Conceptually; urban transformation is the production and execution of projects for the demolition and rebuilding, revitalization or reconstruction of the problematic areas of the city to turn them into livable and healthy places; whereby urban development is economically and spatially reconsidered.

a) LAW ON THE TRANSFORMATION OF AREAS UNDER DISASTER RISK -
Law No: 6306
Date of Enactment: 16.05.2012
Date of Publication in the Official Gazette: 31.05.2012

b) Resolution on the Support of Interest Provided for the Credits Used from Banks by the Holders of the Right pursuant to Law No. 6306 -
Date of Publication in the Official Gazette: 13.10.2012

c) THE REGULATION FOR THE IMPLEMENTATION OF LAW ON THE TRANSFORMATION OF AREAS UNDER DISASTER RISK -
Date of Publication in the Official Gazette: 15.12.2012

3- What are the financial supports provided by Ministry of Environment and Urbanization within the scope of Urban Transformation?

a) Interest Subsidy

It is the interest subsidy to be given by Ministry of Environment and Urbanization for loans to be utilized by real or legal persons from the banks, provided that they are found eligible within the scope of Law No: 6306, at rates stipulated by the Council of Ministers as to be covered from the Transformation Projects’ Special Account.

b) Housing Benefit

For the owners of buildings in the implementation areas evacuated by a contract and of risky structures out of the implementation area; a house or office can be temporarily allocated if possible; and if not, a monthly rental subsidy at an amount to be determined by the Ministry in compliance with the conditions stipulated in the legislation can be made from the date of evacuation to the delivery date of the houses or offices or to the date to be specified by the relevant organization.

- The amount and term of monthly rent benefit cannot exceed 600 Turkish Lira and 18 months respectively.

- Monthly rent amount is updated on annual basis at the rate of Consumer Price Index published by Turkish Statistical Institute.

- First five months of the rental subsidy to be made can be provided up-front by taking the moving expenses into consideration.

c) Demolition Loan

A demolition loan can be granted by the Ministry from the special account for buildings that are identified as risky or being in the risky area. The demolition work must be done and debris must be removed within six months after the date the loan amount is transferred to the account of the right holder and the Ministry must be informed accordingly.

- The right holders who wish to utilize a loan should make an application to the Provincial Director of Environment and Urbanization in their region.

- The repayment period of the loan is 24 months.

- The repayments begin one month after the disbursement date of the loan.

- The loan amount is 6.000 TL for 1000 m2.

d) Construction Loan

If the loan utilization requests of the right holders who wish to use a loan from the special account are declined by the contracted banks, then a loan indexed to the Consumer Price Index (CPI) as to be covered from Transformation Projects’ Special Account can be extended; and a loan contract shall be executed between the loan users and the Ministry.

e) Identification Loan

For the risky buildings to be identified pursuant to article 3 of the Law, an identification loan from the special account can be extended. The identification process must be conducted within three months after the date the loan amount is transferred to the account of the right holder and the Ministry must be informed accordingly.

- The right holders who wish to utilize a loan should make an application to the Provincial Director of Environment and Urbanization in their region.

- The repayment period of the loan is 24 months.

- The repayments begin one month after the disbursement date of the loan.

- The loan amount is 600 TL (upper limit) for 100 m2.

Risky Building: It is a construction in or out of the risky area which has completed its economic life or determined as being under risk for severe damage on the basis of scientific and technical data.

Risky Area: It is an area which carries the risk of loss of life and property due to the surface structure or the structuring on it, and determined by the Ministry or Administration by taking the opinion of The Disaster and Emergency Management Presidency and resolved by the Council of Ministers upon the proposal of the Ministry.

Reserve Construction Area: It is defined as the area determined by the Ministry by taking the consent of the Ministry of Finance upon the proposal or submission (ex officio) of Turkish Housing Development Administration (TOKİ) or the Administration, as to be used as a new residential area in the implementations to be carried out pursuant to this Law.

Reserve Construction Area;

a) It can be determined by the Ministry at its own initiative.

b) Turkish Housing Development Administration (TOKİ) or the Administration can ask from the Ministry to determine a reserve construction area.

c) Real or private legal persons can make a request from the Ministry to determine a reserve construction area. In order for real or private legal persons to make such a request for the determination of a reserve construction area; this request must be made with the consent of all owners of the immovable subject to the request, and the consent for the transfer of ownership of twenty-five percent square measure of these immovable to the relevant or related entity approved by the Ministry or to the Administration or to TOKİ must be issued as of which its proceeds to be recorded as an income to the transformation projects’ special account.

The identification of risky buildings is carried out upon the request of the owners or legal representatives of the buildings at the first place, whereby the costs to be borne by themselves, by the institutions and organizations licensed by the Ministry, in accordance with the principles and procedures specified in the regulation to be prepared by the Ministry. The list of the companies authorized for the identification of risky buildings is available in the website of Ministry of Environment and Urbanization.

It is identified by the Council of Ministers upon the proposal of Ministry of Environment and Urbanization.

This issue is specified in article 5 of the Law No: 6306. According to the Law; seeking an agreement firstly with the owners is the essence. A temporary house or office allocation or rent allowance can be made to those people as the owners of these buildings evacuated by a contract or, even if they are not the owners, as the tenant or limited real right holders who reside in these buildings or have a business place in these buildings.  

In order for risky buildings to be demolished, a period of not less than sixty days is given to the owners of these buildings. If the owners failed to demolish such buildings within this time period, a notification is served stating that the building shall be demolished by the administrative authorities and an extra period is given thereof. If the demolition is again failed to be processed within this additional time period; then the demolition work of these buildings and their evacuation from human and property are carried out and made by the civilian authorities in liaison with the local administrations, whereby the cost of demolition and other required allowances and loans to be covered from transformation projects’ special account.

The costs of demolition made by the Ministry and the Administration are informed to the relevant directorate of land registry. In order to make the stakeholders of the demolished building be jointly liable for the cost amounts, the directorate of land registry puts a joint mortgage annotation on land shares registered in the land registry and informs the Ministry or the Administration and the real and individual right holders of the building accordingly.

An objection by the owners or the legal representatives of these buildings can be made against the identification result of the risky buildings. These objectives are reviewed and thereafter resolved by the technical commissions that are composed of four people to be designated among the academic members of the relevant professional discipline by the universities upon the request of the Ministry and of the participation of three people working in the Ministry. The cost of identification process made by the Ministry and the Administration are informed to the relevant directorate of land registry. In order to make the stakeholders of the building be jointly liable, the directorate of land registry puts a joint mortgage annotation on cost amounts in the land registry and informs the Ministry or the Administration and the real and individual right holders of the building accordingly.

Interest subsidy to be provided shall be applied according to terms and limits given below. The rate of interest subsidy shall be granted over the life of the loan based on the rate on the disbursement date of the loan and would not be changed.

Total loan amount to which the interest subsidy is granted for a right holder cannot exceed 500.000 TL. For example: From a loan at the amount of 100.000 TL per home, interest subsidy can be extended for 5 loans at maximum.

The interest subsidy payments shall be suspended for the loans of which their repayments are not made by the relevant right holders.

The purpose of the Law on the Transformation of Areas under Disaster Risk will be particularly the integration of lands in the risky areas to be identified. It will not be just the demolition of risky buildings; but also the development of new and healthy cities by integrating the lands to be obtained after the demolition of these buildings.

The foregoing questions and answers have been prepared in accordance with the legislation applicable on their publication date and are for informative purposes only. The information and writings included in this material are compiled from accessible resources within the scope of good faith. Although TEB has compiled the presented material from resources as up to date as possible, it does not guarantee the accuracy and completeness of all information. TEB does not assume any responsibility to third parties for the content of this material, arising out of or related to the content within this material.