Property law: problems with greedy sellers (2)

Dear Jamie, you may face a big problem. Due to financial difficulties suffered by many construction companies in the Turkish Riviera as a result of the loss of the European market, we have heard of many cases in which foreign buyers are not given the title of their property. Runaway contractors, construction delays and returning contractors (if you are lucky enough) are all very familiar to foreigners purchasing abroad.

Tax evasion

I will focus on one of the sentences in your e-mail, Jamie, “ … I still have to get a copy of my tapu [title deed], which I believe has a figure less than what I paid for on it.” This may become a big problem. Although I have written about tax evasion matters several times in the past, I have been receiving the same types of questions very frequently, and this shows that tax evasion is still going on. It is interesting how easily developers dare to do this.

One common way is for developers to influence buyers into declaring a price lower than the actual purchase price before the authorities at the time of registration. Misrepresenting the purchase price before the authorities, or in other words, declaring a lower purchase price instead of registering a property under its real and actual purchase price is tempting for both the buyer and the seller in that both of them will avoid paying a part of the 3 percent purchase/sale levy when declaring a lower value on the tapu as the purchase price. However, in my opinion, doing this is never worth it when you consider the risks involved. Finally, I should note that the risks for the buyer are more than they are for the seller, but the benefits gained by tax evasion are greater for the seller than they are for the buyer.

I may expand on the details of tax evasion based on property-related transactions at another time.

Non-delivery of title

The following line from your e-mail, “It was completed last June, and I still have to get a copy of my tapu, which I believe has a figure less than what I paid for on it,” made me think about your legal position.

I think there is a serious potential problem: non-delivery of the title. In case you are not given the title, you may need the following information.

A contract signed between a buyer and seller is not a sales agreement but rather, assuming it meets the requirements of Turkish law, a promise to sell. According to Turkish Civil Code Article 705, transfer of the property title must be done before an authorized officer in a land registry office in order for the buyer to be considered the legal owner.

Sometimes, as a buyer purchasing an off-plan villa or apartment, you have to sign a promise-to-sell agreement. A promise-to-sell agreement is valid only if it is made before a notary public. However, notarizing the contract is not enough in most cases since the seller still has the power to place a mortgage on the property.

This agreement gives you the right to request the title from the seller. If the seller fails to fulfill his promise of selling you the property, then you must file a case at a courthouse in the district where the property is located. Your claim is based on the agreement you’ve signed with the seller. Therefore, the only way to sign a promise-to-sell agreement is to notarize it at a public notary.

Finally, if you are not given the title, you may go to court and prove that you have paid for this particular property and say you want it to be registered in your name. If you find out that it is already officially sold to somebody else, then you can demand the return of the purchase price with interest.

Please do not hesitate to ask if you have any questions regarding this matter.

DISCLAIMER: The information provided here is intended to give basic legal information. You should get legal assistance from a licensed attorney at law while conducting legal transactions and not just rely on the information in this corner.