Urban Transformation Law in Immovable Properties Encumbered with Mortgages, Seizures, and Real Rights Within the Scope of Law No. 6306 | 2025-2026 Current Case Law

“I have a bank mortgage on my apartment, can I participate in the urban transformation process?” or “There’s an attachment on my property, can I sign a contract with a contractor?” are among the most frequently asked urban transformation questions today. The clear provision of the law and established judicial precedents explicitly answer these questions: the existence of mortgages, seizures, precautionary attachments, usufruct rights, or similar real rights and annotations does not constitute an obstacle to the urban transformation process. This article discusses the legal basis of this principle, its practical implications, and exceptions that need attention.

1. Fundamental Principle: Not an Obstacle, but a Change in Form

Article 6/1 of Law No. 6306 sets forth the fundamental principle of urban transformation law as follows:

The essence of this provision is as follows: regardless of what is recorded in your land registry — bank mortgage, execution attachment, precautionary attachment, usufruct right, easement right — technical and administrative procedures within the scope of urban transformation cannot be stopped. The creditor’s consent is not required; the Ministry and the Administration have the authority to act ex officio.

Rights and annotations do not disappear; they merely transform into the new form of the immovable property — first into a land share, then into a new independent section — and continue to follow it. In legal terms, this is called the principle of “the right following the property” or “continuation by changing form.”

2. Land Stage After Demolition: Ex Officio Cancellation of Floor Easement and Condominium Ownership

When a risky building is demolished, the building legally ceases to exist; the independent sections and land shares in the land registry are registered as land without the need for a separate transaction. At this stage, the law is extremely clear:

The Council of State and the Constitutional Court have affirmed that this regulation is compatible with the constitutional right to property. In the Constitutional Court’s decision dated 10.07.2025 (2023/149 E., 2025/147 K.), it was accepted that the aim of creating a safe living environment against disaster risk necessitates public interest and that the absence of consent is proportionate to this aim.

3. Continuation of Rights in the New Building: Which Independent Section Does It Apply To?

When construction is completed, old rights and encumbrances are transferred to the new structure while new floor easement (preliminary title) and condominium ownership are established. However, this transfer does not occur for everyone, but only for the owner who is obligated:

Practical result: The mortgage on the title deed of apartment A’s owner passes to the independent section that owner A will receive in the new building; it does not affect other condominium owners. This regulation provides a critical assurance for homebuyers and investors.

4. Mortgaged and Seized Share in Public Auction Sale

When the land share of the non-participating owner is forcibly put up for sale, the encumbrances on the title deed cannot prevent the sale:

The practical significance of this regulation is great: a mortgaged or attached share cannot constitute an obstacle to sale in urban transformation. The creditor bank or enforcement office collects its receivable from the sale price; for this, there is no need to initiate further enforcement proceedings or obtain a court order — the Presidency makes the notification spontaneously.

5. Special Attachment Protection After Transfer to Contractor

After the flat-for-land contract is signed and the title deed is transferred to the contractor, the law provides for a special protection against the contractor’s own creditors, distinct from the owner’s creditors:

There are important distinctions to note in this article:

Scope of protection: It is only valid against the contractor’s debts to third parties.

 Out of scope: The owner’s own debts are not covered by this protection; the owner’s creditor can place an attachment on the transferred immovable.

Time limit: If the floor easement is not established within 6 months from the start of construction, the protection ceases.

 Exception: Material and labor receivables cannot benefit from attachment protection.

6. Frequently Asked Questions Regarding the Law

Q: I have a mortgaged apartment, can I make a contract with the contractor?

Yes. There is no obstacle to drawing up a contract. The contract must include the details of all owners and holders of limited in rem rights; an in rem right holder who does not sign is included in the contract.

Q: I have an enforcement lien, can I attend the simple majority meeting?

Yes. The owner of the encumbered property can attend the meeting, vote, and be a party to the decisions. The lien does not exclude the right holder from these processes.

Q: Will my rental assistance application be rejected due to the mortgage on my property?

No. The rental assistance application is made independently of any encumbrances on the title deed. The required documents for the application are the eviction document, ID, and IBAN; the mortgage status does not affect the application.

Q: To which apartment in the new building will the bank’s mortgage transfer?

It is automatically transferred to the new independent section allocated to the previous owner of the property, without requiring the creditor’s consent. Other unit owners are not affected by this mortgage.

Q: Can my mortgaged share be sold in an open auction?

Yes. The mortgage is not an obstacle to the sale. The sale price is blocked, and the mortgage creditor is notified; the creditor exercises their right over the sale price.

Q: Can demolition costs be collected from the mortgage creditor?

No. Demolition costs are collected from the owners in proportion to their shares. The mortgage creditor is not liable for these costs.

7. Exceptions to Consider

Like every rule, this principle also has exceptions:

Reinforcement decision: If reinforcement is preferred instead of demolition, the written consent of 4/5 of the condominium owners is required (Condominium Law Art. 19/2). Whether the mortgagee’s approval is needed in this process is debatable.

Objection to the determination of current market value: If the real value of an attached or mortgaged share is stated below its actual value in the valuation report, both the owner and the creditor have the right to object.

Creditor’s objection to the sale price: Enforcement law or Civil Code provisions apply to the payment of the blocked sale price to the creditor; this process is outside the scope of Law 6306.

Difficulty in obtaining consent (practical problem): In practice, some land registry offices request consent from the mortgagee in transactions requiring a change in land share. Although this practice is contrary to the spirit of the law, it can cause delays in practice.

8. Judicial Precedent: Key Decisions

Conclusion

Law No. 6306 clearly stipulates that mortgages, seizures, provisional seizures, usufruct rights, and other real rights on immovable property do not constitute an obstacle to the urban transformation process. This approach prioritizes the goal of creating a healthy built environment against disaster risk, striking a balance between creditor rights and public interest: creditors do not lose their rights; instead, the rights transform from the immovable property into the sale price or a new independent unit.

However, in practice, it is observed that some land registry offices unlawfully demand consent, deficiencies are experienced in fair value determinations, and the 6-month limit for seizure protection after transfer to the contractor is significant. Therefore, it is recommended that the process be carried out with the assistance of an urban transformation lawyer, communication be established with creditors at an early stage, and clear provisions regarding mortgage management be added to the contract.

2M Law Office  |  Tuzla / Istanbul  |  Based on Law No. 6306 and its Implementing Regulation.  This article is for general informational purposes only; it does not substitute for specific legal advice.

Why is Expert Legal Support Necessary?

Although it is legally possible for an immovable property encumbered with a mortgage, seizure, or real right to enter the urban transformation process, proper management of this process is critically important. The following facts make this imperative.

The law is clear, but practice differs. Although Law No. 6306 explicitly states that consent is not required, in practice, some land registry offices demand approval from the mortgage creditor. This stance is contrary to the law; however, if not challenged, it can halt the process for months, even years. This obstacle cannot be overcome without legal pressure and proper correspondence.

The determination of the fair market value is crucial for the creditor. If there is a mortgage on the share offered for public auction, the correct determination of the sale price is a fundamental guarantee for both the owner and the creditor. There is a 30-day period to appeal the appraisal report; if this period is missed, the right is forfeited. Accepting the commission’s valuation without obtaining an independent appraisal can lead to irreversible damages.

Mortgage management is neglected during the contract phase. In the vast majority of construction-for-land-share contracts, the provision for mortgage protection against the contractor is either incomplete or entirely absent. When the 6-month obligation to establish floor easement, as per Article 6/10, is not included as a liability in the contract, creditors can place an attachment on the land once the protection window closes; this situation can directly halt construction.

The blocking and payment process does not operate automatically. After the public auction sale is completed, blocking the sale price and making payment to the mortgage creditor is theoretically automatic; in practice, however, it is a process that requires coordination among the enforcement file, the land registry office, and the Urban Transformation Directorate. If not followed up, the creditor may not receive payment for a long time, and the owner may face undue liability.

Holders of limited real rights are often overlooked. If holders of usufruct rights, habitation rights, or easement rights are not included in the contract, validity issues may arise later. It is essential to examine the land registry records with an expert eye to identify these individuals; the actual user and the legal right holder are not always the same person.

Delays in rent assistance and “Half from Us” applications cannot be remedied. The 1-year forfeiture period, active from the eviction date, may pass unnoticed while focusing on resolving the mortgage issue. The same person cannot receive both rent assistance and interest support; a wrong choice can result in a difference of hundreds of thousands of liras over the years.

Consequently, to effectively exercise the rights granted to you by law, to ensure the timely and complete protection of your rights, and to balance the interests of the parties at every step of the process, seeking support from a lawyer experienced in urban transformation law is more than a necessity; it is a rational investment.