A promise to sell an immovable, which provides for ownership of the immovable to be transferred at a future date, is a contract of an official character imposing on the parties an obligation to carry out a transaction at the land registry. In practice, however, situations are frequently encountered in which that obligation is not performed of its own accord, in which the party under the obligation to transfer refrains from taking part in the transaction at the land registry directorate or continually postpones the transfer. In such a picture, what remains in the hands of the entitled person is a claim conferred by contract but not reflected in the register.
The action to compel registration, also known in practice as the compulsory registration action, functions precisely to close that gap. In disputes arising from promises to sell an immovable, from construction contracts in return for flats and from construction contracts in return for land share, this is the basic legal instrument giving the entitled person access to the register.
In this briefing note we examine in detail the conditions of the action to compel registration arising from various legal relationships, principally the promise to sell, its parties, the periods to which it is subject and the conduct of the proceedings.
The Definition and Function of the Compulsory Registration Action
The compulsory registration action is an action brought where a person who has assumed the obligation to transfer an immovable does not effect the transfer of title, with the aim of having the immovable entered in the register in the claimant’s name by judgment of the court.
In practice this type of action arises most often in disagreements originating in promises to sell an immovable, in construction contracts in return for flats and in construction contracts in return for land share.
Where the claim is upheld, the judgment of the court takes the place of the declaration of intention directed at the transfer and makes it possible for registration of the immovable in the claimant’s name to be ordered.
The Legal Nature of the Action
The action to compel registration is an action for performance aimed at having ownership of an immovable passed to the claimant by judicial decision.
By this route the claimant seeks the performance, by decision of the judge, of the transfer obligation that the other party has failed to perform. The judgment given produces an effect in rem the moment it becomes final and opens the way to registration of the immovable in the claimant’s name.
The Provisions Forming Its Basis
The principal statutory basis of the action is Article 716 of the Turkish Civil Code No. 4721:
Turkish Civil Code No. 4721 Art. 716 — The right to request registration
"A person who, on the basis of a legal ground capable of founding the acquisition of ownership, holds a personal right to request from the owner the registration of ownership in their own name may, where the owner refuses, request the judge to have ownership passed by judgment."
The substance of the provision is this: a person relying on a legal transaction creating an obligation to transfer ownership may, where the owner refuses to transfer, request that registration be secured by judgment of the court.
Alongside this provision, the rules of the Turkish Code of Obligations No. 6098, of the Land Registry Act and of the Notaries Act are also taken into the assessment so far as promises to sell are concerned.
The Legal Relationships in Which the Action Arises
The action to compel registration is brought where, although a valid legal relationship requiring the transfer of ownership of an immovable exists, the transfer has not been effected at the land registry.
The result sought through the action is that the obligation neglected by the person under the duty to transfer be substituted by judicial decision and that registration of the immovable in the claimant’s name be secured.
The main source of these actions in practice consists of promises to sell an immovable and construction contracts in return for flats. Apart from these, registration claims may also arise out of agreements on the division of an estate and out of other private law relationships concerning the transfer of an immovable.
Promises to Sell an Immovable
Under a promise to sell, one of the parties undertakes to transfer ownership of an immovable in the future; the contract must be drawn up in official form.
Where the purchaser has paid the price or performed the obligations the contract imposes on them but the seller does not effect the transfer at the land registry, the route of bringing an action to compel registration is open to the purchaser.
In such actions the fact that the contract was made in the form of a deed drawn up before a notary is a decisive element; contracts not drawn up in accordance with the official form are as a rule regarded as invalid.
Construction Relationships in Return for Flats
In construction contracts in return for flats the contractor’s obligation is to build certain independent units, while the landowner’s obligation is to transfer the land shares or independent units specified in the contract.
Where the contractor has completed the work it undertook but the landowner refrains from effecting the transfer at the land registry, an action to compel registration may be brought by the contractor.
In these disputes, whether the construction was completed in the manner provided for in the contract, the position as to the occupancy permit and whether there is incomplete or defective work are the matters particularly scrutinised.
Construction Contracts in Return for Land Share
In construction contracts in return for land share too, where the parties have performed their obligations but the agreed transfer has not taken place, the entitled person may request registration of the immovable in their own name by judgment of the court.
In practice these actions for the most part arise from the failure to transfer the land shares that ought to have passed to the contractor, or from the failure to hand over the title deeds to the independent units.
Transfer Obligations Arising from the Division of an Estate
By the agreements they make when dividing the estate, the heirs may determine which heir particular immovables are to be left to.
Where, although a division agreement has been made, one of the parties does not complete the land registry formalities, it is open to the other heirs to seek to compel registration.
Disputes of this nature arise in particular out of estate division contracts and division protocols.
The Conditions Required for the Action to Succeed
Whether a claim to compel registration can be upheld depends on the claimant having legally acquired the right to request registration of the immovable in their own name.
For that reason the court examines in detail the existence of a valid legal relationship between the parties, whether the obligation to transfer has arisen and whether the claimant has performed their own obligations.
A Valid Legal Relationship Requiring Transfer
For the action to be brought, the first condition required is the existence between the parties of a legally valid relationship requiring the transfer of an immovable.
That relationship may arise from a promise to sell, from a construction contract in return for flats, from a construction contract in return for land share or from an estate division agreement.
So far as promises to sell an immovable are concerned, satisfaction of the requirement of official form is also of critical importance.
The Obligation to Transfer Title Must Have Arisen
For the action to be entertained, the obligation to transfer must have actually arisen as regards the respondent.
In other words, the conditions requiring the transfer must have been fulfilled and the respondent must have become bound to carry out the transaction at the land registry.
As a rule compulsory registration cannot be sought on the basis of an obligation to transfer that has not yet arisen or whose conditions have not been fulfilled.
Performance by the Claimant of Its Own Obligation
In contracts imposing obligations on both parties, the claimant too is required to have performed the obligations falling to them.
In promises to sell, the payment of the price, and in construction contracts in return for flats, the contractor’s having completed the building in conformity with the contract, come to the fore in this respect.
The registration claim of a claimant who has not performed their obligation may be dismissed.
The Claim Must Have Fallen Due
Whether a claim for compulsory registration may be asserted depends on the right to request the transfer having fallen due.
This means that the conditions provided for in the contract must have been fulfilled and the transfer must have reached the stage at which it may be demanded.
An action to compel registration cannot be brought directly in respect of an obligation to transfer that is not yet due or that has been made subject to particular conditions.
The Immovable Must Be Specified or Ascertainable
The immovable that is the subject of the action must be specified, or at the least must be of an ascertainable character.
Where distinguishing elements such as the block, parcel and independent unit number cannot be established, it may not be possible to meet the registration claim.
For that reason it is of great importance that construction contracts in return for flats set out expressly which independent units are to be the subject of the transfer.
Registration Claims Based on a Promise to Sell
Actions to compel registration arising from a promise to sell an immovable are one of the most frequently seen types of compulsory registration in practice.
In these actions the purchaser, asserting that the obligation to transfer arising from the contract has not been performed, seeks registration of the immovable in their name by judicial decision.
The court’s examination is concentrated on the validity of the contract, whether the parties have performed their obligations, whether the conditions for the transfer have been fulfilled and whether the immovable has been passed to third parties.
Official Form and the Requirement of a Deed Before a Notary
The validity of promises to sell depends on their being made in the form of a deed drawn up before a notary.
Turkish Code of Obligations No. 6098 Art. 237 — Form
"For a sale of an immovable to be valid, it is essential that the contract be drawn up in official form. A promise to sell an immovable and contracts of repurchase and of pre-emption shall not be valid unless drawn up in official form."
At the outset of the proceedings the court reviews whether the contract was drawn up in accordance with the official form. Where it is found that this requirement has not been observed, the action is for the most part dismissed.
Demonstrating That the Price Has Been Paid
The purchaser making the registration claim is expected to have met the obligations arising from the contract.
Within this framework, the payment of the whole of the sale price, or of the price in the manner agreed in the contract, carries particular weight.
The court assesses whether the claimant has performed their obligation by examining transfer slips, receipts, bank records and other payment documents.
The Seller’s Refusal to Transfer
Where, although a valid promise to sell exists, the seller does not effect the transfer at the land registry, the purchaser is given the opportunity to bring an action to compel registration.
No transaction being carried out at the land registry despite payment of the price, the transfer being continually put off to a later date, or the seller not attending the land registry formalities are typical examples in practice.
In such cases the decision to be given by the court may take the place of the declaration of intention relating to the transfer.
The Protection Afforded by Annotation on the Land Register
It is possible for promises to sell to be annotated on the land register. Although notaries are able to notify the land registry through the electronic system, the annotation having actually been entered in the register carries additional value.
The annotation is a powerful safeguard enabling the beneficiary of the promise to sell to assert their right against third parties as well.
Where the immovable is subsequently transferred to others, the existence of the annotation becomes decisive.
The Passing of the Immovable to Third Parties
Cases may be encountered in which the immovable that is the subject of the promise to sell was transferred to third parties before the action was brought.
In such situations, whether the transferee acted in good faith, whether the contract was annotated on the land register and whether the transfer rests on simulation are examined.
So far as annotated promises to sell are concerned, the registration claim may also be directed against persons who subsequently acquired the immovable.
Compelling Registration in Construction Contracts in Return for Flats
Construction contracts in return for flats are among the legal relationships from which actions to compel registration most frequently arise.
Under these contracts the contractor undertakes to bring a building into being, and the landowner undertakes to transfer the agreed independent units or land shares. Whichever of the parties fails to perform the obligation to transfer, the other may bring an action to compel registration.
Claims Asserted by the Contractor
Where the contractor has completed the construction covered by the contract as agreed but the landowner does not effect the transfer at the land registry, the contractor’s right to bring an action arises.
In these proceedings, whether the construction was completed in conformity with the contract, the position as to delivery of the independent units and whether the parties have met their contractual obligations are examined.
The Landowner’s Registration Claim
Cases are also seen in which the contractor does not complete the land registry formalities relating to the independent units it is to leave to the landowner.
In that event the landowner too may seek registration in their own name and may bring an action to compel registration against the contractor.
Completion of the Construction in Conformity with the Contract
For the registration claim to be upheld, it is decisive that the contractor has completed the building in conformity both with the contract and with the project.
In the court’s examination, conformity with the permit, the construction level reached, compliance with the technical specification and whether the requirements of the contractual provisions have been fulfilled are assessed.
The Place of the Occupancy Permit and Actual Delivery in the Assessment
In construction relationships in return for flats, the obtaining of the occupancy permit and the actual delivery of the independent units carry separate weight.
Where the obtaining of the occupancy permit is listed in the contract among the contractor’s obligations, the absence of that document may affect the assessment of the registration claim.
In addition, whether the independent units have actually been delivered is also a criterion taken into account in determining whether the parties have performed their obligations.
Registration Claims Arising from an Estate Division Agreement
By the estate division contracts made by the heirs following the death of the deceased, it may be determined which heir the immovables in the estate are to be left to.
Where, despite a validly formed division agreement, one of the parties does not carry out the land registry formalities, the entitled heir may bring an action to compel registration.
In immovables subject to joint ownership in common hand, the failure to carry out the necessary formalities at the land registry despite agreement having been reached on the division is among the disputes frequently seen in practice.
The principal matters examined by the court in these actions are the following: whether the parties have met the obligations arising from the contract; whether it is specified to which heir the immovable has been allocated; whether the intention to divide has been clearly expressed; and whether the estate division contract is valid. Where the existence of a valid division contract is established together with the fact that the obligation to transfer has not been performed, registration of the immovable in the claimant’s name may be ordered by judicial decision.
The Parties to the Action
In compulsory registration actions, standing is shaped by the legal relationship requiring the transfer of the immovable.
In the position of claimant stands the person who has acquired the right to request the transfer, and in the position of respondent the person or persons under the obligation to transfer.
Factors such as the state of the land registry records, relationships of succession and the immovable having been passed to third parties are decisive as regards the constitution of the parties.
Standing as Claimant
The action may be brought by the person who has legally acquired the right to request registration of the immovable in their name.
That standing may be recognised in the heir who has acquired the right to take over the immovable under an estate division contract, in the landowner, in the contractor and in the beneficiary of a promise to sell an immovable.
In every case the claimant is required to have derived the right to request the transfer from a valid legal relationship.
Standing as Respondent
The action to compel registration is as a rule directed against the person under the obligation to transfer.
That person is for the most part the person appearing as owner in the land registry; depending on the features of the specific case, however, contractors, landowners, heirs or third parties who subsequently acquired the immovable may also have standing as respondent.
Where the immovable was transferred to third parties before the action, the state of the entry in the register and whether the transferee acted in good faith take on importance.
Statute of Limitations
The limitation period applicable in compulsory registration actions may differ according to the nature of the legal relationship on which the registration claim rests.
Particularly in claims resting on promises to sell, correctly determining the length of the period and the moment at which it begins is critical in practical terms.
In making that assessment the court considers together the contractual relationship between the parties, the date on which the obligation to transfer fell due and whether there have been acts interrupting the limitation period.
The Applicable Period
In actions to compel registration based on a promise to sell an immovable, the general limitation regime of the Turkish Code of Obligations No. 6098 is as a rule applied.
Turkish Code of Obligations No. 6098 Art. 146
"Unless there is a provision to the contrary in the law, every claim is subject to a limitation period of ten years."
Accordingly, the person who has acquired the right to request the transfer must assert the registration claim within ten years running from the date on which it fell due.
When the Period Begins to Run
The limitation period begins to run from the date on which the transfer of title becomes capable of being demanded.
For that, the conditions provided for in the contract must have been fulfilled and the obligation to transfer must have fallen due.
Full payment of the price, completion of the construction in conformity with the contract, or the expiry of the period specified in the contract are typical facts taken into account in determining the starting moment.
Interruption and Suspension
Acknowledgement of the debt by the debtor, the bringing of an action or the commencement of enforcement proceedings by the creditor, and the carrying out between the parties of acts recognising the existence of the claim may interrupt the limitation period.
Apart from this, suspension of the period may also arise in certain special situations provided for by law.
Where the limitation period is interrupted, it begins to run afresh; the court assesses this matter separately according to the features of the specific case.
The Proceedings
Compulsory registration actions are actions producing an effect in rem as regards the transfer of ownership of an immovable. Even so, what is examined in detail in the proceedings is not only the land registry records but also the contractual relationship between the parties, whether the obligations have been performed and whether the conditions for the transfer have been fulfilled.
For that reason the official records relating to the immovable and the legal relationship between the parties are assessed together throughout the process.
Subject-Matter and Territorial Jurisdiction
In compulsory registration actions, subject-matter jurisdiction as a rule belongs to the Civil Court of First Instance.
As regards territorial jurisdiction, the action is brought before the court of the place where the immovable is situated, and the jurisdiction of that court is exclusive. In respect of an action brought elsewhere, the court may give a decision declining jurisdiction.
Application for an Interim Injunction
One of the most important procedural protections in these actions is preventing the transfer of the immovable in dispute to third parties. For that reason it is of great importance that an interim injunction be sought when the action is brought or during the course of the proceedings.
Where the claimant establishes their allegation to the standard of prima facie proof, the court may order that an injunction annotation prohibiting sale and transfer be entered on the land registry record.
This protection prevents the immovable from changing hands while the proceedings are pending and thereby forestalls the decision to be given being rendered nugatory.
Proof and Evidence
In compulsory registration actions the burden of proof as a rule lies on the claimant.
The principal items of evidence resorted to in this context are the following:
- The findings obtained as a result of an on-site examination
- Reports prepared by specialist court-appointed experts
- The statements of the witnesses to be heard
- The correspondence exchanged between the parties
- The records drawn up in relation to delivery
- The bank records and documents evidencing payment
- The land registry records of the immovable
- Construction contracts in return for flats
- Promises to sell an immovable
In disputes arising from construction contracts in return for flats, examination by a court-appointed expert performs a decisive function in establishing whether the construction was completed in conformity with the contract.
Court Fees and Costs of the Proceedings
Compulsory registration actions are as a rule subject to a proportional court fee. For that reason, when the action is brought, the fee calculated on the basis of the value of the immovable in dispute must be paid.
In the course of the proceedings further items may also arise, such as service costs, the expenses payable to witnesses, the outlay for an on-site examination and the fee paid to the court-appointed expert. As a rule these costs are imposed at the end of the action on the losing party.
Attorney Fees
In compulsory registration actions the attorney fee is awarded proportionally, over the value of the immovable determined by the court at the end of the proceedings.
Under the Minimum Attorney Fee Tariff, an order is made for the recovery of the attorney fee from the other party in favour of the successful party.
Alongside this, contractual attorney fees separately agreed between a party and their lawyer may also arise.
Appeal and Appeal on Points of Law
The judgments given in compulsory registration actions are open to review by the higher courts.
- The appeal stage: An application may be made to the Regional Court of Appeal against the decision of the first instance court within two weeks of service of the reasoned decision.
- The appeal on points of law stage: Against the judgments delivered as a result of the appeal review, an application on points of law may be made to the Court of Cassation where the statutory conditions are met.
Decisions relating to registration cannot as a rule be executed at the land registry until they have become final. Even where the court has ordered registration, the transfer of ownership cannot be carried out in the register until the appeal and the appeal on points of law stages have been completed and the decision has become final.
Independent Legal Assessment
Although compulsory registration actions appear to consist of a single claim, in practice they concern contract law, contract for work relationships and the land registry regime all at once. The factors determining the outcome of the action most often emerge not in the courtroom but at the stage at which the contract was formed: choosing the correct form, documenting the obligations and reflecting the right in the register shape every subsequent stage.
In building a strategy in a specific file, it is appropriate that the following matters be addressed as a priority:
- Reviewing from the outset whether the contract satisfies the requirement of official form
- Demonstrating the claimant’s own performance through payment documents, delivery records and correspondence
- Determining clearly, for the purposes of the ten-year period, the date on which the obligation to transfer fell due
- Asserting the application for an interim injunction together with the statement of claim, against the possibility of the immovable being passed to third parties
- Confirming from the register whether the promise to sell has been annotated on the land registry
- Assessing in advance, from a technical standpoint, the position as to the occupancy permit and incomplete work in construction relationships in return for flats
Independent Legal provides advisory services and conducts litigation at every stage of the process in disputes arising from the transfer of immovables, from the drafting of the contract to the execution of the registration decision.