Unofficial Sales Agreements (External Sales Agreements)

In the Republic of Turkey, all records related to immovable properties are maintained by the state. These records include information such as mortgages, liens, easements, the type and area of the property as shown in the title deed records, and details related to the transfer of ownership. To ensure that these records are kept accurately and comprehensively, the state mandates that all transactions concerning property titles must be conducted in an official manner, and the laws have been structured accordingly.

The term “official manner” refers to the transfer of ownership of immovable property taking place in the presence of a title deed officer—or, as of July 4, 2023, before a notary public—or the preparation of a “Sales Commitment Agreement” for immovable properties in the presence of a notary public. It is important to note that the term “official manner,” as defined here, is limited to notaries and land registry offices. A sales agreement witnessed by other parties or prepared in the presence of site management, a village headman, or any other institution or individual does not constitute an officially prepared agreement in the eyes of the law.

The legal provisions that establish this formality are as follows:

• Article 706 of the Turkish Civil Code states: “Contracts aimed at the transfer of immovable property ownership are valid only if they are prepared in an official manner.”
• Article 237 of the Turkish Code of Obligations provides: “For the validity of the sale of immovable property, the contract must be prepared in an official manner. Sales Commitment Agreement, repurchase and pre-purchase agreements related to immovable properties are invalid unless prepared in an official manner. The validity of a preemption agreement depends on it being in written form.”
• Article 26 of the Title Deed Law states: “Official deeds related to the establishment or promise of easement rights on immovable properties for exclusive use, pursuant to Article 753 of the Civil Code, shall be drawn up by the land registry office or officers.”
• Article 60 of the Notary Law specifies: ”…It is the duty of notaries to prepare immovable Sales Commitment Agreement, annotate these agreements in the land registry system upon request by one of the parties and payment of fees, and to prepare immovable sales agreements.”
• Article 61/A of the Notary Law adds: “Immovable sales agreements may also be executed by notaries.”

As can be seen, it is clearly regulated by law that all transactions related to immovable properties must be carried out officially.

What happens if a Sales Agreement is not made in an official manner?

Although it is explicitly stated by law that all transactions concerning immovable properties must be conducted officially, in practice, many sales agreements are prepared informally. This is particularly common in agreements between foreigners who come to our country for investment or settlement purposes and real estate companies, construction firms, and similar entities. Such agreements, not executed in the presence of a notary public or title deed officer, are legally invalid. They do not transfer ownership of any property nor impose any obligations on the parties signing the agreement.

Payments made under an unofficial agreement are not legally justified, leading to the unjust enrichment of the recipient. Amounts obtained through unjust enrichment are considered illicit gains and can be reclaimed through legal means.

How does the process work?

For those wishing to recover payments made under an unofficial sales agreement, the legal process begins with notifying the other party of the claim. If this notification, regardless of its form, yields no positive result, the process continues with a lawsuit filed in the Consumer Court. According to the Consumer Protection Law No. 6502, mediation must be attempted before filing such lawsuits. Claims initiated without resorting to mediation are dismissed for lack of procedural formality.

Once the case is resolved, amounts paid under an unofficial sales agreement are recognized as unjust enrichment, and a decision is made to return these amounts to the payer.

How does the invalidity of the agreement affect the transfer of the title deed?

If the immovable property subject to the unofficial sales agreement is officially transferred in the presence of a title deed officer or notary public, the invalidity of the agreement is no longer an issue. This is because once the property is transferred in compliance with the law, the transaction cannot be considered invalid.

In such cases, if there are claims regarding payments made, the focus shifts from the invalidity of the agreement to examining the property’s characteristics, the purpose of the transfer, and similar essential aspects of the agreement. Legal methods should then be followed to revert the legal relationship between the parties to the state it was in before the agreement was signed.