The collapse of a building or the use of unauthorized materials during construction can result in devastating human and economic consequences. These failures often expose not only contractors and engineers but also real estate company managers to civil and criminal liability. In Turkey, as in many other jurisdictions, real estate company managers are no longer protected merely by the corporate veil, especially when gross negligence, intentional misconduct, or violation of public safety laws is involved.
This article explores the civil (tort) and criminal liabilities of real estate company managers in cases involving structural collapse, unauthorized construction, or the use of substandard materials. It discusses relevant Turkish legislation, judicial precedents, and practical risk management advice for company executives in the real estate and construction sector.
1. Legal Duties of Real Estate Company Managers in Construction
1.1 Managerial Duty of Care
Under Turkish Commercial Code No. 6102 (TCC), managers (whether board members or company directors) owe a fiduciary duty to act in the best interest of the company and to avoid unlawful conduct. In construction-related businesses, this duty includes:
- Ensuring that construction complies with zoning and building permits,
- Selecting licensed contractors and certified engineers,
- Avoiding cost-cutting measures that endanger human life or public safety.
1.2 Duty to Comply with Public Regulations
Real estate company managers must also comply with the Zoning Law (İmar Kanunu No. 3194), Building Inspection Law (4708), and Turkish Criminal Code (TCK) provisions regarding public safety and unauthorized construction. Failure to do so may lead to personal liability if harm arises.
2. Civil (Tort) Liability for Construction Failures
2.1 Liability under Turkish Code of Obligations (TCO)
According to Article 49 of the Turkish Code of Obligations (No. 6098), any person who causes damage to another by unlawful and culpable behavior is obliged to compensate that damage. In the context of construction:
- If a building collapses due to structural defects,
- If unauthorized materials cause long-term damage,
- If there is illegal alteration to a building’s structure,
then company managers may be personally liable if their negligence or omission contributed to the harm.
2.2 Piercing the Corporate Veil
Although companies have separate legal personality, Turkish courts may pierce the corporate veil in extreme cases, especially when the manager’s personal fault (gross negligence or intentional wrongdoing) is evident.
Example: A manager who knowingly authorized the use of cheap, uncertified concrete in a residential high-rise that later collapses, may be held personally liable for deaths or injuries under both tort law and criminal law.
3. Criminal Liability in Construction Failures
3.1 Provisions under the Turkish Criminal Code (TCK)
Several TCK provisions apply to real estate company managers:
- TCK Article 85: Causing death by negligence
- TCK Article 89: Causing injury by negligence
- TCK Article 204: Forgery of official documents (e.g., fake permits)
- TCK Article 184: Unauthorized construction and violation of building codes
Managers who act recklessly, fail to obtain permits, or falsify documents to mislead municipalities or clients can be criminally prosecuted.
3.2 Real-life Application: Earthquake and Building Collapses
After major earthquakes (e.g., Elazığ 2020, İzmir 2020, Kahramanmaraş 2023), Turkish prosecutors launched mass criminal investigations against:
- Building contractors,
- Technical supervisors,
- Engineers, and
- Company managers who authorized unsafe designs or illegal construction techniques.
3.3 Criminal Investigations and Prosecution
Public prosecutors often act ex officio if a building collapses or life-threatening risks emerge. Expert reports (technical analyses) are crucial in determining:
- Whether the collapse was due to natural causes or design/construction flaws,
- Whether management failed in its oversight duty,
- Whether substandard materials were knowingly used.
If a manager is found to have ignored inspection warnings, approved unlicensed designs, or pushed for illegal cost-cutting, indictments for involuntary manslaughter or willful misconduct may follow.
4. Administrative and Disciplinary Sanctions
Even if civil or criminal proceedings are unsuccessful, municipal authorities and chambers of commerce may impose administrative penalties:
- Blacklisting real estate companies from public tenders,
- Canceling operating licenses,
- Fining company managers personally under municipal or professional rules.
5. Insurance and Liability Transfer Issues
5.1 DASK and Building Insurance Limits
In Turkey, the Compulsory Earthquake Insurance (DASK) system covers some post-disaster liabilities, but does not protect managers from criminal or personal tort liability.
5.2 Liability Transfer through Contracts
Managers often attempt to mitigate risk through:
- Indemnity clauses in contractor agreements,
- Delegation of technical duties to engineers,
- Subcontractor liability clauses.
However, Turkish courts examine substance over form: If the manager’s own conduct contributed to the failure, such clauses offer no protection.
6. Yargıtay (Court of Cassation) Precedents
Several decisions by the Turkish Court of Cassation (Yargıtay) reinforce the manager’s liability:
- Yargıtay 4. Ceza Dairesi, 2019/3928 E., 2020/1213 K.
→ Ruled that managers who failed to obtain building permits for villas built on protected zones were liable under TCK 184. - Yargıtay 11. HD, 2021/1867 E., 2021/3594 K.
→ Held company directors jointly liable for damages where the use of poor materials caused large-scale structural damage. - Yargıtay CGK, 2017/10-123 E., 2018/319 K.
→ Clarified that company managers may be criminally liable for omitting supervision duties, even if they do not have engineering backgrounds.
7. Risk Mitigation Strategies for Company Managers
To reduce exposure, real estate managers should:
- Implement internal compliance systems,
- Demand regular third-party audits of building sites,
- Avoid intervening in technical design and permit shortcuts,
- Consult legal counsel before approving unorthodox methods or materials.
Managers should also secure Directors & Officers (D&O) liability insurance, though this does not cover criminal penalties.
Conclusion
In construction failures, real estate company managers cannot hide behind corporate structures. Civil liability under tort law and criminal charges under Turkish Penal Code can both attach to negligent, reckless, or complicit managers.
In an era of heightened legal scrutiny—especially after disaster events—proactive legal compliance, ethical management, and safety-oriented leadership are not just optional; they are essential for risk minimization and long-term sustainability in real estate development.
INTERN LAW FACULTY STUDENT
YAĞMUR YORULMAZ
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