Law No. 6306 on the Transformation of Areas Under Disaster Risk, commonly known as the Urban Transformation Law, entered our legislative framework in 2012. It was enacted as a result of the awareness that emerged particularly after the 1999 Marmara earthquake and has served a very important function.

The law was prepared to enable people living in cities established on an earthquake belt, particularly in Istanbul, to live in buildings that protect their lives and property, and to achieve this by promptly identifying and demolishing risky structures and creating a new building stock. Despite its many shortcomings, it should be regarded as an important step toward addressing a major problem.

Although the law and its implementing regulation concern such an important area, they have undergone significant amendments even though only nine years had passed since they entered into force.

Problems arose in practice because lawyers were not consulted in preparing the law and its implementing regulation, there was a desire to address practical shortcomings over time, ambiguous expressions were used in the face of fundamental legal rules, and the framework did not adopt a holistic approach. Judicial decisions then hindered the sound operation of the process.

The application of the law and regulation that has had the greatest impact on citizens’ daily lives has undoubtedly concerned decision-making processes in risky structures and the legal nature of those decisions. Under this legislation, unlike the Condominium Law No. 634, stakeholders may decide by a two-thirds majority on many matters, including the method by which a risky structure will be renewed and the contractor who will carry out the renewal.

For the reasons set out above, however, uncertainty arose as to when this decision threshold would apply, from which point Law No. 6306 could be applied, and whether the provisions of the Condominium Law No. 634 would govern the matter. Decisions that disrupted implementation also emerged.

It is clear from the law and regulation that, once a building has acquired and become final as a “Risky Structure”, the law governing that structure is Law No. 6306. Article 1 of the Regulation clearly identifies the applicable statute:

“The purpose of this Regulation is to determine the procedures and principles concerning the identification of risky structures, risky areas and reserve building areas; the demolition of risky structures; planning; the valuation of immovables subject to transformation; agreements with rights holders and assistance to be provided; rebuilt structures; and other applications under Law No. 6306 on the Transformation of Areas Under Disaster Risk, dated 16 May 2012.”

The 18th and 20th Civil Chambers of the Court of Cassation, however, adopted a two-part approach to two-thirds majority decisions made before the amendment introduced to the legislation in 2016.

The Court of Cassation held in its decisions that, for a two-thirds majority decision made before the 2016 amendment to be valid, the risky structure had to be demolished. If the building remained in existence, the Condominium Law No. 634 would apply, and matters involving extraordinary transactions, such as rebuilding the building and deciding which method or company would carry out the renewal, would require unanimity rather than a two-thirds majority. (20th Civil Chamber, 2017/4769 E., 2017/8004 K.; 20th Civil Chamber, 2017/3337 E., 2017/9610 K.; 18th Civil Chamber, 2015/1794 E., 2015/15821 K.) In response to this incorrect legal assessment of decisions made before the 2016 amendment, the amendment adopted in 2016 expressly added to Article 15 of the Regulation and Article 6 of the Law that a two-thirds majority decision could be made “without requiring the structures to have been demolished”.

After this amendment, the same Civil Chambers changed their case law, considered completion of the risky-structure assessment process sufficient for a two-thirds majority decision, and held that the provisions of the Condominium Law could no longer be applied. (20th Civil Chamber, 2018/1455 E., 2018/7186 K.; 20th Civil Chamber, 2018/3580 E., 2018/7187 K.; 20th Civil Chamber, 2019/3617 E., 2019/6532 K.)

Another issue continued to be debated in practice and before some local courts until the 2019 amendment. The question was whether the two-thirds decision had to be adopted at a “meeting” and, accordingly, whether such a meeting had to be called and whether a particular form of invitation was required. Some administrative courts reasoned, despite the absence of expressions concerning a meeting, invitation or form of invitation in the law and regulation, that the wording in Article 15 of the Regulation - “If an agreement cannot be reached unanimously, decisions on the applications to be carried out shall be made by at least a two-thirds majority of the stakeholders in proportion to their shares” - implicitly required a meeting. Following these decisions, the legislation was substantially amended in 2019 and the phrase “if an agreement cannot be reached unanimously” was removed from Article 6 of the Law and Article 15 of the Regulation.

Although the 2016 amendments had already removed matters such as “meeting”, “invitation to a meeting” and “the form of the invitation” from the legislation, the 2019 amendment eliminated any remaining uncertainty and prevented further judicial decisions contrary to the purpose and wording of the law.

Following this final amendment, a two-thirds decision adopted without holding a meeting or issuing an invitation became valid. In every event, however, the requirement remained that the decision be served through a notary, under the Notification Law No. 7201, on stakeholders who did not participate in the two-thirds majority decision.

After this final amendment, administrative courts, regional administrative courts and civil courts correctly stopped requiring a meeting or an invitation to a meeting for a two-thirds majority decision. They began issuing decisions that allowed urban transformation to proceed effectively and swiftly, as intended.

Since Law No. 6306 on the Transformation of Areas Under Disaster Risk is newer than, and is a special statute in relation to, the Condominium Law No. 634, it is clear that the legislature intended the provisions of this law, with its own processes and methods, to apply to structures that have acquired the status of a risky structure, separately from the provisions of the Condominium Law.

It should not be forgotten that the legislature has continuously amended the legislation to enable urban transformation to proceed as quickly as possible. Accordingly, examining the provisions of the Condominium Law on the basis of an incorrect assessment of the legal nature of a two-thirds majority decision adopted by citizens must be regarded as contrary to law.