A prepaid house sales contract is a perfect reciprocal contract where the consumer undertakes to pay the sale price of a residential real estate in advance or in installments, and where the developer undertakes to transfer or deliver the real estate to the consumer after the full or partial payment of the price. The prepaid house sales contract is specially regulated under the consumer protection law due to the fact that there are risks that consumers may suffer considering that the sale takes place during the construction of the residence or when there is no construction at all.
In the provision of Article 10/1 of the “Regulation on Prepaid House Sales” (“Regulation”), which was put into effect to regulate the application procedures and principles regarding the prepaid house sales regulated under Consumer Protection Law No. 6502, it was imposed that the transfer or delivery period for the prepaid house sales shall not exceed 36 (thirty-six) months from the date of the contract. With the “Regulation Amending the Regulation on Prepaid House Sales” published in the Official Gazette dated 04 August 2022 and numbered 31913, the provision of Article 10/1 of the Regulation has been amended. With the said amendment, it is regulated that the prepaid house project shall be delivered to the consumer within the time promised in the contract and that this delivery period shall no longer exceed 48 (forty-eight) months from the date of the contract. The effective date of this amendment is determined as October 1, 2022.
Pursuant to Article 10/2 of the Regulation, in order for the transfer or the delivery of the residence to the consumer to be completed, (i) the residence subject to the condominium shall be registered in the name of the consumer; or (ii) the residence subject to the construction servitude shall be registered in the name of the consumer and the possession of the residence suitable for habitation shall be transferred.
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