Construction-for-land-share agreements are one of the most frequently used development models in Türkiye, particularly in urban transformation and large-scale residential projects. From a contractor’s standpoint, these agreements offer the opportunity to develop real estate projects without upfront land acquisition costs. However, they also involve significant legal, technical, and financial risks if not structured correctly.
At Bayraktar Attorneys, we regularly advise local and foreign contractors, investors, and developers on construction-for-land-share projects. Below is a comprehensive and practitioner-oriented guide that explains all major contract models, their advantages and disadvantages, and the most common legal mistakes contractors make.
Key Factors That Make a Construction-for-Land-Share Agreement Advantageous for Contractors
For contractors, the success of a construction-for-land-share agreement depends primarily on:
Control over land shares
Access to project financing
Project timing and cash flow
Proper management of title deed risks
A balanced and legally secure relationship with the landowner
Different contractual models shape how and when land shares are transferred, the level of legal security provided to the contractor, and the overall feasibility of the project. Each model has its own advantages and disadvantages.
1. Agreements Based on Full Transfer of the Land to the Contractor
Under this model, the landowner transfers all land shares to the contractor at the beginning of the agreement. The contractor becomes the registered title holder and initiates construction as the legal owner of the land.
Advantages
Full control over the land, as the contractor holds title
Easier access to bank financing and project loans
Ability to use the land as collateral for financial institutions
Stronger presales capability, as title transfers can be completed immediately
Faster and more independent permit and licensing processes with municipalities
Disadvantages and Risks
If the contractor abandons the project or faces financial difficulties, the landowner cannot directly reclaim the property and must file a lawsuit
High level of trust is required between the parties
When Should This Model Be Preferred?
If the contractor has strong financial capacity
If there is a long-term trust relationship with the landowner
If rapid project commencement and aggressive presales are required
2. Agreements Based on a Promise of Sale Secured by Annotation on the Title Deed
In this model, the landowner does not immediately transfer title. Instead, a notarized promise of sale agreement is executed and annotated on the land registry. This is one of the most common and balanced construction-for-land-share models in practice.
Advantages
Maintains trust with the landowner while legally securing the contractor’s rights
The title deed annotation protects the contractor against third parties
More acceptable to cautious landowners
If title transfer is delayed, the contractor may request judicial registration based on the promise of sale
Disadvantages and Risks
Some banks may refuse to accept this structure as collateral
Despite the annotation, additional safeguards may be required
The legal effect of the annotation is limited to five years and must be renewed if the project is not completed
When Should This Model Be Preferred?
If the landowner is cautious but cooperative
If title transfer is delayed due to tax or administrative reasons
If a balanced and mutually protective structure is desired
3. Agreements Based on Gradual Transfer of Land Shares
In this model, land shares are transferred to the contractor progressively as construction milestones are completed, such as foundation completion, structural works, or occupancy permits.
Advantages
Transparent and trust-based progress
Title transfer is earned through measurable performance
Easier to persuade landowners
Allows for progress reports and control mechanisms at each stage
Disadvantages and Risks
Limited access to financing at early stages
Banks may be reluctant to provide collateral-based loans
Increased documentation and compliance costs
Risk of landowner refusing transfer approval at certain stages
When Should This Model Be Preferred?
If working with a landowner for the first time
If a balanced and risk-sharing approach is required
In institutional or phased projects
4. Hybrid Model: Gradual Transfer Combined with Presales and Promise of Sale
This flexible model combines gradual title transfers, presale agreements, and sometimes promise-of-sale annotations to secure rights.
Advantages
Balances protection for both contractor and landowner
Allows presales even if title transfers are delayed
Suitable for mixed-use or multi-block projects
Disadvantages and Risks
Requires meticulous contract management
Complex legal consequences in case of disputes
When Should This Model Be Preferred?
In large-scale projects
In developments with multiple blocks or functions
Where presales, financing, and construction must proceed simultaneously
Conclusion on Contract Model Selection
Each construction-for-land-share model carries its own legal and financial implications. The correct choice depends on the contractor’s capital strength, the project structure, and the landowner’s approach. Regardless of the model, the agreement must be legally robust, transparent, and enforceable.
The Importance of Proper Legal Structuring
For contractors to secure their investment and rights over the land, construction-for-land-share agreements must:
Be executed before a notary public in the form of an official deed
Be annotated on the title deed
Clearly define construction standards, completion criteria, and delivery conditions
Failure to comply with formal requirements may result in the agreement being considered legally invalid, even if construction is completed.
The 5 Most Common Mistakes in Construction-for-Land-Share Agreements
Mistake 1: Not Executing the Agreement as a Notarial Deed
Agreements involving land transfer must be executed as a notarial deed. Simple written contracts or signature-only notarizations are legally insufficient and may result in loss of title claims.
Mistake 2: Undefined Construction Quality and Technical Specifications
General terms such as “first-class materials” are insufficient. Materials, brands, technical standards, and application areas must be clearly specified to avoid disputes.
Mistake 3: Absence of Completion Criteria
The agreement must clearly define when construction is deemed completed, including administrative approvals such as occupancy permits and utility connections.
Mistake 4: Starting Construction Without Title Deed Annotation
Without annotation, the contractor’s rights cannot be asserted against third parties. This exposes the project to serious legal and financial risks.
Mistake 5: Failure to Allocate Permit and Occupancy Responsibilities
The agreement must clearly state who is responsible for construction permits, occupancy permits, taxes, and administrative procedures.
How Bayraktar Attorneys Assists Contractors and Investors
At Bayraktar Attorneys, we provide comprehensive legal support for construction-for-land-share projects, including:
Drafting and notarization of construction-for-land-share agreements
Title deed annotations and registration procedures
Risk analysis and contract structuring
Dispute prevention and litigation
Legal support for foreign investors and developers in Türkiye
Proper legal planning at the project’s inception protects both the contractor’s investment and the project’s long-term success. For complex construction-for-land-share projects, professional legal guidance is not optional but essential.
