Is there a guarantee exemption for structures not exceeding 500 square meters in urban transformation, and what are its conditions? Conditions regarding basement, number of floors, and sales restrictions.

Although a guarantee is generally mandatory in urban transformation, the legislation has defined an exception for a group of small-scale structures intended for personal use. This exception is of great importance, especially for property owners who will build a small, detached structure on their own land, because being exempt from the guarantee obligation significantly reduces the project’s cost and cash requirement. However, benefiting from this exemption is subject to specific and jointly met conditions.

For Which Structures Is The Exception Valid?

The legislation provides for a guarantee exemption for small-scale structures built personally by the owner. According to the regulation; in structures on a single plot with a maximum of two floors in addition to a basement and a total construction area not exceeding 500 square meters, if the plot owner constructs their own building, provided that no sales are made to third parties before the construction is completed and an annotation is placed on the land registry regarding this, the obligation to provide a 6% guarantee is not required at the building permit stage (Implementation Regulation Art. 13/9-c). As can be seen, the exception is a highly conditional regulation tied to the physical size of the structure, the person constructing it, and sales restrictions.

Four Conditions for Benefiting from the Exception

To benefit from this exemption, the following four conditions must  be met jointly  (Implementation Regulation Art. 13/9-c):

Firstly, the building on a single parcel must have a maximum of two floors, excluding a basement. Secondly, the total construction area of the building must not exceed 500 square meters. Thirdly, the parcel owner must be constructing their own building; meaning the building should not be a project commissioned to a third-party contractor for profit, but rather the owner’s own structure. Fourthly, sales to third parties must not be made before the construction is completed, and a note to this effect must be placed in the land registry.

If any of these conditions are not met, the exception does not apply, and the obligation to provide a 6% guarantee becomes active again. For example, if the building exceeds 500 m² or if the owner has the building constructed by a contractor with the intention of selling it, the exemption does not apply.

Why Are the Conditions So Strict?

The reason for subjecting the exception to strict conditions is to limit the exemption only to small structures truly intended for personal use. The main purpose of the guarantee is to secure third parties (especially apartment buyers) and the process. If the owner builds their own small structure and does not sell it before construction is complete, no guarantee is required as there is no third-party risk to be protected. However, the condition of registering the sales restriction in the land registry ensures that this security does not remain merely on paper. For all stages of the process, the general framework of the urban transformation process and for choosing the guarantee type according to the financing model, it can be examined which model is more advantageous in urban transformation. The current text of the legislation can be accessed via the Legislation Information System and the Ministry of Environment, Urbanization and Climate Change.

Frequently Asked Questions (FAQ)

Is a guarantee mandatory for structures not exceeding 500 m²? No, if four conditions are met together; no guarantee is required for structures on a single parcel, with a maximum of two stories excluding a basement, not exceeding 500 m², built by the owner, not sold before construction is complete, and for which a notice has been placed in the land registry (Implementation Regulation Art. 13/9-c).

What happens if one of the conditions is missing? The exception does not apply, and the obligation to provide a 6% guarantee comes into effect (Implementation Regulation Art. 13/9-c).

What does the 500 m² limit cover? It refers to the total construction area of the building; this area must not exceed 500 square meters (Implementation Regulation Art. 13/9-c).

If I have it built by a contractor, will I be exempt? No. The exception is conditional on the parcel owner building their own structure (Implementation Regulation Art. 13/9-c).

Why is Expert Lawyer Support Necessary?

Correct evaluation of whether the four conditions for the 500 m² exception are fully met prevents unnecessary collateral payment or, conversely, prevents the refusal of the license due to an erroneous exemption claim. Especially the conditions of “building one’s own structure” and “registration of the sales restriction in the title deed” are often overlooked. Urban transformation is a multi-layered process where administrative law, real estate law, and contract law intersect, and even a single procedural error can lead to significant loss of rights. For this reason, it is of great importance that the exemption evaluation is carried out with a lawyer specialized in the field.

2M Law Firm (Att. Meryem Günay) provides services across Turkey, especially in Istanbul, where urban transformation is most intensive; including Istanbul’s priority transformation districts of Tuzla, Pendik, Kartal, Maltepe, Ümraniye, Ataşehir, Kadıköy, Sancaktepe, and Küçükçekmece, as well as Kocaeli’s Gebze and Darıca regions. As Istanbul urban transformation lawyers and Tuzla urban transformation lawyers, we offer legal support to right holders and contractors in collateral exemption processes.