Floor-Exchange Construction:
What Landowners Must Know

The floor-exchange (kat karşılığı) model is one of the most common construction arrangements in Turkey's urban areas, allowing landowners to gain new flats without cash outlay. As appealing as this sounds, the model carries significant legal and financial risks if not managed correctly.

How the Model Works

The landowner hands over the land to the contractor. The contractor finances and builds the project, then delivers an agreed number of flats to the landowner upon completion. The remaining flats become the contractor's share. This allows the landowner to gain new property without cash investment while saving the contractor land acquisition costs.

How Is the Flat Ratio Determined?

The split ratio is calculated from the land's market value, the project's scale and construction costs. In prime Istanbul locations the landowner typically retains 40–50%, with the contractor receiving 50–60%. In lower-value areas the contractor share can reach 60–65%. Never agree to the first ratio offered without independent market research.

Contract Essentials

A floor-exchange contract must be notarised. It must specify: delivery date and late-completion penalty, the exact floor, aspect and area of flats allocated to the landowner, material quality standards, the full list of independent units, and compensation terms if the contractor fails to complete. These contracts fall under the Turkish Civil Code and law of obligations; expert legal advice significantly reduces risk.

Revenue-Sharing: The Alternative Model

In some projects the landowner receives a share of sales revenue rather than flats. In high-value locations, revenue sharing can be more advantageous for the landowner; however it carries market risk and uncertainty in timing. At Home Yapı Mühendislik, we transparently present the pros and cons of both models and help clients choose the most suitable approach.