Significant amendments regarding the real estate sector, in particular the developers, were introduced to the Construction Audit Law No. 4708 ("Law") within the scope of the Omnibus Bill No. 7143 published in the Official Gazette dated 18 May 2018 and numbered 30425.
The most significant amendment to the Law is regarding the procedure for selecting the construction audit company. Prior to 1 January 2019, the building owners could enter into a contract with any construction audit company that they preferred. As from 1 January 2019, the construction audit company will be selected electronically in accordance with the principles and procedures to be published by the Ministry of Environment and Urbanization ("Ministry"). In addition, the new construction audit service contracts may only be terminated in cases to be determined by the Ministry.
Another amendment to this Law is regarding the service fee to be paid to the construction audit company for the construction audit service. Prior to 1 January 2019, it was determined that the service fee could not be less than 1.5% of the approximate cost of construction and that this fee would be adjusted accordingly if the work continued for more or less than 2 years. As from 1 January 2019, the construction audit service fee will be calculated as 1.5% of the approximate cost of construction. Therefore, the provision on the adjustment of the service fee in accordance with the duration of the service has been repealed.
Construction audit service contracts executed before 1 January 2019 shall remain in effect, and the transactions will be continued in accordance with the provisions of the contract.
Details of the amendments mentioned above shall be determined by a regulation prepared by the Ministry.
Originally published December 28, 2018.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
