Acquisition Of Title and Ownership Rights in Turkey
Turkish law recognises lands, independent and permanent rights (such as usufruct rights) perfected into the land registry records and independent units registered under the Condominium Law as real property. An individual or a legal entity may own property in
the form of full ownership, co-ownership or joint ownership. The ownership may be in the nature of a freehold or easement right.
Simple ownership is the most common type of ownership, followed by co-ownership and joint ownership. Co-ownership and joint ownership difer on the disposal of the share owned; a co-owner may not dispose of its share without the consent of the other coowners unless otherwise agreed, whereas each joint owner can freely dispose of its share without the consent of the other joint owners.
Freehold vests in the owner full legal and beneicial ownership of the property. It is the most extensive right over real estate under Turkish law granting the right to freely use (usus), enjoy the beneits (fructus) and dispose of the property (abusus). On the contrary, easement
rights are limited in rem. Usufruct rights grant the beneiciary the right to freely use and enjoy the beneits of the property, but the beneiciary cannot dispose of the property.
Title to Immovable Property
Registration system
The land registry records are kept in an electronic centralised system known as the Turkish Land Registry and Cadastre Information System (TAKBIS) and in physical title books maintained by the relevant land registry directorate. Each land registry directorate is
under the supervision of regional land registry group directorates which in return are under the control of the national General Directorate of Land Registry and Cadastre.
Parties to an asset transaction shall inalise the sale and transfer of ownership by executing and registering an agreed form of oicial deed before the relevant land registry directorate. Registration is mandatory in order to be recognised as the titleholder and enforce
ownership rights. The execution of an oicial deed and registration thereof may not be necessary where a real property is inherited or acquired by a court order, or through adverse possession, or via execution proceedings.
Due to the public nature of TAKBIS, any holder of a particular right registered therewith will have protection against third party claims, including against bona ide purchasers. Therefore, a third party may rely on the content of the land register as any establishment or transfer of a right made by a person registered in the land register as the right holder will be upheld.
Acquisition by individuals (i.e. real persons)
(i). Acquisition by Turkish individuals: There is no restriction on Turkish individuals acquiring real property in Turkey.
(ii). Acquisition by non-Turkish individuals: Until 2012, non-Turkish individuals were allowed to acquire real property in Turkey only if their country of citizenship were allowing, either under an international treaty or de facto, Turkish citizens to acquire real
property (i.e. on the basis of the reciprocity principle). However, following a change in the legislation, the reciprocity principle was abolished and now citizens of those countries listed by the President may acquire real property and rights in rem in Turkey, subject to certain restrictions as explained below. Such list is quite extensive, covering almost every developed country in the world.
In terms of restrictions, the President has the discretion to restrict their acquisition of real property for reasons including, among others, citizenship and location and/or because the total area that is being acquired exceeds certain limits. As a general practice, acquisition of real property by non-Turkish nationals in or nearby military zones and other security zones is not allowed. Furthermore, where a non-Turkish national has acquired an undeveloped real property, it must submit a development project within 2 years from the acquisition to the Ministry of Environment and Urbanisation and complete such development within the timeframe to be determined by such Ministry.
There are also some restrictions speciic to the total area which individual non-Turkish nationals may acquire as follows: (a) the total area that may be acquired by foreign individuals and the total area of the rights in rem owned by the foreign individuals in a single district cannot exceed 10% of the total area of such district subject to private property (i.e. lands owned by individuals and/or legal entities and not the State) ; and (b) country-wide, a foreign individual cannot own more than 30 hectares of land. Prior to 2012, this limit was 2.5 hectares. The President is entitled to double such 30-hectare limit.
Acquisition of real property by a non-Turkish individual may also entitle such individual to claim Turkish citizenship provided that conditions listed in section 4.5.5 (b) above are met.
Acquisition by legal entities
Acquisitions by legal entities of real property in Turkey can be classiied into three sub-categories:
(i) acquisition by Turkish legal
entities with full local shareholding, and
(ii) acquisition by Turkish legal entities with foreign shareholding, and
(iii) acquisition by nonTurkish legal entities
(i). Acquisition by Turkish legal entities with full local shareholding: There is no restriction preventing Turkish legal entities with full local
shareholding from acquiring the ownership of real property in Turkey.
As noted under 2.1 (Domestic Legislation on Foreign Investment), an investor is required to notify the Ministry of Treasury
and Finance. If, as a result of a share transfer or otherwise, a foreign shareholder acquires 50% or more of the shares, or the
privilege to appoint or dismiss the majority of the members of the board of directors of a Turkish company with full local shareholding, the Ministry of Treasury and Finance will inform the General Directorate of Land Registry and Cadastre of such change, and subsequently such directorate will advise the
relevant governorship to evaluate whether the Turkish entity (now with foreign shareholding) can own real property in Turkey. If real property is located in or nearby military zones and other security zones, the relevant governorship may notify the company to provide additional documentation and may
eventually require the company to sell such real property.
Acquisition by Turkish legal entities with foreign shareholding: The acquisition by Turkish legal entities with foreign shareholding of
real property in Turkey shall require prior written consent of the relevant governorship where the real property is located, if the
foreign shareholders own 50% or more of the shares, or have the privilege to appoint or dismiss the majority of the members of
the board of directors of such company. If the foreign shareholder owns less than 50% of the shares or have no such privilege, no
prior written consent of the relevant governorship shall be sought.
Also, Turkish legal entities with foreign shareholding are not required to obtain the relevant governorship’s prior written
consent to (i) perfect mortgages in their favour, (ii) acquire real property through foreclosure, (iii) acquire real property
in industrial zones, technological development zones and free trade zones, and (iv) acquire/transfer the title or easement right
on an immovable property, as a result of a merger or demerger.
Acquisition by non-Turkish legal entities: The acquisition of real property by non-Turkish legal entities is allowed only if the
purpose of such acquisition relates to petroleum exploration and extraction, touristic developments, or in industrial zones.
Identical with non-Turkish individuals, a foreign company must submit development project within 2 years from the acquisition
to the Ministry of Environment and Urbanisation and complete such development within the timeframe to be determined by such Ministry.
There is a speciic restriction on foundations, associations and similar entities to acquire real property in Turkey. However,
foreign legal entities may freely establish a mortgage over real property located in Turkey.
Title to Movable Property
There are two ways of acquiring the title to a movable property:
(i) acquisition by way of taking the possession of an unclaimed movable property, or
(ii) acquisition by way of transfer of title.
The general rule under Turkish law is that the title to a movable property shall be transferred by transfer of possession of the property. Under this general rule, in order for the title of the movable property to be transferred, parties must be in mutual agreement regarding transfer of possession, the transferor must be entitled to transfer the property, and the transferee must take the possession with the intention of being the owner of the movable property. One exception to this rule is where the parties speciically agree that the title of a movable property passes to the transferee, but the movable property remains in the possession of the transferor.
Furthermore, according to the bona ide rule set forth under the Turkish Civil Code, in case the transferor is not entitled to transfer the title of the property and it is impossible for the transferee to have access to such information, title of the movable property is
deemed to have passed to the transferee. However, if the transferee could obtain such information by acting with due care, the bona ide rule does not apply.