COMPLETION GUARANTEE LETTER IN REAL ESTATE PROJECTS

 

SCOPE, DURATION, PROCESS

 

The Completion Guarantee Letter is issued based on the total current sales and/or construction price for the entire construction period of the project. It guarantees the parties named as beneficiaries in the letter that the project will be completed on time and in full. The fee is calculated on a project-by-project basis, not annually, and a single fee is charged for the entire project period. Payment terms are determined by mutual agreement between the parties. Payments are made to the bank or insurance company that issued the guarantee.

The Completion Guarantee Letter specifies:

Beneficiaries: The home buyer, beneficiary, landowner, housing finance institutions, funds, and investors.

Price: The total current sales price.

Duration: The period within which the project's construction will be completed.

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ADVANTAGES

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• The guarantee request of each party with a right or interest in the project is met simultaneously and to the same extent. Updating and tracking the guarantee price becomes easier.

• Completion guarantee letter can be offered to public authorities requiring guarantees. A single guarantee covering all parties is also easy for the public to track.

• Securing the entire project at a fixed price until completion, without affecting bank limits, provides significant benefits to the housing company. It eliminates price and scope discrepancies that may arise between separate guarantees required for each party, and a strong guarantee attracts investors to the project and accelerates sales.

• It can be used as collateral by financial institutions and banks to provide "address-based loans" to beneficiaries who are unable to pay their contribution to urban transformation.

• By securing a completion guarantee for projects where they provide housing loans, banks can expand their credit limits by relieving themselves of liabilities arising from the underlying loan.

• Because the completion guarantee is not a loan transaction, it does not appear as a loan on the housing company's balance sheet and does not burden its balance sheet.

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TITLE GUARANTEE IN LAND SALES ​

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SCOPE, DURATION, PROCESS

 

The title guarantee agreement is based on the total current sales price of the land sold. A project limit is allocated to the seller company, and each buyer is enrolled within the limit based on their payments. All payments made by buyers enrolled in the title guarantee are secured until they receive their title deeds.​