A housing bond (BTS) guarantees the consumer’s payments made to the developer under the pre-sale residential unit sale contract. The bond is issued by the insurance company (the Surety) after they have underwritten the developer requesting the bond (the Principal). Underwriting involves scrutinizing a company’s financial and operational wherewithal to determine whether or not they are able to meet their obligation. The bond is then issued to the consumer (the Obligee) to whom the residential unit has been sold. With this bond, the Surety is now a guarantor of the Developer.
Turkey’s first Housing bond was issued under the consultancy of Rosenberg and Parker of Turkey on 29th of December, 2017, after years of preparation upon its commencement in clause 42 of the New Consumer Protection Law numbered 6502 issued by Turkey’s Customs and Trade Ministry and has been in effect since May 2014.