Who owns an immovable property is, as a rule, determined by looking at the entry in the land registry. Being recorded in the register does not, however, of itself show that the legal relationship behind that entry is valid. Entries created on the basis of an invalid contract, a forged document or a transaction that does not reflect the parties’ true intention detach the picture shown by the register from the actual state of rights. The action for annulment of title deed and registration serves precisely to remedy that detachment: it deletes an entry that came into being unlawfully and records the property in the register in the name of the person who is genuinely entitled to it.
Among the protective remedies available where the right of property is infringed, this action ranks among the first in terms of the force of its outcome. The judgment given does not confine itself to a mere declaration; it alters the entry in the register directly and re-establishes the legal position of the property.
In this briefing note we examine, in turn, the normative basis of the action, the principal grounds encountered in practice, the constitution of the parties, the time regime to which it is subject, the conduct of the proceedings and the consequences produced by the judgment.
The Legal Basis of the Action
The normative framework of the action derives largely from the provisions of the Turkish Civil Code No. 4721 devoted to the land registry. Among those provisions, Turkish Civil Code No. 4721, Art. 1025 stands out; that provision allows registrations effected unlawfully to be corrected and confers on the person whose right has been impaired the power to request deletion of the entry. The function of the provision is twofold: on the one hand it ensures that the register is kept accurately and reliably, and on the other it affords concrete protection to the right of property.
The great majority of these actions are directed at the correction of unlawful entries known in practice as wrongful registration. The basis of the action cannot therefore be reduced to the text of a single article; the balance struck between protecting reliance on the register and giving precedence to the true state of rights constitutes the real legal foundation of the action.
The Framework of Turkish Civil Code No. 4721, Art. 1025
Article 1025 of the Turkish Civil Code No. 4721 is the principal source of claims for annulment of title deed and registration. Under that article, a registration entered in the register unlawfully may, upon the application of the person whose right has been infringed, be deleted by judicial decision; and the property may be recorded in the register in the name of the true right holder.
The legislature’s purpose in this provision is to ensure that the data in the register corresponds to the actual state of rights. It is by this means that entries which have come into being unlawfully can be corrected. In that respect Art. 1025 is the central provision determining both the normative source of these actions and the aim they pursue.
Wrongful Registration and the Principle of Reliance on the Land Registry
The concept around which this type of action turns is wrongful registration. Entries which appear in the register but do not reflect the true state of rights, having come into being unlawfully, are so characterised. A registration made using a forged document, a sale founded on simulation, or a transfer effected by a person lacking authority may fall within this category.
The legal order, for its part, also treats the protection of good-faith third parties who acquire immovable property in reliance on the register as one of its fundamental principles. For that reason the courts weigh two interests together during the proceedings: on one side the position of the true owner whose right has been impaired, and on the other the reliance of persons who transacted trusting in the register. The decision given is the product of the balance struck between these two principles.
The Principle of Protection of the Right of Property
Property is among the fundamental rights guaranteed at constitutional level. That a person whose right has been impaired by an unlawful land registry transaction should be able to apply to the courts is a natural requirement of the rule of law.
The claim for annulment of title deed and registration functions as one of the most effective practical instruments of that guarantee. A registration that came into being unlawfully may be set aside by this route and the property restored to its true owner. In that respect the action cannot be regarded as a mere correction of the register; it is a legal mechanism that protects ownership directly.
On What Grounds May the Action Be Brought?
The fact that an entry in the register came into being unlawfully, or does not correspond to the true state of rights, opens the door to the action. In practice this picture most often arises from the invalidity of the transfer transaction, from the transaction having been effected irregularly, or from the intention declared by the parties differing from their true intention.
The grounds most frequently encountered in practice are examined one by one below, each explained through the concrete forms it takes.
Concealing Assets from Heirs through Simulation by the Deceased
Simulation by the deceased describes a situation in which the deceased transfers immovable property with the aim of depriving the heirs of their inheritance rights, and effects that transfer — which in reality is intended as a gift — before the land registry under the appearance of a sale. In such transactions the parties’ true intention and the transaction reflected in the register diverge from one another.
In actions for annulment of title deed and registration founded on simulation by the deceased, if it can be established that the ostensible sale does not reflect reality and that the true purpose was a gift, the annulment of the entry and the registration of the property in the names of the heirs in proportion to their inheritance shares may be ordered.
Transactions Carried Out While the Owner Lacked Capacity to Act
Where the owner lacked capacity to act on the date the transfer was effected, that transaction may be rendered legally invalid. Sales and gifts made in circumstances such as mental illness, cognitive decline brought on by advanced age, or loss of the power of discernment may be annulled on that ground.
In annulment actions founded on lack of capacity, the person’s state of capacity at the moment of the transaction is generally elucidated through forensic medical reports, medical records and witness statements. Where lack of capacity is proved, annulment of the entry and registration of the property in the name of the former owner may be ordered.
Abuse of Authority by the Agent
Where a transaction carried out on the basis of a power of attorney is effected in a manner producing a result not to the benefit but to the detriment of the principal, abuse of the power of attorney arises. Transfer of the property to a relative of the agent at a price far below its market value, or a sale made without the owner’s knowledge, may be given as examples of this situation.
In such cases an action for annulment of title deed founded on abuse of the duties of an agent may be brought. Even if the transaction appears to fall within the scope of the power of attorney, it may be treated as invalid because it is contrary to the rule of good faith, and deletion of the entry may be sought.
Transfer of the Family Residence Without the Other Spouse’s Consent
The Turkish Civil Code No. 4721 makes any disposition over the family residence conditional upon the express consent of the other spouse. Transactions such as a sale, gift or creation of a mortgage effected without that consent may be regarded as unlawful.
The spouse whose consent was not obtained may bring an action for annulment of title deed and registration on the ground of transfer of the family residence without the spouse’s consent, assert the invalidity of the transaction, and request that the property be recorded once again in the name of the former owner.
Claims Based on Wrongful Registration
Every entry recorded in the register unlawfully is termed a wrongful registration. A registration made on the basis of a forged document, a transfer effected by an unauthorised person, or an entry created on the basis of an invalid contract may fall within this characterisation.
The true right holder may, by establishing the unlawfulness of the entry, claim annulment of title deed and registration.
Registrations Based on Forgery or Invalid Documents
Where a land registry transaction has been carried out using a forged document, that transaction is unlawful from the outset. Registrations effected using a forged identity document, a forged power of attorney or a forged contract of sale are invalid.
In this situation annulment of the land registry entry may be sought on the ground of the forged document, and re-registration of the property in the name of the true right holder may be ordered.
Claims Based on the Pre-emption Right (Şufa)
Where one of the co-owners of an immovable property held in shared ownership sells his share to an outsider, the statutory pre-emption right comes into play for the other co-owners. That right means the power to acquire the share sold, on the same terms and in priority to others.
Where a co-owner exercises the pre-emption right within time and brings an action, the court, while accepting the validity of the sale, may order the registration of the share sold in the name of the claimant co-owner. In that respect actions founded on the pre-emption right (şufa) are regarded in practice as a special type of action producing the effect of annulment of title deed and registration.
Registration Claims Based on Acquisitive Prescription
Where an immovable property has been held in possession as owner, without interruption and without dispute, for a long period, ownership may be acquired by prescription once the conditions laid down by law are satisfied. In that case the possessor has the option of bringing an action for the property to be recorded in the register in his own name.
Although actions founded on acquisitive prescription are not technically annulment actions, because in their result they secure the correction of the existing entry or the making of a new registration, they are examined in practice under the heading of actions for annulment of title deed and registration.
Registrations Contrary to a Fiduciary Transaction or Secret Agreement
In a fiduciary transaction the parties, pursuant to a secret agreement between them, have the property registered temporarily in the name of another and agree that it will be transferred back once a specified condition is fulfilled. In arrangements of this kind the person shown as owner in the register and the person holding the right may differ from one another.
Where the fiduciary agreement is breached, or the property is not returned although it was agreed that it would be, the true right holder may seek registration of the property in his own name by way of an action.
Claims Arising from a Contract of Maintenance Until Death
Where immovable property has been transferred under a contract of maintenance until death but the maintenance obligation is not performed, annulment of the entry may be sought together with termination of the contract. In such a case the registration made in favour of the person who fails to perform the maintenance obligation may lose its legal foundation.
Complete non-performance of the maintenance obligation, its serious neglect, or a finding that the contract was simulated are, in practice, the most frequent grounds for actions for annulment of title deed and registration based on a contract of maintenance until death.
Claims Arising from a Construction Contract in Return for Flats
Where the contractor has acted in breach of a construction contract in return for flats, or has failed to perform his obligations, it is possible to recover the shares in the property transferred to him under that contract. The landowner or other right holders may bring an action asserting that the legal foundation of the registration made has fallen away.
Failure to begin construction at all, failure to complete it within the agreed period, or delivery with serious defects are the typical situations in which such actions arise.
The Parties to the Action
In these actions, the correct constitution of the parties is decisive for the sound conduct of the proceedings. As a rule, the person whose right in rem over the immovable property has been impaired is the claimant, while the person shown as owner in the register bears the capacity of respondent.
In some disputes, however, the action must be directed against several persons or brought jointly by several persons. Mandatory joinder of parties may arise in relation to heirs, co-owners or third parties who subsequently acquired the property. The identification of the parties is therefore a critical stage in procedural terms as much as on the merits.
Who May Bring the Action?
The action may be brought by persons who assert that the entry in the register is unlawful and whose ownership or right in rem is thereby impaired. For the capacity of claimant to arise, a direct or indirect right over the immovable property must have been infringed and there must be a legal interest in bringing the action.
In practice the following persons may occupy the position of claimant: the true owner of the property and the heirs; in shared ownership, the co-owners (shareholders); holders of limited rights in rem such as a usufructuary; and other persons whose rights over the property have been impaired.
Thus, for example, heirs whose inheritance rights have been impaired by a simulated transfer effected by the deceased, or an owner who has lost his property as a result of an agent’s abuse of authority, may bring this action.
Against Whom Is the Action Brought?
The action is, as a rule, directed against the person recorded as owner in the register. For the entry to be deleted and a new one created, the holder of the existing entry must be a party to the proceedings.
In some cases a single respondent will not suffice. Where the property has been transferred to several persons or divided among heirs, it may be necessary to direct the action against all those concerned.
In that framework the capacity of respondent may be gathered in the person shown as owner in the register, in those who subsequently acquired the property, in persons occupying the position of heir or co-owner, and in other persons asserting a right over the property.
Where the property has passed to third parties, the action must be directed against the last owner or the current right holder. Failing that, the action risks being dismissed on procedural grounds.
Statute of Limitations and Preclusive Periods
The question of time limits differs according to the legal ground on which the action is founded. As ownership is a right in rem, it does not as a rule come to an end with the passage of time. For that reason claims for annulment of title deed and registration founded on wrongful registration are not, as a rule, subject to the statute of limitations.
By contrast, the legislature has, in certain cases, provided for a preclusive period or a statute of limitations according to the nature of the legal relationship underlying the dispute and with a view to ensuring legal certainty. When time limits are assessed, it is therefore of great importance that the ground on which the action is founded be identified accurately.
Cases Not Subject to Any Time Limit
By virtue of the principle of protection of ownership, a portion of the actions for annulment of title deed and registration are, as a rule, not limited by any period. As these actions are directed at the correction of an unlawful entry, the true right holder may apply to the courts at any time.
The principal cases falling within this scope are as follows:
- Actions directed against third parties acting in bad faith: No time limit applies in actions brought against persons who were aware of the wrongful registration or were in a position to be aware of it.
- Wrongful registration: Where the entry rests on forgery, an invalid power of attorney or a legally ineffective transaction, the annulment action to be brought is, as a rule, not subject to a time limit.
- Simulation by the deceased (concealing assets from the estate): Neither the statute of limitations nor a preclusive period runs in actions brought against simulated conveyances made by the deceased with the aim of concealing assets from the heirs.
Cases Subject to a Preclusive Period
Preclusive periods are periods which the judge is bound to take into account of his own motion and which, once expired, extinguish altogether the possibility of bringing an action.
The examples most frequently encountered in this category in practice may be listed as follows:
- The statutory pre-emption right (şufa): The action must be brought within 3 months from notification of the sale to the right holder through a notary, and within 2 years from the date of sale even where no notification is made.
- Defects of intention (fraud, mistake, duress): Under the provisions of the Turkish Code of Obligations No. 6098, annulment of the contract must be sought within 1 year from discovery of the mistake or the fraud, or, in the case of duress, from the point at which the effect of the pressure comes to an end.
- Actions founded on grounds predating the cadastre: Pursuant to Article 12(3) of the Cadastre Act No. 3402, once 10 years have elapsed from the finalisation of the cadastral records, no action may be brought on legal grounds predating the cadastre.
Cases Subject to the Statute of Limitations
Certain claims rest not directly on a right in rem but on a personal right arising from a contract, and must therefore be asserted within the limitation period.
The principal situations falling within this scope are as follows:
- Disputes arising from a contract of maintenance until death: The general rules on the statute of limitations apply to actions brought on the ground of non-performance of the obligations undertaken by the contract.
- Fiduciary transactions and abuse of the duties of an agent: As these disputes are treated as contractual in nature, they are as a rule subject to the general 10-year limitation period.
How the Proceedings Are Conducted
As actions for annulment of title deed and registration rest on rights in rem relating to the ownership of immovable property, they are heard within a particular procedural discipline.
The Court with Subject-Matter and Territorial Jurisdiction
In terms of subject-matter jurisdiction, these actions are as a rule heard before the Civil Court of First Instance. As the dispute concerns the substance of rights in the immovable property, no other court may be given jurisdiction.
As to territorial jurisdiction, the action must be brought before the court of the place where the property is situated. That rule of jurisdiction is mandatory and cannot be varied by agreement between the parties. The action must accordingly be brought before the civil court of first instance of the place where the property is situated.
Burden of Proof and Evidence
The burden of establishing that the entry came into being unlawfully lies on the claimant. The decisive factor in the outcome of the action is therefore the quality and sufficiency of the evidence placed before the court.
The types of evidence relied on in these actions in practice include land registry records and other official documents, contracts and written material passing between the parties, witness statements, reports of court-appointed experts and records of on-site examination. In files in which lack of capacity is alleged, medical reports carry particular weight.
The court reaches its conclusion as to whether the entry is lawful by assessing the evidence submitted as a whole.
Court Fees and Litigation Costs
These actions fall within the group of actions subject to a proportional court fee. When the action is brought, the fee calculated on the basis of the value of the property in dispute must therefore be paid.
While the proceedings are pending, items such as the fees of court-appointed experts, the cost of the on-site examination, service costs and sums payable to witnesses also arise. When the action concludes, these costs are as a rule borne by the party who loses the case.
Attorney’s Fees
Attorney’s fees are awarded at the end of the proceedings on a proportional basis calculated over the value in dispute. Under the Minimum Attorney Fee Tariff, the successful party is awarded attorney’s fees to be recovered from the opposing party.
In addition, attorney’s fees arising from the engagement agreement signed between the party and his attorney may also be in issue. That item may be claimed separately depending on the outcome of the action.
Appellate Remedies
The decisions given are open to review where the statutory conditions are met. An appeal may be lodged within 2 weeks of the date of service against the decision of the court of first instance.
Judgments delivered following the appeal review may in turn be taken to appeal on points of law where the monetary thresholds laid down by law are exceeded. At these stages the lawfulness of the decision and the assessment of the evidence are reconsidered by the higher judicial authorities.
The Consequences of the Judgment
If, at the end of the proceedings, the court is satisfied that the entry in the register is unlawful, it will order the annulment of the existing registration and the re-recording of the property in the name of the true right holder. With that judgment the data in the register is corrected and the position of ownership over the property is brought into conformity with the law.
The outcome does not, however, consist solely in the deletion of the entry in every file. Depending on the particular features of the case, other consequences may also arise, such as restitution of the property, compensation for loss caused by unjust occupation, or the neutralisation of the legal effects of transactions concluded with third parties. In that regard the action often goes beyond a simple correction of the register and produces a comprehensive result that re-establishes ownership.
Annulment of the Existing Registration
Once the court has established that the entry in the register is unlawful, that entry is annulled. This operation means the removal of the unlawful data contained in the register.
Where registrations made on the basis of forgery, simulation, abuse of a power of attorney or an invalid contract are annulled, the unlawful appearance of ownership over the property likewise comes to an end.
Registration of the Property in the Name of the True Right Holder
Simultaneously with the annulment of the entry, the court orders the registration of the property in the name of the true right holder. That decision secures the creation of a new entry in the register and the legally correct passing of ownership.
For example, in a file brought on an allegation of simulation by the deceased, registration of the property in the names of the heirs in proportion to their shares may be ordered. The position in the register is thereby brought into line with the true picture of rights.
Restitution of the Property and Restoration of the Former Position
In some disputes the correction of the entry in the register does not on its own produce a sufficient result. Where the actual use or possession of the property has remained with another person, the court may also order delivery of the property to the claimant or restoration of the former position.
In such situations consequences such as eviction from the property, handing over of the keys or the cessation of unlawful use may arise.
Claims for Damages
It is also possible for a person who has suffered loss on account of the unlawful transaction to claim damages. Compensation for pecuniary loss arises in particular where the property has been used unjustly for a long period or has lost value.
In practice these claims are most often asserted in the form of compensation for unjust occupation (ecrimisil), compensation for loss of value and payment of a sum for use.
The Independent Legal View
Actions for annulment of title deed and registration do not fit a single mould; the fate of a file is determined from the outset by the legal ground on which the claim is founded. While an action brought on an allegation of simulation by the deceased proceeds free of any time limit, approaching the same facts on the basis of a fiduciary transaction or a defect of intention may change the outcome entirely. The legal characterisation made at the stage of drafting the statement of claim is therefore the principal decision governing the whole of the proceedings.
The most widespread loss of rights in practice arises not from the merits of the action but from procedure. The property changing hands while the proceedings are pending, incomplete identification of the respondents, or a preclusive period being overlooked may cause a claim that is well founded on the merits to come to nothing.
When a road map is drawn up in a particular file, the following matters in particular should be given priority:
- Clarifying from the outset the legal ground on which the claim rests and determining the time regime accordingly
- Requesting the entry of an annotation of an interim injunction on the land registry record in order to prevent transfer of the property to third parties
- Joining all those concerned to the action in cases giving rise to mandatory joinder of parties
- Assessing whether the transferee can be regarded as acting in good faith, together with the facts preceding and following the transaction
- Asserting a claim for damages in the alternative in files in which the prospect of annulment of the title deed is weak
- Calculating in advance the burden of the proportional court fee on the basis of the current value of the property
Independent Legal provides advisory services and litigation representation at every stage of disputes arising from the ownership of immovable property, from the examination of land registry records to the conduct of the proceedings and the entry of the judgment in the register.