Page 11 - Turkinsurance Digital Magazine

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The Complementary Element of Safe Housing Transition Is Building Completion
Insurance

Organized by GYODER, the umbrella organization of the real
estate sector, the 2nd Ankara Real Estate Summit was held on
June 17 under the theme “The New Financial Reality of Real
Estate.” The insurance sector was represented at the summit
by Ahmet Yaşar, Vice President of the Insurance Association
of Türkiye (TSB) and Chairman of Maher Holding Insurance
Group. During the summit, a panel titled “Project Real Estate
Investment Funds – Constraints and Solution Proposals:
Taxation, Valuation, Insurance” was held, moderated by
Türkiye Journalists Association President Vahap Munyar.
Speakers included TSB Vice President and Maher Holding
Insurance Group Chairman Ahmet Yaşar, PwC Türkiye Senior
Tax Manager Birim Saran, Lâl Değerleme Chairperson Ebru among consumers and emphasized that building completion
Öz, and GYODER GYF Committee Chair and Executive Board insurance is the most effective tool to restore that trust: “This
Member Berna Sema Yiğit Sevindi.
insurance system protects not only the property owner but also
the contractor. The insurance company monitors the project
In his speech, Ahmet Yaşar began by addressing Türkiye’s from start to finish and supervises all stages of the construction
earthquake reality: “92% of our geography and 95% of our process. We, as insurance companies, take responsibility for
population are at earthquake risk. The most important solution all steps—such as the selection of the contractor, financial
to this problem—the insurance for it—is urban transformation,” adequacy, the technical, financial, and legal infrastructure of the
he said, summarizing the critical role of building completion project, and full oversight of the construction process—because

insurance in this transformation as follows: “The insurance our focus is on the successful completion of the project.”
of urban transformation is, in particular, building completion
insurance. Real estate investment funds will also accelerate “The Final Barrier in the Legislation Must Also Be
this process. They will support both urban transformation and Removed”
the transition to safe housing. What we’ve seen at this event is In his speech, Ahmet Yaşar emphasized that one of the
that a well-structured system is already in place. However, the biggest obstacles to the wider adoption of building completion
complementary element of that system is building completion insurance—and thus to the broader implementation of urban
insurance.”
transformation—is the shortcomings in the current legislation:
“This product, as a financial insurance, fully protects the
“Introduced into Legislation in 2013, First Offered in homebuyer, rightful owner, investor, and even the contractor.
2018, Now Expanding”
However, as insurance companies, we also need to be secured,
and this requires taking a mortgage. Under the current
Ahmet Yaşar also addressed the history of building completion regulation, this process incurs additional taxes and fees. This
insurance in the sector, explaining why the product was not increases costs, creates unfair competition against banks, and
widely adopted in the past and why it has become increasingly limits the usability of the product.
important today: “We went through a housing production
process that began with cooperatives and later evolved into Another critical issue relates to the Capital Markets Board
off-plan sales. During this process, many people suffered (CMB) Communiqué regarding Project Real Estate Investment
significant grievances. In 2013, building completion insurance Funds (PYGF). According to the current regulation, fund
was introduced into our legislation for the first time, but at assets cannot be pledged or used as collateral except in cases
that time, there was not enough supply. By 2018, as urban of loans or financing transactions. This makes it difficult to
transformation-focused projects began to spread, we took effectively implement building completion insurance in a
the first step in this field with Quick Sigorta. Today, we have project. To resolve this issue, a clear exception must be added
reached a point where it is clear just how important this product to the Communiqué: ‘Fund assets may be pledged and used
is for reaching safe housing.”
as collateral for the purpose of obtaining building completion
insurance.’ If this regulation is enacted, insurance companies’
“We Want to Reach Safe Housing with Confidence”
willingness and capacity to provide guarantees for projects will
increase, and investor protection will become tangible. If these
Yaşar noted that the issues experienced particularly during two barriers are removed, it will pave the way forward for both
the off-plan sales process have created a serious trust problem
sectors.”