The acquisition and ownership of movable and immovable property are governed by well-settled Turkish laws. In addition, Turkish law recognizes that a person may have certain benefits associated with immovable property without having the rights of ownership. These rights are generally referred to as “non-ownership rights” and are described in more detail below. The principal legislation relating to property rights is the Civil Code.
Rights relating to intellectual property are mainly protected under two different legal regimes: (i) copyright protection and (ii) protection of registered rights. Copyright is protected under the Intellectual Property Law and the Turkish Patent and Trademark Institute provides protection of registered rights. Legal disputes relating to intellectual property rights are resolved by specialized courts.
Title to movable property manifests itself through possession (i.e., physical and actual control over the property). As a general principle, it is sufficient for the transfer of title that the power of control is given to the new owner and no registrations or formal requirements are sought. However, as an exception, a formal transfer process or registration may be required for certain types of movables. For instance, the transfer of certificated shares in a company requires an endorsement on the back of the certificate and the sale of an automobile requires a deed executed before a notary public and registration with the motor vehicles registry.
Title to immovable property
Turkish law mandates that certain immovable property remains state-owned. All other immovable property may be privately-owned. Under Turkish law, there are two classes of state-owned property:
(a) Non-Transferable State Property. This type of non-transferable property is under the control and at the disposal of the state and may be subject to certain non-ownership rights under exceptional cases regulated by law. Non-transferable state property includes: public water supply, land that is not cultivatable such as rocks, hills, mountains and glaciers and resources originating therefrom, coastlines, natural resources, petroleum sources and mines. Non-transferable state property may not be: (i) transferred, sold or acquired, (ii) subject to private-law arrangements that may result in the sale and transfer of title (e.g., a mortgage), or (iii) subject to attachment proceedings (i.e., the legal process of seizing a debtor’s property for the purpose of satisfying a claim that is due and unpaid). However, various pieces of legislation permit the use, generally for public interest, of such property by individuals and/or private legal entities.
(b) Transferable State Property. This property is privately-owned by the state or by a state-owned enterprise and is freely transferable. Transferable state property includes the immovable properties acquired by the state through acquisition, expropriation, inheritance or donation. The state uses such property in the performance of public services or for commercial purposes to generate income. For example, the state may lease the property or operate the property itself.
Foreign Ownership of Immovable Property
Immovable property may be acquired in the form of (i) land, (ii) independent rights registered with the title deed registry (such as servitude rights), or (iii) independent sections of a real property, such as flats, apartments, offices, shops and depots, subject to condominium rights (kat mülkiyeti). Acquisition of title to real property or a mortgage thereon requires an official transfer deed drawn up by the title deed officer and registered with the title deed registry located where the real property is situated. Title deed registry records may be inspected by those persons who can establish a legitimate interest in the relevant property.
Foreign individuals and entities are generally entitled to acquire and own immovable property in Turkey.
Acquisition by foreign individuals. Real property may be acquired subject to the following limitations:
- Individuals must be citizens of one of the white-list countries. Foreign individuals interested in acquiring real property in Turkey may request information on these countries from Turkish embassies/consulates, the General Directorate of Land Registry and title deed offices.
- Ownership and servitude rights may not exceed, in aggregate, 30 hectares (74 acres) per individual.
- The total area of the real property acquired by foreign individuals in one district (ilçe) – an administrative sub-division of a province (il) – may not exceed 10 percent of the total area of privately held property in that district.
- Foreign individuals may not acquire real estate in military or security zones, which are designated by the Office of the President upon the General Staff’s recommendation, and which may include a certain perimeter around military establishments.
Statutory restrictions do not apply to mortgages established in favor of foreign nationals. In case a mortgage is foreclosed, foreign nationals are entitled to the foreclosure proceeds but not the property itself. Please see “Enforcement of Security Interests” in “Banking and Finance” for more information.
Acquisition by foreign companies. Real estate acquisition may only be done for the limited purposes set forth under the Petroleum Law, the Tourism Promotion Law and the Industrial Zones Law. There are no restrictions on the establishment of mortgages in favor of foreign companies. In case a mortgage is foreclosed, foreign companies are entitled to the foreclosure proceeds but not the property itself. Foreign foundations or associations, on the other hand, are not allowed to acquire immovable property in Turkey.
Acquisition by Turkish companies with foreign capital. Turkish companies in which a foreign person or entity holds 50 percent or more of the shares, either directly or indirectly, or has the right to appoint or remove the majority of directors may only own real property, mortgage rights or other servitude rights in order to conduct the activities listed in such company’s articles of association. The same restrictions apply if a company with foreign capital becomes a shareholder, directly or indirectly, in another Turkish company and the ultimate shareholding percentage of the foreign investor reaches or exceeds 50 percent. Acquisition or ownership of real property located in military or security zones by these companies is subject to permission.
Non-ownership rights to property
Under Turkish law, non-ownership rights are classified as either in rem rights enforceable against all persons (e.g., servitude rights, pledges or impositions), or in personam rights enforceable against a contract counterparty (e.g., a lease).
In rem rights
Rights in rem are property rights which may be asserted against third parties. Rights in rem over immovable property must be registered with the title deed registry. Provided that the rules of the foreign jurisdiction governing the acquisition of the in rem right are not against public policy in Turkey, in rem rights created in accordance with the rules of any foreign jurisdiction over any movable property situated outside Turkey are recognized by Turkish law when such movable property is brought into Turkey. In addition, where Turkish law stipulates special conditions for validity in respect of the creation of such in rem rights, such as registration with a public registry, those conditions should be fulfilled in order preserve the effectiveness of the in rem right within Turkey.
Under Turkish law, partial ownership, whether by individuals or legal entities, may exist in two different forms: (i) ownership in common (paylı mülkiyet) where each owner has a distinct and proportionate interest in the whole property and (ii) joint ownership (elbirliği mülkiyeti) where each owner has an undivided interest in the whole property. Joint ownership exists only in a limited number of circumstances prescribed by law (e.g. partners in a partnership). If the property is subject to ownership in common, then each owner has the right to dispose its share of the property. If the property is subject to joint ownership any disposition, including creation of a security interest, requires the unanimous consent of all joint-owners. Furthermore, property subject to joint ownership may only be mortgaged or pledged in its entirety and by all joint-owners at the same time.
A servitude right (irtifak hakkı) is a right of use, in a specific manner, over the property of another person. It may be claimed against the owner of the property and all third persons.
The Civil Code permits the following servitude rights: (i) a servitude right in favor of immovable property (taşınmaz lehine irtifak), (ii) an easement (üst hakkı), (iii) a right to habitation (oturma hakkı), (iv) a usufruct right (intifa hakkı), (v) a right to spring water (kaynak hakkı) and (vi) other servitude rights as defined under the Civil Code as rights granted to serve a specific purpose (e.g., right to transit). If a servitude right is independent and continuous, it may be registered with the land title registry as immovable property. The beneficiary of an independent and continuous servitude right may grant security interests over the servitude right in favor of third persons. For a servitude right to qualify as “independent and continuous” the right must be: (i) valid, (ii) independent (i.e., transferable by its beneficiary to a third person without consent of the owner of the underlying immovable property), (iii) continuous (i.e., established for an unlimited term or for a term of at least thirty years) and (iv) registered in the land title registry as an immovable property upon request by the holder of such right.
Easement (üst hakkı) covers all “integral parts and accessories” on the land over which the easement right is granted. The beneficiary of an easement right has the power and authority to: (i) construct upon or under another person’s land, (ii) own, possess and use the constructions it has built and (iii) possess and use the constructions already located on the land of another person.
A pledge (rehin) is the right to benefit from the value of the property. A mortgage (ipotek) is a pledge of immovable property. Please see Section V, Sub-section C for further details on pledges and mortgages.
An imposition over immovable property (taşınmaz yükü) grants the beneficiary the right to receive performance or delivery that is linked to the economic use of the collateral (e.g., the delivery to the beneficiary of cotton cultivated on the land over which the imposition is established). The immovable property constitutes security for such obligation.
In personam rights
Rights in personam are created by agreement and may only be enforced against the counterparty’s property and not against third parties. To the extent allowed by the Civil Code, these rights may be registered with title registries. In personam rights include rights created by lease agreements, construction agreements, contractual pre-emption, purchase or re-purchase rights and rights to continue joint-ownership in shared immovable properties. Among these, the most commonly used in personam right in Turkey is the lease agreement.
The lease of state-owned immovable property is subject to specific regulation.
With respect to privately-owned real property, as long as a lease is not annotated in the land title registry it is an “ordinary” in personam right. When annotated, the lease becomes a “strengthened” in personam right assertable against third parties. A strengthened in personam right entitles the beneficiary to impose the terms of the lease against future owners of the leased property.
Leases may be in a simple written form and not need be notarized or otherwise certified.
The terms of leases for privately-owned immovable properties may generally be freely determined by the parties. Leases may be executed for a definite or indefinite term. A lease with a definite term may be extended definitely or indefinitely by the parties. Unless the tenant gives notice of termination by the statutory deadline, a definite term lease is automatically renewed for one year with the same terms and conditions (other than any increased rent). The tenant in an indefinite-term contract has the right to terminate for convenience, whereas the lessor must comply with certain notice periods.
Save for certain exempted cases, leases between Turkish residents are required to be denominated in Turkish Lira. Rate increases for a Turkish Lira denominated lease may not exceed the increase in the Producer Price Index.
The acquirer of a real property automatically becomes party to any pre-existing lease agreement and is bound by its terms as a lessor. The lessor has the right to terminate the lease if it needs the property as a personal residence or workplace or for use by the owner’s spouse or child. However, if the lease is registered with the title deed registry the new owner may not exercise the right to terminate and is bound with the agreement for the remainder of its term.
Unless otherwise stipulated in the lease, property taxes, mandatory insurance premium payments (such as earthquake insurance) and similar charges are generally borne by the lessor. Tenants are generally responsible for payment of taxes and charges, such as the environment cleaning tax, attributable to the use of the property.
The ownership rights of intellectual or artistic products of science, literature, music, fine arts or cinema are protected as intellectual property. When such rights are infringed the owner may have claims relating to non-pecuniary rights or financial rights.
Non-pecuniary rights are rights of an intellectual property owner to exclusively decide if, how and when the intellectual property may be shared with the public. Financial rights relate to the owner’s rights to gain the financial benefit of the intellectual property. Accordingly, copyright infringement may give rise to the following claims:
- Cessation of Infringement: A lawsuit may be filed against those who copy and/or distribute intellectual property without the owner’s permission. Claims may include payment of financial rights deprived to the owner.
- Prevention of Potential Infringement: Upon sufficient evidence, a lawsuit may be filed relating to the risk of future infringement.
- Compensation: A lawsuit may be filed in the event that infringement of a non-pecuniary right results in depriving the owner of financial rights or if the owner’s financial rights have been directly infringed.
The Industrial Property Law repealed the multiple decrees with the force of law on trademarks, patents, industrial designs and geographic indications and unified the rules under one single piece of legislation.
The Industrial Property Law provides the following categories of intellectual property that may be registered
- Trademarks: A trademark is the sign or symbol associated with a good or service provided by any person or enterprise which identifies that good or service as distinct from similar goods or services provided by other enterprises.
- Patents or Utility Models: A patent is a protection provided for inventions which are, in comparison to an artistic work product, technically complex and industrially applicable. A utility model is a weaker protection provided for inventions which are not complex enough to be registered as patents. Discoveries, scientific theories, methods of business conduct and literary, artistic and scientific works or studies do not qualify as inventions and therefore do not benefit from patent or utility model protection.
- Industrial Designs: Industrial design is a protection provided for original designs with unique characteristics created to technically complement a product in terms of its shape, size, color, style, configuration, material, or any other specification or feature.
- Geographical Indications: These are signs or designations indicating a specific quality, reputation or other characteristic attributable to the place, area, region or country of origin of a product.
Owners of these intellectual properties may apply to the Turkish Patent and Trademark Institute for registration and protection of rights. Trademarks and utility models are registered for 10 years, industrial designs are registered for 5 years and patents may be registered for 20 years. Geographical indications are registered without a specific term. Registrations may be renewed if certain formalities are satisfied prior the expiration of the registration. Registration provides the ultimate protection of the intellectual property for the term granted to the owner.
All individuals and legal entities who are domiciled, residing in or have industrial or commercial establishments within the territory of Turkey may request registration of intellectual property rights. Foreign nationals may, under multinational agreements to which both Turkey and the origin country are parties or based on reciprocity grounds, also request the Turkish Patent and Trademark Institute to register intellectual property rights registered abroad.