Turkish conveyancing procedure
As in most foreign countries, the conveyancing procedure in Turkey is relatively straight-forward if you know what you are doing but this takes years of experience and unfortunately, is an ever changing environment. Buyers should be aware that there are multiple potential pitfalls and many of these are what are publicised and give bad press'.
Any buyer of Turkish property (whether they be Turkish or foreign) should use a licenced and EXPERIENCED real estate agent as well as the appropriate legal representation at all stages, thus ensuring the buyer's interests are upheld and all contracts and transactions are legal and binding within the Turkish legal system.
Foreigners may purchase freehold land and property in Turkey, in their own names, provided that:
1-) Their country has the right to buy Turkish property and land. Since the summer of 2012, there are 183 countries with this right, including European countries; Arabic Countries, Asian, African and Oceanic Countries. If you are not sure of your country's right to buy, please email us with your nationality and we will confirm whether or not you have the right to buy Turkish property and land, according to your nationality.
2-) Military clearance is granted ie it is found that the property is outside Military or Restriced Zones and the applicant does not have any criminal record or have a background of working in intelligence, or a record for spying.
When a buyer has decided to purchase land or property within Turkey it is strongly advised that they appoint an independent solicitor. If the buyer is able to return to Turkey to complete their purchase, at key stages then a Power of Attorney (POA) to act on their behalf is not required, but if a buyer prefers for elements of the purchase to be conducted in their absence, saving them the time and cost of travelling, then a POA may be appointed. Under normal circumstances the buyer's solicitor will act as POA although other parties can be appointed, at the buyer's preference.
Once appointed by an authorised Public Notary, the POA will then be legally entitled to act on the buyer's behalf to BUY one property in the buyer's name. If required the POA can be empowered with legal powers for property utilities or anything deemed necessary, by the client, to act on the their behalf.
In Turkey, a licenced estate agent is also a qualified conveyancer BUT DSP still recommends that the buyer appoints a solicitor so that they have an independent party to act on their behalf although DSP will also be advocating for the client; it is re-assuring for buyers to know that they have two parties working on their behalf.
The buyer's estate agency, solicitor /POA will work together to undertake the following:
1. Perform searches at the Title Deed Registry Office to confirm that the deeds are clear of debts; confirm the legal ownership and ensure that there are no discrepancies over the title deeds.
2.Qualify any outstanding debts to be settled at the Tax Office (for the seller).
3. Preparation of Sales Contract in Turkish and English, between buyer and seller.
4. Apply for Military clearance
5. A hypothec (lien / charge on the deeds) is an optional service that the solicitor can perform to give complete peace of mind on ownership before the deeds are transferred.
6. Inform buyer of the return of the Military clearance
7. Co-ordinate the transfer of the Title Deed (TAPU)
8. Arrange compulsory earthquake insurance
9. Liaise with seller and authorities to arrange utility connection and registration in buyer's name.
10. Register the property for Council Tax (free for the first year on a new property).
The disbursements which the buyer may be required to pay depend upon the level of service requested and the local municipality of the area in which the property is located but a rough guide is as follows :
Solicitor fees:£350 - £1200
Military Clearance fee: 1000 TL 4,500 TL (what a difference!)
Legal Translator fee: £40 per document when not included in the service fee
Notary Stamp fee: £40 per document
Real estate agency commission 3% of the property purchase price
Water and Electric connection: 400TL 750 TL each
Deeds office admin fees 180 TL 250 TL
Deeds runner 200 TL 400 TL
Title deeds transfer tax 4.0% payable at the Title Deed Registry Office on transfer of Title Deeds (TAPU).
Earthquake insurance 100TL 300TL dependent upon house size.
The above disbursements are paid over the course of the buying process. As a rule of thumb, buying costs are cheapest in Didim and most expensive in a few municipalities on the Bodrum peninsula.
All buyers with Didim Sun Properties are provided with a full breakdown of costs at the time of purchase, or just before so there will be no nasty surprises.
The Buying Process
1-) A non-refundable, negotiable, reservation fee can be paid by the buyer to take the property out of the market for up to 28 days.
2-) A Private Purchase Contract is drawn up between the buyer and seller. The contract should contain all details and conditions related to the purchase and terms and conditions of payment, together with buyer's and seller's responsibilities. The buyer will be required to pay a deposit in an agreed time to activate the contract.
3-) Once the contract is signed by all parties and activated the property is considered as sold'. This protects the buyer from the owner, as the owner, after signing the Contract, cannot re-negotiate the price or sell to another bidder. The owner is also protected as the buyer has agreed to the methods of payment, and will forfeit any monies already paid if the contract is not adhered to.
4-) For some property purchases, it is advisable for a secondary sales contract to be drawn-up at the Public Notary Office. This contract becomes legally binding in the Turkish courts. A Turkish Public Notary is a Government appointed solicitor and the Public Notary, unlike the buyer's solicitor, does not act on the buyer's behalf.
4-)After the contract(s) is(are) signed and the deposit paid, the process of applying for Military clearance can begin. This usually takes 2 - 4 weeks and the TAPU cannot be transferred to a foreign purchaser before clearance is received.
Registration of property and owners
There are a number of ways in which a property and its owner should be registered and DSP carries out these registrations for new property owners:
1. Register with the Tax Office to receive a Turkish Tax Number
2. Have the transfer of Title (TAPU) registered in the Title Deed Registry Office
3. Register the new owner with the Municipality establishing a Council Tax record.
4. Register utilities, Electric, Water, Telephone in the buyer's name.
5. Register the property and owner with the local police.
6. Register the owner and their address with the local representative from the Council (known as the Muhtar') this is most important for those who choose to live in Turkey permanently.
DSP do not advise declaring a lower price on the deeds of the property, as has been a common practice here in Turkey, for many years as a tax dodge'. DSP recommend that home owners declare their full sales price on their deeds valuation, unless the new buyer particularly wants to declare a lower value.
It is strongly recommended that for all payments during the buying process and for future expenses property purchasers open a Turkish Bank Account.
Although not exhaustive the following clauses should be considered for inclusion when drawing up a Contract between the buyer, seller, agent and professional representation:
1. A detailed description of the property including address, TAPU details, technical conditions etc.
2. The actual price to be paid to the seller for the property. Mentioning the actual price allows you to secure your rights in case of a future legal dispute.
3. The details of the Bank Account of the seller, it should be a single account into which payments to the seller are to be made. Do not pay an agent or third party. Always pay the vendor. An exception to this may be where a deposit or reservation fee is paid for an 'unseen' property and the buyer rapport has been wholely with their solicitor and estate agent. In this case, the solicitor will advise where payment should be sent.
4. The details of the Bank Account of the professionals used, if payment is to be made via bank transfer.
5. The Payment Terms and Conditions, payments to the seller - including deposit, interim, final payments and payments to an Agent or Solicitor ought to be separately identified.
6. A statement as to who / how the tax liabilities will be paid.
7. Under what conditions and how much money will be paid by the buyer to the seller and vice versa if the terms of the sales contract are broken.
8. Force majeure conditions, for example:- what if a legal obstacle occurs in the future.
9. Any additional works required on the property and who is responsible.
10. Statement of responsibility for the habitation licence if not already in place.
11. How over-due debts, if any, of the current owner, which will prevent the transfer of deeds, how they will be addressed.
12. How existing fixtures and fittings, if any, will be handled.
13. Whether parties can give up the sale/purchase, and if so, under what conditions and what, if any, penalties will be incurred.
14. How to keep all parties regularly informed of on-going transactions.
15. How a Power of Attorney, if any, will be cancelled or amended, how other parties will be kept informed of this.
16. Detailed permanent contact information of all signature holders, to include official identification of all parties.
17. If one of the parties breaches the promises contained in the Contract, who will decide under what conditions a breach was realized.
18. How disputes will be sorted out.
19. The rights and responsibilities of the persons whose signatures appear on the Contract..
20. All Identity Numbers of Turkish nationals (TC Kimlik Number) who are to sign the Contract, the Bar Registry Number of the Solicitor being used and the Trade Registry Number of the Real Estate Company must be recorded.
21. Before signing the Contract it is necessary to have it translated into the buyer's first language and Turkish in the presence of a Legal Translator.
22. It is essential that both foreign language and Turkish versions of the contract are signed in the presence of The Notary Public and are then duly notarized to ensure that:
a. The people who are signing the Contract and their signature's are genuine
b. The Contract is in line with current Turkish laws and officially acceptable anywhere in Turkey.
c. The terms within the contract are binding for all parties.