The Treasury has published the general conditions of building completion insurance, which is expected to be long-lasting. From March 11, all model house sales will be covered by mandatory insurance.
The necessity of insurance for the sale of prepaid housing, also known as model house sales between HALK, officially started last week with the publication of the insurance general conditions of the Undersecretariat of Treasury.
When thousands of people were victimized by construction companies that went bankrupt in the past years, the new Consumer Law, which was introduced at the end of 2013, included mandatory insurance under the name of building completion insurance for prepaid home sales. In May 2014, the Ministry of Customs and Trade expected that the Treasury would determine the general conditions for the application of the insurance, despite the details of building completion insurance. Last week the Treasury issued the general conditions of the insurer and thus the building completion insurance, which will close the period in the residence, officially started.
From now on, all model house sales will be covered by insurance from March 11th. Construction companies will make building completion insurance for projects that are housing 30 before they start selling their homes; the construction company will pay premiums on the insurance. According to the conditions set by the Treasury, insurance companies will issue policies for prepaid housing sales project and will provide insurance coverage for the subject of prepaid sales.
If the construction company is insolvent within the construction period or if it is still unable to deliver the residence after 12 months from the contract, the insurer will be insured. The insurance company will pay the total interest of the consumer, including the down payment and installments paid by the consumer for that house, together with the legal interest.
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The insurance companies will organize the policy by examining the financial structure of the construction company to be insured, past experiences in detail. The insurer sees the construction company as risky, will not insure or ask for additional collateral if he decides he can not finish the project. Similarly, if during the construction period the company does not fulfill its responsibilities towards the insurer, if it engages in attempts to distort its financial structure; the insurance company will conclude the contract and inform it to the Ministry. Thus, in order for riski to go down the most and to prevent the consumer from becoming a victim, the insurance companies will be in charge of supervising the construction within the period from the beginning to the end.
The insurance premiums will be determined freely by the insurance companies, according to the number of residential buildings, the duration of the project and the cost.
According to the general conditions of the building completion insurance explained by TREASURE, the insurance companies will be required to complete the construction they insured and to undertake the task of delivering housing to the consumers. Accordingly, if the construction company fails or can not deliver the residence, the insurance company will either compensate the consumer or take over the construction and settle the contract with another contractor, complete the housing and deliver it to the consumer. In this case, the new delivery date of the houses will not exceed 24 months.