A contractor can be defined as the party that provides the necessary capital and workforce for a construction project, obtains all required permits and approvals from the relevant authorities, and manages the project from start to finish until it is delivered to the appropriate parties. This article will address the rights of consumers against contractors.
A – What Contracts Can Be Made with the Contractor?
a. Construction Contract in Return for Flat or Land Share:
This contract is concluded between the contractor and the landowner. Under the contract, the contractor undertakes to construct independent sections on the land and to deliver to the landowner the portion allocated to them. In turn, the landowner undertakes to transfer to the contractor, or to third parties designated by the contractor, a share of the land proportional to the contractor’s contractual entitlement. This contract is a mixed contract that imposes reciprocal obligations on both parties.
b. Preliminary Contract for Sale:
It is a contract between the contractor and the third party. If the conditions in the contract are fulfilled, this contract gives the parties the right to request a contract, regarding the real estate written in the contract. One of the contract’s parties undertakes to assign the real estate and the other party undertakes to take over the real estate, and this type of contract is contract of reciprocal promises.
B – The Concept of Defect
A defect is defined as a breach of contract arising from the goods, at the time of delivery to the consumer, not possessing the characteristics agreed upon by the parties.
A clear defect is a defect that can be identified through visual inspection, whereas a hidden defect is one that cannot be detected upon reasonable examination and becomes apparent only after delivery or during use of the goods. In this context, the real estate delivered by the contractor must be inspected upon delivery. However, in the case of a hidden defect, the law does not impose an obligation to discover such defects at the time of inspection.
Examples of defective or incomplete performance by the contractor vary depending on the specific circumstances but may include failures such as not obtaining the mandatory construction permits from the relevant authorities, delivering the apartment late, using materials of a brand or quality other than those promised, or failing to deliver the promised apartment at all.
C – Lapse of Time
Article 478 of the Turkish Code of Obligations states, “If the contractor has produced a defective work, any actions brought on this ground shall become time-barred two years after the date of delivery for works other than immovable structures; five years for immovable structures; and, if the contractor is grossly at fault, twenty years regardless of the nature of the defective work.” Thus, the contractor’s liability for defects is subject to a five-year limitation period, or twenty years in cases of gross fault. Once these periods have expired, the right holder may no longer bring a defect-based claim against the contractor.
D – What are the Consumer’s Optional Rights in the Event of a Defective Delivery of Real Estate?
In case of defective delivery of real estate, the consumer’s optional rights, which can be applied to the contractor by law, are regulated in Article 11 of the Law on Consumer Protection, and the contractor is obliged to fulfill this request preferred by the consumer.
a. Rescission of Agreement:
If the immovable property delivered by the contractor is defective to the extent that the consumer cannot use it or cannot be forced to accept it in equity, or if it is contrary to the provisions of the contract to the same extent, the right to withdraw from the contract is one of the optional rights of the consumer. Under Article 11/5 of the Law on Consumer Protection, which states, “In cases where the consumer chooses to exercise the right to rescind the contract or request a discount from the price in proportion to the defect, the complete amount paid, or the amount of the discount made from the price shall be refunded to the consumer immediately,” all of the price paid by the consumer must be returned to the consumer.
b. Requesting Discount:
Pursuant to the provision in Article 11(1)(b) of the Law on Consumer Protection, the consumer also has the right to retain the purchased item and request a reduction of the purchase price in proportion to the defect. If this optional right is exercised by the consumer, the price paid by the consumer is discounted and returned to them immediately.
c. Requesting a Repair:
In accordance with Article 11/1-c of the Law on Consumer Protection, another optional right of the consumer is the right to request free repair of the sold good at seller’s expense, unless it requires an excessive expense. The important point here is that the repair does not require an excessive expense. If the repair does not meet this condition, the consumer may use one of the other optional rights.
According to Article 11/4 of the Law on Consumer Protection, if the consumer chooses either the right to free repair or to have the defective goods replaced with a defect-free equivalent, the contractor is obliged to fulfill this request within sixty working days from the date it is made, in the case of immovable properties intended for residential or vacation purposes.
d. Requesting Replacement with a Defect-Free Equivalent:
In accordance with Article 11/1-d of the Law on Consumer Protection, another optional right of the consumer is “requesting a replacement of the defective good with a defect-free one, if possible”. Pursuant to this article and the following provisions, this optional right of the consumer should not cause disproportionate difficulties for the seller who is the contractor. In case of disproportionate difficulties, the consumer may use other optional rights.
In addition to these optional rights, the consumer also has the right to claim damages. Article 11(6) of the Law on Consumer Protection provides: “All expenses arising from the exercise of the optional rights shall be borne by the party responsible for performing that right. The consumer may also claim compensation together with any of these optional rights, in accordance with the Turkish Code of Obligations No. 6098 of 11/1/2011.” Pursuant to Article 112 of the Turkish Code of Obligations — “If an obligation is not performed at all or is performed improperly, the obligor must compensate the obligee for the resulting damage, unless the obligor proves that the non-performance cannot be attributed to them” — the consumer is entitled to request compensation in addition to the optional rights available to them.
E – Conclusion
In case of defective delivery of the immovable property, the consumer’s optional rights against the contractor are regulated in Article 11 of the Law on Consumer Protection, and the contractor is obliged to fulfil the request preferred by the consumer.
The optional rights of the consumer include withdrawing from the contract, requesting a reduction in the price proportionate to the defect, requesting repair, and requesting replacement with a defect-free equivalent. In addition to these optional rights, the consumer also has the right to claim compensation.
Betül Önal Payze, Senior Associate
