor and the subcontractor.

  
  

6. Legal Remedies for Resolving Disputes

Ways to resolve disputes arising under a Construction Contract in Turkey :

• Mediation: In Turkish law, it is a condition for litigation in commercial receivables and compensation cases.

• Courts: Depending on the nature of the dispute, Civil Courts of First Instance or Commercial Courts of First Instance may have jurisdiction.

• Arbitration: It is a fast and effective solution method preferred especially by foreign investors.

  
  

7. Construction Contract in Türkiye for Foreign Investors

For foreign investors participating in the construction sector in Türkiye, it is important that contracts are prepared in two languages (Turkish + foreign language), legal restrictions in real estate acquisition are observed, and international solutions such as arbitration/mediation are envisaged.

8. Advantages of Working with a Lawyer

Due to their high economic value and complex nature, construction contracts pose significant risks if prepared without professional legal support. The advantages of working with Bosphorus Law Firm include:

• Complete Contract Preparation: Critical provisions such as delivery time, payment schedule, penalty clauses and title deed annotations are fully regulated in the contracts.

• Preventing Loss of Rights: In contracts drawn up without the support of a lawyer, missing or incorrect provisions may cause irreversible damage to the parties.

• E-Hearing Tracking Throughout Turkey: Our Istanbul-based office can track cases online throughout Turkey through the e-hearing system. This simplifies the process for clients living out of town or abroad.

• Fast and Safe Solution: In case of dispute, legal support ensures that the process is carried out through the correct legal means (court, mediation or arbitration).

9. Conclusion and Legal Evaluation

In conclusion, a construction contract in Turkey is not only a document that puts the parties' intentions in writing, but also a critical legal safeguard that prevents loss of rights. Incomplete or incorrectly drafted contracts can cause parties to grapple with years of litigation.

Therefore, obtaining professional legal support is crucial for every construction project. Bosphorus Law Firm , with its experienced team and e-hearing capabilities, provides clients with reliable advice not only in Istanbul but throughout Turkey. Contact us to secure your case.

Legal Notice

This content is prepared for general informational purposes only and does not constitute legal advice. Because different outcomes may arise depending on the specific circumstances of each case, relying solely on this article may result in loss of rights. Professional legal assistance from an attorney is essential for construction contracts and related litigation. Bosphorus Law Firm accepts no liability for any damages that may arise from the use of the information contained herein.

Additionally, this article is protected under Law No. 5846 on Intellectual and Artistic Works . Copying, duplicating, distributing, or using the content for commercial purposes, in whole or in part, without the permission of Bosphorus Law Firm is prohibited. Only limited quoting is permitted with attribution and an active link to the source.