

A foreign investor buys a factory in Turkey and later discovers unauthorized extensions, warehouses, mezzanine floors or production areas. Learn the demolition, sealing and administrative fine risks, whether the additions can be legalized and whether the new owner can be fined for construction completed by the previous owner.
A foreign investor purchasing an operating factory in Turkey may believe that the most important legal issues are ownership, environmental permits, machinery, employees, production licences and financing. After completion, however, a municipal inspection may reveal a much more serious real estate problem: parts of the factory were constructed without a building permit or contrary to the approved architectural project.
The unauthorized additions may include an enlarged production hall, warehouse, loading area, mezzanine floor, office block, enclosed canopy, additional manufacturing section, basement, technical room or extension connecting separate factory buildings.
The investor may not have constructed any of these areas. Some may have existed for many years before the acquisition. The seller may even have described the entire facility as fully permitted.
Nevertheless, the municipality may inspect the property, prepare a construction stop record, seal the unauthorized sections and begin proceedings that may ultimately lead to demolition. Administrative fines may also arise, although an important distinction must be made between the planning status of the unlawful structure and personal responsibility for an administrative fine.
Under Article 32 of the Planning Law, where a structure has been built without the required permit or contrary to the permit, permit annexes or applicable planning rules, the competent administration may determine the existing condition, seal the structure and stop construction. The violation is also notified to the land registry for annotation in the declarations section under the current statutory framework.
Article 42 separately regulates administrative fines. Danıştay jurisprudence emphasizes the principle of personal responsibility in these fines: the person who owns the property today is not necessarily the person who legally qualifies as the “builder/owner of the structure” responsible for an unauthorized addition constructed before the acquisition.
This distinction can be decisive for a foreign investor who unknowingly purchases a factory containing historical planning violations.
A factory may have an original building permit covering the main industrial structure while later additions were constructed without obtaining the necessary approval.
Examples may include:
additional production halls,
warehouse extensions,
mezzanine floors,
administrative offices,
loading and unloading structures,
enclosed canopies,
additional floors,
security structures,
technical buildings,
storage areas,
worker facilities,
basement extensions, or
changes increasing the permitted construction area.
The investor should never assume that the existence of an original factory permit means every structure currently visible on the parcel is legally covered by that permit.
This is extremely common in older industrial properties.
For example, the original 8,000-square-meter factory may have been lawfully permitted.
Over the following twenty years, previous owners may have added:
2,000 square meters of warehouse space,
a 700-square-meter mezzanine,
a 400-square-meter office extension, and
an enclosed loading area.
The legal analysis should identify each addition separately rather than automatically treating the entire industrial facility as either legal or illegal.
Immediately obtain:
the original building permit,
all revised permits,
approved architectural projects,
structural projects,
site plans,
building-use or occupancy documentation,
later project amendments, and
municipal archive records.
These documents establish what the administration actually authorized.
The investor should commission an architect, engineer or other appropriate technical professional to compare the municipal records with the physical property.
Prepare a building-by-building and floor-by-floor comparison.
For each structure, identify:
approved area,
existing area,
approved height,
existing height,
approved use,
existing use, and
whether later authorization exists.
This converts an unclear planning problem into a measurable compliance file.
A seller may advertise:
“15,000 square meters closed factory area.”
That is a commercial description.
It does not establish that 15,000 square meters are legally permitted.
The approved construction area shown in the municipal records may be significantly lower.
This is another major due-diligence mistake.
The land registry establishes ownership and other registered rights concerning the property.
It does not, by itself, prove that every building, warehouse, extension or mezzanine standing on the land was lawfully constructed.
Factory acquisition due diligence should therefore include both land-registry and municipal construction records.
A factory may possess an occupancy permit relating to its original configuration.
That does not automatically prove that later additions were covered.
Danıştay’s current application of Article 42 expressly recognizes that new construction activity undertaken without a permit even after a building-use permit has been obtained can generate additional sanction consequences.
The investor should therefore compare the date and scope of the occupancy documentation with the dates of later physical additions.
The first major risk is enforcement under Article 32 of the Planning Law.
Where the administration determines that construction was undertaken without a permit or contrary to the permit, approved projects or applicable legislation, it records the existing condition and may seal the structure.
Where construction is ongoing, work is stopped immediately.
The fact that the property is an operating industrial facility does not automatically prevent enforcement.
Potentially, yes.
An unauthorized structure does not become lawful merely because it has physically existed for many years.
The investor must determine whether the addition was ever:
permitted,
incorporated into an approved revision,
otherwise lawfully regularized, or
covered by another legally effective construction document.
Physical age alone should not be treated as legalization.
No.
A sale transfers ownership of the property; it does not automatically cure existing planning violations.
Therefore, the investor may purchase a factory containing a physical structure that remains vulnerable to municipal enforcement even though the investor did not build it.
This is one of the most important distinctions in the entire transaction.
Suppose the previous owner constructed an unauthorized warehouse ten years ago.
The foreign investor buys the factory today.
Two separate questions arise:
Can the unauthorized warehouse remain standing?
and
Can the new investor personally be fined for having constructed it?
These questions should not be merged.
The structure may remain subject to planning enforcement even where personal responsibility for an administrative monetary fine cannot lawfully be attributed to the new owner.
Article 42 of the Planning Law provides administrative fines for unauthorized construction or construction contrary to the permit, permit annexes or planning legislation. Depending on the statutory circumstances, liability can concern the person responsible as the structure’s builder/owner, the contractor and relevant technical parties.
However, the concept of “structure owner” for fine purposes does not simply mean whoever happens to hold title when the municipality conducts its inspection.
This is particularly important for foreign factory purchasers.
Danıştay has emphasized the constitutional principle that penalties are personal. For Article 42 purposes, the person responsible for actually carrying out the unauthorized construction must be identified; the person who owns the real estate and the person legally responsible for constructing the unauthorized structure are not necessarily the same.
Therefore, a foreign investor who acquired a completed factory after unauthorized additions were constructed should immediately investigate when and by whom those additions were made.
Preserve the official title-transfer date.
Then determine when the disputed additions existed.
Useful evidence may include:
historic municipal inspection records,
older architectural plans,
dated photographs,
satellite or aerial records where appropriate,
previous lease documents,
seller records,
utility documentation,
valuation reports,
insurance surveys,
factory inventories, and
technical reports prepared before acquisition.
If the addition demonstrably existed before the investor acquired the factory, this may be highly important in contesting personal fine liability.
Suppose a bank valuation prepared six months before the foreign investor’s acquisition already describes the disputed warehouse.
That can help demonstrate that the addition predated the investor’s ownership.
Similarly, a seller’s marketing brochure showing the complete factory before the acquisition may unexpectedly become important evidence.
Preserve these materials.
The fine should be challenged on its specific factual and legal basis where appropriate.
Danıştay case law demonstrates that the administration must determine who was actually responsible for the unauthorized construction rather than mechanically imposing the entire fine on a person merely because they currently occupy or own the property.
The investor should therefore demand the documents showing how the municipality identified the responsible person.
The situation changes significantly.
Suppose the investor buys a factory containing an old unauthorized warehouse but later constructs another extension without obtaining the required approval.
The investor may potentially face personal responsibility for the new construction.
The historical violations and post-acquisition violations should therefore be separated carefully.
For every disputed structure, prepare a table identifying:
structure or addition,
approximate construction date,
person who commissioned it,
ownership at that time,
permit status,
approved project status,
current use, and
municipal enforcement history.
This chronology can become central to both fine and seller-liability disputes.
Preserve evidence connecting the seller with the construction.
The foreign investor may have separate private-law claims where the seller:
constructed unauthorized additions,
represented them as permitted,
concealed municipal enforcement proceedings, or
sold the factory at a value calculated using illegal floor area.
The administrative planning problem and the buyer-seller dispute should be pursued as separate legal tracks.
This is also possible.
An industrial tenant may have expanded storage, production or office areas without the owner’s proper authorization.
Danıştay jurisprudence confirms that Article 42 fine liability must focus on the person actually responsible for the unauthorized construction and that a tenant or another third party may, depending on the facts, be the relevant person rather than the landowner.
The lease history should therefore be reviewed carefully.
A factory may have been occupied by several industrial operators.
Review provisions concerning:
construction,
alterations,
fit-out,
landlord approval,
permits,
restoration, and
tenant liability.
A former tenant may have created the violation that the foreign investor later inherited physically with the property.
Potentially, but not automatically.
The first question is whether the current zoning and planning rules allow the disputed construction.
The technical team should examine:
permitted industrial use,
floor area ratio,
site coverage,
building height,
setbacks,
fire access,
parking,
parcel boundaries,
road setbacks,
structural requirements, and
other applicable conditions.
If the addition can comply with the current planning regime, a permit or project-revision strategy may be possible.
Where construction is stopped under Article 32, the statutory procedure allows the owner, within the relevant period, to bring the structure into conformity or obtain the necessary permit where legally possible and request removal of the seal. Danıştay’s application of Article 32 continues to recognize this mechanism.
But this should not be misunderstood as an unconditional right to legalize every structure.
Legalization may be substantially more difficult.
For example, if the parcel’s lawful development capacity has already been fully used, an additional 3,000-square-meter warehouse may not simply be capable of receiving a retrospective permit.
The investor may need to evaluate:
partial demolition,
project redesign,
removal of other construction,
planning options, or
another compliance strategy.
A warehouse constructed inside a mandatory setback may present a different problem from an internal mezzanine.
The technical and planning team should determine whether the violation can legally be corrected through a project amendment.
Do not assume that payment of a fine permits the unlawful structure to remain.
This is a critical point.
Administrative monetary sanctions and planning compliance are separate.
An investor cannot safely conclude:
“We paid the municipal fine, so the warehouse is now legal.”
If the structure remains contrary to planning legislation and cannot be lawfully permitted, demolition risk may continue.
Article 32 provides a process under which, if the structure is not brought into conformity or the necessary permit cannot be obtained, the building permit may be cancelled and unauthorized or permit-inconsistent construction may become subject to demolition by the competent administration.
For a factory, demolition may have consequences far beyond the value of the physical structure.
If the unauthorized addition contains:
production lines,
machinery,
cold storage,
raw materials,
electrical systems,
loading equipment, or
essential warehouse capacity,
demolition can affect the entire industrial operation.
The investor should therefore prepare an operational contingency plan alongside the legal strategy.
Suppose the foreign investor discovers that the newly purchased production hall is unauthorized but nevertheless installs expensive manufacturing equipment inside it.
If demolition later becomes unavoidable, relocation costs and production disruption may increase dramatically.
Planning compliance should be resolved before major additional capital expenditure is committed to the disputed area.
The enforcement analysis should identify the affected area precisely.
The investor should distinguish:
the lawful original factory,
later lawful extensions,
disputed unauthorized extensions, and
any construction capable of correction.
Do not automatically assume the entire factory must be demolished because one section is unlawful.
Where the municipality prepares an Article 32 record, examine whether it clearly identifies:
the unauthorized structure,
its location,
dimensions,
affected construction area,
permit inconsistency, and
current physical condition.
Vague or technically inadequate findings can become important in administrative litigation.
Accurate measurement is particularly important in large industrial properties.
An incorrect determination of the affected area can influence:
demolition scope,
fine calculation,
legalization strategy, and
project valuation.
Commission independent measurements immediately.
Industrial structures often involve large floor areas.
Article 42 calculates certain fines according to the area affected by the planning violation and the applicable building class or group, while statutory increases may also apply depending on the circumstances.
A large factory addition can therefore generate a significant financial sanction.
Current Article 42 also contains an additional fine mechanism based on the affected area and the minimum property-tax square-meter land value. Where the statutory conditions are met, that amount can be added to other Article 42 penalties.
This can substantially increase exposure for industrial properties located on valuable land.
Article 42 provides that, for the additional amount imposed under the relevant provision, if the violation is remedied and the structure is brought into compliance within one month after notification of the fine, that additional component is not collected.
This creates a strong reason to assess legal and technical correction options immediately.
The statutory rule concerning timely correction applies specifically to the relevant additional fine component.
The investor should not assume that every Article 42 penalty disappears merely because the violation is later corrected.
Each component of the municipal calculation should be reviewed separately.
For a major factory, check:
affected square meters,
building class,
calculation date,
applicable unit amount,
statutory increases,
land value used,
identity of the responsible person, and
whether multiple violations were calculated correctly.
A mathematical or classification error can significantly alter the amount.
Danıştay has reiterated that administrative penalties are subject to the constitutional principle of personal responsibility.
Where several parties may have been involved, the administration should determine responsibility rather than simply attributing every historical violation to the current owner.
This is particularly important in factories that have changed owners, operators and tenants several times.
The legal entity that owns or operates the factory and the individuals acting for that company should not automatically be treated as interchangeable.
Danıştay has also addressed situations involving construction carried out for a corporate entity and emphasized the need to impose administrative liability on the legally appropriate person or entity rather than automatically penalizing a company shareholder personally.
The investor should therefore check exactly in whose name each fine has been issued.
A foreign investor may acquire:
the factory real estate directly, or
shares in the company owning the factory.
These structures can create different commercial and liability considerations.
In a share acquisition, the investor acquires the company that may already have administrative disputes, fines, litigation and historical compliance problems.
Therefore, corporate due diligence should examine existing municipal liabilities in addition to the physical property.
Request and verify information concerning:
construction stop records,
administrative fines,
demolition decisions,
permit cancellations,
pending legalization applications,
administrative lawsuits, and
municipal correspondence.
Do not rely solely on a seller statement that “there are no problems with the municipality.”
Under the current Article 32 framework, information concerning planning violations is notified to the land registry for annotation in the declarations section, and the annotation cannot be removed until the administration reports that the violation has been corrected.
The land-registry record should therefore be reviewed carefully before acquisition.
Even if no planning-violation annotation appears, the investor should still compare the existing buildings with the municipal archive.
A physical violation may exist before a formal inspection or annotation occurs.
This can fundamentally change the transaction.
A seller may be trying to dispose of the factory after receiving a demolition decision.
The foreign investor should determine:
decision date,
scope,
notification history,
whether litigation was filed,
whether suspension of execution exists, and
whether the decision remains enforceable.
Never acquire the property assuming the municipality will simply forget the decision after ownership changes.
A change of ownership does not itself make the underlying physical planning violation disappear.
The new owner may therefore acquire property whose unauthorized additions remain exposed to enforcement.
This is why demolition risk must be priced before closing.
That is not sufficient.
Long-term municipal silence should not automatically be treated as proof of legality.
The correct question is whether the structure is supported by valid planning and construction documentation.
Electricity, water, gas or industrial utility connections do not necessarily establish that every part of the factory has a valid building permit.
Likewise, tax records, insurance policies or business licences should not automatically be treated as construction authorization.
A factory may have business or industrial operating documentation while part of its physical structure remains inconsistent with planning requirements.
The investor should therefore review both:
operational regulatory compliance, and
real estate/construction compliance.
An unauthorized factory extension may affect:
fire escape routes,
fire-brigade access,
structural safety,
ventilation,
hazardous-material storage, or
worker safety.
This can create regulatory exposure beyond ordinary zoning enforcement.
Technical safety review should therefore accompany planning analysis.
If an unauthorized addition contains new production capacity, storage or industrial processes, the investor should determine whether the change affects existing environmental approvals.
Planning compliance and environmental compliance should not be examined in isolation.
Preserve the contract.
The purchase agreement may contain representations such as:
all buildings have valid permits,
there are no unauthorized additions,
no demolition proceedings exist,
no municipal fines are pending, or
the factory complies with planning legislation.
If those statements are inaccurate, contractual remedies may become extremely important.
Even if the municipality is legally entitled to require removal of the unauthorized warehouse, the foreign buyer may still have a claim against the seller if the problem was concealed or contractual warranties were breached.
These are separate questions.
Save:
due-diligence responses,
data-room documents,
emails,
WhatsApp messages,
broker communications,
technical reports,
advertisements, and
management presentations.
They may show exactly what the investor was told about the factory’s legal construction area.
That is much more serious than a seller simply being unaware of a historical technical discrepancy.
Obtain evidence showing:
when the seller received the order,
whether the seller challenged it,
whether it was disclosed,
and
whether the sale price included the disputed area.
Potential private-law remedies should be evaluated promptly.
A broker may have advertised the factory as:
“fully licensed,”
“15,000 square meters legal closed area,”
“no zoning problems,” or
“all additions approved.”
Preserve the advertisement and communications.
If those statements materially influenced the investment, they may require separate analysis.
That depends on the purchase agreement, nature and significance of the problem, representations made, applicable private-law rules and the remedy sought.
A small correctable discrepancy is very different from discovering that 40% of the factory is unauthorized and subject to demolition.
The investor should avoid making an immediate termination declaration before the technical and legal position is established.
Potentially, depending on the legal basis and transaction documents.
For some investors, keeping the factory and seeking compensation or a price adjustment may be commercially preferable to unwinding the transaction.
The financial impact should therefore be quantified.
The valuation expert can compare:
purchase price,
value of legally permitted factory area,
value if the disputed addition must be demolished,
cost of legalization where possible,
cost of demolition,
production disruption, and
effect on rental or operational value.
This can help quantify the transaction dispute.
A lender may have valued the factory based on total physical floor area.
If a substantial part is unauthorized, the collateral value may decrease.
The investor should review:
loan representations,
valuation assumptions,
covenants,
insurance requirements, and
notification obligations.
Unauthorized construction can create insurance complications, particularly where the disputed area contains valuable machinery, inventory or production equipment.
The investor should verify whether the insurer was informed of the actual configuration and whether planning non-compliance affects any relevant policy terms.
Potentially, yes.
A demolition decision is an administrative act and may be challenged before the competent administrative court where legal grounds exist.
Possible issues can include:
incorrect identification of the unauthorized structure,
inadequate technical findings,
wrong measurements,
structure actually covered by a permit,
correction already completed,
incorrect application of Article 32, or
other procedural and substantive defects.
The precise grounds depend on the file.
If demolition threatens an operating factory, the consequences may be extremely difficult to reverse.
Where statutory conditions are satisfied, a request for suspension of execution may therefore become strategically important in administrative litigation.
The request should be supported by both legal and technical evidence.
Legal review should begin when the investor first discovers:
a construction stop record,
fine,
permit problem, or
demolition decision.
Waiting until physical enforcement begins can significantly reduce strategic options.
The factory dispute may contain several decisions:
construction stop record,
sealing,
administrative fine,
permit cancellation,
demolition order, and
refusal of legalization.
Each may require separate analysis and may have its own procedural deadline.
Record:
inspection date,
stop-record date,
fine date,
fine notification,
correction period,
permit application,
permit refusal,
demolition decision,
notification dates, and
any court proceedings.
This prevents procedural confusion.
The problem should still be handled immediately.
Subject to applicable formalities, legal representation can generally be arranged through an appropriate power of attorney.
The investor should not wait to return personally before addressing an administrative deadline.
A foreign investor discovering unauthorized additions after purchasing a factory should immediately divide the case into four separate questions: physical legality, demolition exposure, personal fine liability and seller responsibility.
First, determine the actual planning problem. The complete municipal archive should be compared with the existing factory by qualified technical professionals. Every warehouse, mezzanine, office block, production extension and auxiliary structure should be classified as permitted, disputed, correctable or potentially incapable of legalization.
Second, evaluate Article 32 exposure. Under the current statutory framework, unauthorized or permit-inconsistent construction may be recorded, sealed and stopped, and the planning violation is reported to the land registry for annotation. Where the structure cannot be brought into compliance or lawfully permitted, demolition proceedings may follow.
Third, do not assume that purchasing the factory automatically makes the foreign investor personally responsible for every historical administrative fine. Article 42 fines are subject to the principle of personal responsibility. Danıştay jurisprudence emphasizes that the person who actually carried out the unauthorized construction must be identified and that this person is not necessarily the current property owner. The investor should therefore establish whether the disputed addition existed before the acquisition and preserve objective evidence of its age.
Fourth, investigate the transaction itself. If the seller represented the entire factory as lawfully permitted, concealed existing enforcement proceedings or failed to disclose a demolition decision, contractual and other private-law remedies may need to be considered separately.
The most serious mistake is to assume that because the investor did not build the unauthorized addition, nothing needs to be done. The investor may have strong arguments against personal fine liability while the physical structure itself remains exposed to correction or demolition.
Lawyer Fırat Fesih Kaya can examine the factory’s permits, approved projects, construction chronology, municipal enforcement documents, administrative fine calculation and purchase agreement to determine which additions can remain, whether demolition can be challenged, whether the investor can lawfully be fined and which claims may exist against the seller or other responsible parties.
Potentially, yes. Change of ownership does not automatically legalize an unauthorized structure. The planning status of the physical addition and personal liability for a fine are separate questions.
Not automatically. Danıştay jurisprudence emphasizes personal responsibility for Article 42 administrative fines and requires identification of the person responsible for the unauthorized construction. The current landowner and the person who constructed the violation are not necessarily the same.
Use the title-transfer date together with historic photographs, valuation reports, municipal records, seller documents, previous leases, technical reports and other reliable evidence showing the physical structure before acquisition.
Potentially, if current planning and construction rules permit it. The applicable floor area, site coverage, setbacks, height, use, safety requirements and other development conditions must be checked first.
No. Payment of an Article 42 fine does not itself transform unauthorized construction into lawful construction. Planning compliance and monetary sanctions are separate issues.
If the evidence establishes that the seller was the person responsible for constructing the unauthorized addition, that can be highly relevant under the personal-responsibility principles applied to Article 42 sanctions.
The administration should investigate who actually carried out the construction. Danıştay jurisprudence recognizes that the person responsible for the unlawful construction may be a tenant or another third party rather than the current landowner.
Potentially. The purchase agreement, due-diligence responses, advertisements and communications should be examined to determine whether the seller made inaccurate representations or concealed material planning problems.
Potentially. Incorrect measurements, inadequate technical findings, existing permits, correction of the violation and procedural or substantive errors can all require examination. Administrative litigation deadlines should be calculated immediately.
Stop any new construction in the disputed areas, obtain the complete municipal permit file, commission a technical comparison of the existing factory against approved projects, determine when each addition was constructed, preserve evidence proving whether it predates your acquisition, check for existing fines and demolition decisions, review the purchase agreement and quantify the financial impact before committing additional capital to the affected areas.
Unauthorized factory additions can create risks far beyond a simple building-permit problem. A foreign investor may face sealing, demolition proceedings, administrative fines, land-registry annotations, reduced collateral value, interruption of production and claims arising from inaccurate seller representations.
Fırat Fesih Kaya Law Office assists foreign investors with factory and industrial-property due diligence, unauthorized construction disputes, demolition decisions, Article 32 enforcement, Article 42 administrative fines, permit regularization, administrative litigation and claims against sellers arising from undisclosed construction violations. Lawyer Fırat Fesih Kaya can examine the factory’s building permits, approved projects, historical construction records, municipal decisions and acquisition documents to determine whether the unauthorized additions can be retained, whether the investor is personally responsible for fines and which legal remedies can protect the investment.
Phone: +90 312 434 22 22
WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr