A case study on private real estate investments

This is an absolutely hot Monday morning. Under normal circumstances I would have been sitting in front my computer in a dazed mood. But this is not the case today even though this is not one of those cloudy Mondays of Istanbul. I am in my Bodrum office. The Bitez area is my favorite as there is always a breeze here, even on these very hot days. I love to be here and I feel I am more creative when I am in Bodrum.

There are many things to do here in Bodrum: Fatih Erkoc and his fabulous band have a fantastic show at the Karada Marina. There is also a boat show at the D-Marin Turgutreis Marina. A Turkish show titled “Hisseli Harikalar Kumpanyası” is on the stage after having no shows for more than 20 years.

As you can read, I have had a long weekend off as I did not have time for a holiday this season. It was, and actually it still is, a very busy summer in my office.

There are several reasons for us to have a busy summer period and some of them may be of interest to foreign investors. The new zoning plan has been released and, as a consequence, many things have changed radically in Bodrum. This change has had a great impact on the construction and real estate business in this area. The construction capacity is now reduced and this has affected the land prices.

Another reason is that new international players are now getting into the Turkish market. This is good news and gives me an indication that the market will grow in the coming years.

Ok, let’s go back to the case study. I will give a very brief summary of the basic facts for the case study today because we don’t have enough space for this. Tomorrow, I will give a longer summary for the readers who have no Internet connection, and for those readers who do have the Internet can find my previous articles on this case study on the Today’s Zaman Web page.

To give a very brief summary, this case study is based on Ms. Investor, a foreign investor buying a property in Turkey, and Mr. False Real Estate Agent, a first timer who just got into the real estate business, have met and initiated the process for a real estate investment.

In Friday’s edition, Mr. False Real Estate Agent found out that the cooperative villa was not registered with the land registry office, and that the sales agreement did not state anything like “the property is registered with land registry individually, and can be transferred free of any pledges and covenants.” Following on from the argument between Mr. False Real Estate Agent and the cooperative villa seller, the seller informs Mr. False Real Estate Agent that each villa should certainly be given a separate “tapu” (property ownership) document in the future, but that this may take a very long time and no one can give an exact date for their completion.

Mr. False Real Estate Agent is desperately trying to find a solution. He thinks there should be some legal rights that can be transferred to third parties. He asks the seller how to transfer the rights on the property. The seller says that what he can transfer is his membership with the cooperative because this is the only right he has in hand. Mr. False Real Estate Agent is astonished, and he then thinks breaking the deal may be the best idea. Mr. False Real Estate Agent and the seller ask for an appointment from the board of the cooperative to see if there could be any other solutions

Tomorrow, we will continue with the case study.