Real Estate Promise-⁠to-⁠Sell Agreements: Formation, Form, Land Registry Annotation, Cases Deemed an Assignment of Receivables and the Prohibition of Abuse of Rights – A Review in Light of Court of Cassation Decisions

Known in everyday usage by terms such as sale from a model, off-plan sale, sell-and-build or buying in at the foundation stage, the real estate promise-to-sell agreement is structured as an exception to the general rules. In the law and in Court of Cassation (Yargıtay) decisions, the term immovable property promise-to-sell agreement, which has the same meaning, is also used instead of real estate promise-to-sell agreement (GSVS).

A real estate promise-to-sell agreement creates a situation in which the buyer finances the seller and provides it with a kind of credit. This is because the general rule is that obligations are performed simultaneously. Under Art. 207/II of the Turkish Code of Obligations (TBK), “Unless otherwise agreed in the contract or unless there is a custom to the contrary, the seller and the buyer are obliged to perform their obligations simultaneously.” Because it involves a deferred term, the real estate promise-to-sell agreement brings a number of problems with it. In practice, contracts being signed without complying with the formal requirement, the contractor absconding or going bankrupt before completing the construction, and the same residence being sold to more than one person are a few of the problems encountered.

As a result of constantly running advertisements, models that have been built, housing launches and promises, consumers may have signed the contracts imposed on them without giving them sufficient thought. The legislator has introduced a number of exceptional provisions in order to prevent undesirable situations. In this article, some of the legal issues that may arise in real estate promise-to-sell agreements in which the BUYER IS A CONSUMER will be examined in question-and-answer form under the title “Real Estate Promise-to-Sell Agreements: Formation, Form, Land Registry Annotation, Cases Deemed an Assignment of Receivables and the Prohibition of Abuse of Rights – A Review in Light of Court of Cassation Decisions”.

1) What is a real estate promise-to-sell agreement? By whom and when can it be concluded? How long is it valid?

With a real estate promise-to-sell agreement, the seller undertakes to sign the sale contract that will be concluded in the future, that is, to carry out the transfer of title. For this reason, before the transfer takes place, the parties to the contract sign a promise-to-sell agreement in order to assume an obligation to carry out the transfer.

The real estate promise-to-sell agreement is defined in Article 29 of the Turkish Code of Obligations, headed “preliminary contract”. Although this article does not mention the real estate promise-to-sell agreement directly, it refers to it indirectly through the definition of a preliminary contract.

“ARTICLE 29- Contracts concerning the future conclusion of a contract are valid. Apart from the exceptions provided for in the laws, the validity of a preliminary contract depends on the form of the contract to be concluded in the future.”

Under a real estate promise-to-sell agreement, the buyer’s obligation is to pay the sale price to the seller, and the seller’s obligation is to transfer the immovable property in question to the buyer as agreed in the real estate promise-to-sell agreement. The agreed price may be paid by the buyer up front or in installments; in return, the seller undertakes to carry out the transfer of the immovable property in the future.

Although the definition of the real estate promise-to-sell agreement is not given in the laws, it has taken shape through the practice of the Court of Cassation. In this context, in its decision Docket No. 1992/14-79, Decision No. 1993/7, 27.1.1993, the ASSEMBLY OF CIVIL CHAMBERS OF THE COURT OF CASSATION emphasized that the real estate promise-to-sell agreement is a preliminary contract that creates a personal right, stating that “... a real estate promise-to-sell agreement creates a personal right that entitles the creditor of the promise to sell to demand from the debtor of the promise to sell that ownership of the immovable property that is the subject of the promise to sell be transferred to the creditor in return for its price.”

For a real estate promise-to-sell agreement to be signed, it is not necessary for condominium ownership or construction servitude to have been established; it may also be drawn up before the construction servitude is established.

“As emphasized in the Decision of the Grand Assembly for the Unification of Case Law of the Court of Cassation dated 24.04.1978 and No. 3/4, a promise to sell an independent unit in an immovable property on whose land there is a building but on which condominium ownership or construction servitude has not yet been established has been accepted as valid; and since, where such a promise to sell exists, it is always possible to determine the ratio of the land share to be allocated to the independent unit with the help of the opinion of a court-appointed expert, it has been concluded that this contract is valid even if the ratio of the land share falling to the independent unit is not indicated in the promise-to-sell agreement.” (Court of Cassation, 14th Civil Chamber, Docket No. 2012/7922, Decision No. 2012/9089, 2.7.2012)

In a real estate promise-to-sell agreement, the seller is in principle the owner, but this is not a requirement. The seller may also enter into a real estate promise-to-sell agreement for an immovable property of which it will become the owner later.

Since no special limitation period is provided for actions arising from a real estate promise-to-sell agreement, the ten-year limitation period applies under the general provisions of the Turkish Code of Obligations. This period starts to run when performance of the contract becomes possible.

2) Is there a formal requirement for a real estate promise to sell? What is the consequence of failing to comply with the formal requirement?

Article 237 (Form) of the Turkish Code of Obligations, Article 706 (Legal transaction) of the Turkish Civil Code and Article 89 of the Notaries Law, headed “transactions that must be executed as notarial deeds”, contain provisions on the formal requirements of the real estate promise-to-sell agreement. Under these provisions, it is a condition of validity that the real estate promise-to-sell agreement be drawn up by a notary as a notarial deed.

“TBK ARTICLE 237- For a sale of immovable property to be valid, the contract must be drawn up in official form. Promises to sell immovable property and contracts of repurchase and purchase option are not valid unless drawn up in official form. The validity of a pre-emption contract depends on its being made in writing.”

“TMK Article 706- The validity of contracts aimed at the transfer of ownership of immovable property depends on their being drawn up in official form. Dispositions mortis causa and matrimonial property regime contracts are subject to their own specific forms.”

“Notaries Law Article 89 – Contracts and powers of attorney which by their nature require a transaction at the land registry, as well as wills, sale with retention of title, real estate promise to sell, foundation deeds, marriage contracts, adoption and acknowledgment, contracts for the partition of an estate and other transactions provided for in other laws are drawn up in accordance with the provisions of this chapter.”

In the briefest terms, we can define the real estate promise-to-sell agreement as “a preliminary contract/undertaking concerning the future main sale of an immovable property”. The promise-to-sell agreement must be drawn up by a notary as a notarial deed. A real estate promise-to-sell agreement that is not drawn up by a notary will be deemed invalid, and the benefits the parties have conferred will be subject to restitution on account of the invalid contract. The judge must take this into account ex officio.

“On the other hand, notaries cannot draw up sale contracts for the sale of immovable property registered in the land registry; they can only make "real estate promise-to-sell agreements". Pursuant to subparagraph 3 of Article 60 of the Notaries Law, any other contract made is invalid. For example, notaries cannot even make a contract confirming a sale contract or a contract confirming a real estate promise-to-sell agreement. They can only make promise-to-sell agreements in the form of a notarial deed. These matters relate to public order and are important aspects of the rule, laid down in Article 33 of the Code of Civil Procedure (HMK), that Turkish law is applied ex officio. Whether or not a contract is valid must be examined by the judge ex officio, and a decision must be made accordingly.”(Assembly of Civil Chambers of the Court of Cassation, Docket No. 2017/13629, Decision No. 2017/436, 8.3.2017)

“Drawing up the real estate promise-to-sell agreement before a notary in the form of a notarial deed is a condition of validity, and the ordinary contract signed between the parties is invalid. Under the invalid contract, the parties must return to each other what they have given.”(Court of Cassation, 19th Civil Chamber, Docket No. 2017/4740, Decision No. 2019/5146, 14.11.2019)

Where the prescribed formal requirements are not met, the rule is that contracts are absolutely null and void. However, it is also a fact that each situation must be examined on its own merits. While the Court of Cassation does not grant legal protection to the transfer, by an ordinary written real estate promise-to-sell agreement, of real estate owned by the contractor itself, it has granted legal protection to the transfer by the contractor, by an ordinary written real estate promise-to-sell agreement, of real estate belonging to the landowner, and has accepted that this is in the nature of a transfer of a receivable. In this sense, one can speak of a valid contract.

“It is understood that the immovable property that the defendant promised to sell to the plaintiff in the Real Estate Promise-to-Sell Agreement signed between the parties in ordinary written form is not an immovable property registered in the defendant’s own name in the land register, but one of the independent units that will fall to the defendant’s share on account of the construction it will carry out under the construction-for-flats agreement duly drawn up as a notarial deed before a notary with the landowner, who is not a party to the action. In this case, the defendant does not make a promise to sell real estate to the plaintiff; rather, the defendant’s right to have the property transferred and registered is transferred to the plaintiff, as a personal right, by way of assignment of a receivable. Since such a transfer contract is not subject to a formal requirement, the written contract between the parties is valid.” (Court of Cassation, 19th Civil Chamber, Docket No. 2017/3101, Decision No. 2019/5049, 7.11.2019)

In real estate promise-to-sell agreements, the buyer will also be unable to bring an action for cancellation of title and registration on the basis of an ordinary written contract. This must not be overlooked. Many contractors have buyers sign ordinary written contracts in order to evade their contractual liabilities. Since the legal order will not protect contracts made without complying with the official written form, buyers who hold ordinary written contracts are likely to suffer a loss of rights.

“As for the present case, since it is understood that the promise-to-sell agreement dated December 20, 2010, by which the sale of independent unit no. 9 that is the subject of the action was promised, is an ordinary contract and, as stated above, was not made in compliance with the official form requirement, the court’s decision to dismiss the action with regard to the claim for cancellation of title and registration was found to be correct.” (Court of Cassation, 14th Civil Chamber, Docket No. 2018/5160, Decision No. 2019/7190, 30.10.2019)

In an action concerning loss of rent, the Court of Cassation has also ruled that loss of rent cannot be claimed on the basis of an ordinary written contract.

“As a result of the proceedings conducted by the court in compliance with the reversal judgment, the action was dismissed on the grounds that the real estate promise-to-sell agreement dated May 10, 2007, which is accepted by the parties, was made in ordinary written form; that the promise-to-sell agreement drawn up between the parties is not valid because it was not drawn up in official form as required by Art. 237/2 of the TBK; that even if a transfer was subsequently made at the land registry, an ordinary contract that was invalid from the outset will not become valid; furthermore, that, with regard to the transfer of the immovable properties made in official form in the land register, the plaintiff buyer could not allege and prove that an annotation had been entered in the land register of the immovable properties on the basis of the contract made in ordinary form; and that, consequently, no receivable for loss of rent can be claimed on the basis of an invalid contract; the judgment was appealed on points of law by counsel for the plaintiff.CONCLUSION: In view of the contents of the file, the evidence on which the decision is based and the reasons requiring it, and since there is no error in the assessment of the evidence, it is decided that all of the appeals of counsel for the plaintiff, which were not found justified, be rejected and that the judgment, which was found to be in accordance with procedure and law, be UPHELD,”( Court of Cassation, 19th Civil Chamber, Docket No. 2018/3659, Decision No. 2019/5313, 26.11.2019)

3) Where a real estate promise-to-sell agreement does not comply with the required form, is it possible, within the framework of the prohibition of abuse of rights, for the invalid contract that is contrary to form to become a valid contract?

Nevertheless, where the parties to the contract have performed their obligations arising from the contract free from any error, invoking non-compliance with the form amounts to an abuse of rights. Where the prohibition of abuse of rights is violated, the non-compliance with the form will not be heard, the negative consequences of the non-compliance with the form will cease to exist, and the contract will produce its effects and consequences as if it were a valid contract.

“On the basis of the claim, the defense, the expert report and the contents of the file, the court found that the contract between the parties was made in ordinary written form, but that there was no dispute that the parties had mutually performed their obligations, that is, that the defendant had transferred ownership of the land to the plaintiff and the plaintiff had transferred ownership of the agreed flats to the defendant, and dismissed the action on the grounds that the plaintiff’s assertion that the contract was invalid, made more than 3 years after the completion of the immovable properties, would be incompatible with the rules of good faith… CONCLUSION: For the reasons explained above, it is decided that all of the appeals of counsel for the plaintiff be rejected and that the judgment, which was found to be in accordance with procedure and law, be UPHELD,” (Court of Cassation, 23rd Civil Chamber, Docket No. 2016/7127, Decision No. 2019/4566, 6.11.2019)

We stated above that the buyer cannot compel the seller to register the property even if the buyer has fulfilled all of its obligations arising from the ordinary written real estate promise-to-sell agreement. However, it was also mentioned that the prohibition of abuse of rights is an exceptional situation. In this context, where the parties have performed all of their obligations and actual delivery has taken place, the fact that the contract was not made in official form does not prevent an action for cancellation of title and registration from being brought.

“That an action for compulsory registration brought on the basis of a contract that gives rise to an obligation to transfer ownership of an immovable property registered in the land registry, but which is found invalid because it was not made in accordance with the formal conditions laid down by law, cannot as a rule be accepted; however, in cases where, without a valid contract for the sale of an independent unit in an immovable property whose construction has begun with a view to its being subject to the Condominium Law, the parties agree on the sale of the independent unit, the buyer performs all of its obligations and the seller delivers the independent unit, and although the buyer uses it as an owner, the seller does not agree to transfer ownership at the land registry, the action for registration brought may be accepted, depending on the particular features of the case and having regard to Article 2 of the Civil Code”(Decision of the Grand Assembly for the Unification of Case Law of the Court of Cassation (İBBGK) dated 30.09.1988 and No. 1987/2 1988/2)

It would be appropriate to consider the prohibition of abuse of rights within a very limited framework; otherwise, all situations could be assessed within the scope of the prohibition of abuse of rights.

“(…) For when non-compliance with form and the rule of the prohibition of abuse of rights, both of which are mandatory by their nature and must be taken into account by the judge ex officio, conflict in a dispute, the particular features of the case are of great importance for the formal requirement rule to be overcome on the basis of abuse of rights. This is a natural consequence of the subsidiary nature of the rule laid down in the second paragraph of Article 2 of the Civil Code (MK), and the rule of the prohibition of abuse of rights can apply only in extraordinarily compelling cases. The same principle was also referred to in the Decision of the Grand Assembly for the Unification of Case Law of the Court of Cassation dated 25.1.1984 and No. 3/1, and the opinion of Ord. Prof. Dr. A. B. Schwarz on this subject (Medeni Hukuka Giriş, translated by Hıfzı Veldet, p. 201 et seq., Istanbul 1946) is, in summary, as follows: "-It is necessary to act very cautiously in applying this general provision. For the meaning of all rational private law expressed in today’s laws is to resolve legal questions not by vague feelings of equity but by definite and clear principles. A practice of law based solely on good faith and abuse of rights endangers this goal. For these reasons, it is necessary to apply to each question the special provision relating to it, and to apply Article 2 of the Civil Code, in extraordinarily compelling cases, purely in a supplementary and corrective manner..."(Assembly of Civil Chambers of the Court of Cassation, Docket No. 2017/13629, Decision No. 2017/436, 8.3.2017)

It should not be forgotten that every specific situation is unique and that the decisions and case law of the Court of Cassation may also change according to changing circumstances.

4) Can a real estate promise-to-sell agreement be transferred, and in which cases is the new creditor’s right not protected in the event of a transfer?

Unless the contract or the nature of the transaction precludes it, the creditor may, without seeking the debtor’s consent, transfer its receivable to a third party by means of a real estate promise-to-sell agreement that it will again conclude before a notary.

“Immovable property promise-to-sell agreements are among the contracts that create personal rights. A person who becomes a creditor under such a contract may, as long as there is no prohibition on transfer, transfer and assign this personal right arising from the contract to a third party, without seeking the debtor’s consent, again by an immovable property promise-to-sell agreement. In this case, the person who takes the assignment of the receivable may take the place of the assignor and exercise the assignor’s rights.”(Court of Cassation, 14th Civil Chamber, Docket No. 2010/1003, Decision No. 2010/3455, 30.3.2010)

There may be a prohibition on assignment in the construction-for-flats agreement (land share in exchange for construction) concluded between the landowner and the contractor. The existence of a prohibition on assignment prevents the contractor from entering into a real estate promise-to-sell agreement. If, contrary to this, the contractor carries out assignment transactions, the third party’s right is not protected.

“The "construction agreement" made with the contractor, one of the defendants, on which the plaintiff relies, is by its nature the assignment of a receivable referred to above. Although the debtor’s consent is not required when an assignment is made, under Art. 1621 of the former Code of Obligations (BK), for the assignment to be valid, the assignor must not have been prohibited from making it by law, by contract or by the nature of the transaction. Article 3 of the construction-for-flats agreement between the defendants contains, verbatim, the provision "the contractor company is free to build the parcels belonging to it either as a cooperative or as build-and-sell, as it wishes. It may not make an assignment or transfer its rights arising from the contract to another person or company." It can be seen that, with this provision of the contract, a prohibition on assignment has been imposed on the contractor. For this reason, the plaintiff third party cannot demand the transfer of ownership from the defendant landowner on the basis of the assignment made by the contractor.” (14th Civil Chamber, Docket No. 2011/3185, Decision No. 2011/7135)

The landowner and the contractor may have signed a construction-for-flats agreement between them. In this case, the immovable properties transferred, or promised to be transferred, to the contractor on the basis of the construction-for-flats agreement made between the landowner and the contractor may be transferred to a third party. The buyer who signs a real estate promise-to-sell agreement with the contractor is also deemed to have taken over the contractor’s receivable from the landowner. The creditor who takes over the contractor’s receivable from the landowner may exercise this right against the landowner. In this case, the creditor, who is a third party, may compel the landowner to register the property; however, the contractor’s failure to fulfill its obligations gives the landowner the right to refuse registration.

“Since the subject of the assignment will be whatever actual receivable the contractor has become entitled to under the contract it made with the landowner, the assigning contractor’s assignment to a third party of a right that it has not earned from the landowner is of no significance for the landowner. On the other hand, if the contractor has assigned to a third party (the plaintiff) the personal right it will earn without having performed, in whole or in part, its obligation towards the landowner, the third party (the plaintiff) cannot compel the landowner, who has the right to rely on the provision of Article 97 of the Turkish Code of Obligations, to perform.” (Court of Cassation, 14th Civil Chamber, Docket No. 2018/3982, Decision No. 2019/3814, 30.4.2019)

5) If a real estate promise-to-sell agreement is invalid for lack of the required form, what does the amount the buyer can claim include, and what difference arises if it is regarded as a valid contract under the provisions on assignment of receivables?

We stated that the ordinary written real estate promise-to-sell agreement concluded between the parties will be invalid. The parties’ performances based on the invalid contract are subject to restitution. The contract price that the seller is obliged to return is returned in accordance with the provisions on unjust enrichment. In this context:

“The real estate sale contract dated February 2, 2000, concluded between the plaintiff and R. T., one of the defendants, is legally invalid because it was not made in official form. (TMK Art. 706, BK Art. 213, TBK Art. 237, Land Registry Law Art. 26, Notaries Law Art. 60). For this reason, it does not create rights and obligations for its parties as valid contracts do. In this case, the plaintiff may reclaim the price it gave to the defendant on account of the invalid contract within the framework of the rules on unjust enrichment.

Unjust enrichment is the increase of one person’s assets, without just cause, at the expense of another person’s assets; and when restitution of what was given is ensured under unjust enrichment, the money paid must be brought up to its purchasing power on the date of payment, in other words, the principle of corrective justice must be applied.

The principle of corrective justice means that a person who, without relying on a just cause, increases his or her own assets by benefiting from the assets of another is obliged to return the gain obtained, and it expresses a genuine obligation to restore the previous state(...)

That being the case, while the court, in accordance with the principle of corrective justice, should have had it calculated, with regard to the money paid under the informal sale contract for immovable property, what value its purchasing power, which has decreased due to various economic factors, would reach from the date of payment up to the date of the action, by taking the averages of inflation, the consumer and producer price indices, increases in gold prices and foreign exchange rates, increases in civil servant salaries and worker wages and increases in the interest rate, by obtaining from a qualified court-appointed expert a report that complies with the settled case law of the Court of Cassation and is open to review, and should have decided according to the result obtained, rendering a judgment in line with an insufficient expert report as a result of an erroneous assessment was found to be contrary to procedure and law, and this required reversal.” (Court of Cassation, 3rd Civil Chamber, Docket No. 2015/11138, Decision No. 2015/19014, 26.11.2015)

We stated that an ordinary written real estate promise-to-sell agreement will be invalid and that the parties will be obliged to return what they have given under the provisions on unjust enrichment. However, we also mentioned that if real estate owned by the landowner is made the subject of an ordinary written real estate promise-to-sell agreement by the contractor, this will be regarded as an assignment of a receivable and that, for this reason, there will be a valid contract.

An ordinary written real estate promise-to-sell agreement concluded between the parties may, under certain circumstances, be subject to the provisions on assignment of receivables. In this case, the creditor who cannot obtain the real estate promised to it because of the contractor’s default may claim its positive damages. The buyer has been given the possibility of claiming positive damages in lieu of performance, that is, the market value of the immovable property in question. The point to note: since there is a valid contract, the amount the buyer may claim is not limited by the provisions on unjust enrichment, and it is stated that positive damages may also be claimed.

“ ...the defendant is a contractor and, under the construction-for-flats agreement, sold two of the flats falling to its share to the defendant. In this case, the contract between the plaintiff and the contractor is in the nature of an assignment of a receivable, and its having been made in written form is sufficient for the contract to be accepted as valid. In the present case too, the contract between the parties is valid, as it was made in writing. In valid contracts, a claim may be made for positive damages in lieu of specific performance. In the action at hand, the plaintiff has also claimed the market value of the flats within the scope of positive damages in lieu of specific performance. However, the plaintiff has performed incompletely by not paying 10,000.00 TL of the price agreed in the contract. This matter is accepted by the parties and the court and is undisputed. That being the case, while the court should have accepted that the contract is valid and determined the plaintiff’s receivable by proportioning the payment made to the market value determined as of the date of the action, rendering a decision as written through an erroneous assessment is contrary to procedure and law and is a ground for reversal." (Court of Cassation, 13th Civil Chamber, Docket No. 2016/27346, Decision No. 2019/12374)

6) Can a real estate promise-to-sell agreement be annotated in the land register, and what is the legal effect of the annotation?

Article 1009 of the “Turkish Civil Code” states that real estate promise-to-sell agreements may be annotated in the land register. Accordingly:

“Article 1009: Rights arising from contracts of construction in exchange for land share, promise to sell immovable property, lease, purchase option, pre-emption and repurchase, as well as other rights whose annotation is expressly provided for in the laws, may be annotated in the land register. By being annotated, these rights may be asserted against the holders of rights subsequently acquired over that immovable property.”

Although a real estate promise-to-sell agreement made before a notary is binding between the buyer and the seller, if it is not annotated in the land register, the seller can also sell the immovable property to other buyers. To prevent any harm, it is beneficial to have the contract annotated in the land register. Otherwise, it will be possible for the same immovable property to be promised, or even sold, to third parties as well, and the buyer holding a real estate promise-to-sell agreement will often have no right other than to claim the sum it has paid. Annotation in the land register entitles the buyer who holds the right to assert it against third parties.

After the annotation, if the immovable property that is the subject of the contract is transferred to a third party, the creditor to whom the transfer of the immovable property was promised may exercise its right to purchase against the third party. Likewise, the deletion of other rights that are created after the annotation and are incompatible with the reinforced personal right may be requested.

“Immovable property promise-to-sell agreements may be recorded in the annotations column of the land register pursuant to Article 1009 of the Turkish Civil Code. In this way, the creditor under the contract reinforces its personal right arising from the contract and gains the ability to assert it against third parties. Pursuant to Article 26/6 of the Land Registry Law, this annotation is valid for five years and, upon the expiry of five years, is deleted from the register and loses the said force. Any attachment, mortgage and similar annotations capable of restricting the rights of the creditor under the contract that are entered in the register within five years after the annotation of the promise-to-sell agreement in the land register do not bind the creditor under the contract either.” (Court of Cassation, 14th Civil Chamber, Docket No. 2016/12052, Decision No. 2019/4099, 7.5.2019)

As a rule, the buyer or the seller may request the Land Registry Office to enter the annotation in the land register. For this annotation to be made in the land register, there is no need for a separate provision to this effect in the promise-to-sell agreement or for a separate annotation agreement to be made. However, where the promise-to-sell agreement is made between the buyer and the contractor company building the residence, and the contractor company is not the landowner, it is of course not possible to place an annotation on the landowner’s real estate registered in the land registry on the basis of the promise-to-sell agreement made between the buyer and the contractor company. In this case, an annotation agreement must additionally be made between the landowner and the buyer. The period of validity of the annotation entered is limited to 5 years.

Another point to note here is the case where immovable properties that have no encumbrances in the land register and are owned by the contractor are made the subject of a sale through a real estate promise-to-sell agreement. The contractor who has received an immovable property as an advance under a construction-for-flats agreement remains under the obligation towards the landowner to complete the construction. In this case, even if the buyer annotates the real estate promise-to-sell agreement in the land register in the belief that it has bought the real estate from the contractor, its right is not protected against the landowner. This also applies where the immovable property is transferred by the contractor to a third party by way of sale.

“The construction servitude title deeds given to the contractor under a construction-for-flats agreement are in the nature of an advance. If the contractor sells independent units to third parties, these persons become right holders only when the contractor performs its obligations towards the landowner. In this case, since a person who buys an independent unit in a building under construction cannot be said to be in good faith, that person cannot benefit in this sense from Article 1023 of the TMK.”(Court of Cassation, 23rd Civil Chamber, Docket No. 2017/2892, Decision No. 2019/5214, 10.12.2019)

In order not to suffer a loss of rights in all these processes, it will be in the parties’ interest to obtain legal support from a lawyer.

Att. Taha Hüseyin Çebi

Trainee Att. Batuhan Özata

This article is a general assessment prepared in accordance with the legislation in force on its date of publication; it does not constitute a legal opinion. This English text is a translation of the Turkish original; in case of any discrepancy, the Turkish version prevails.