The concept of improvements covers structures, trees, facilities and similar elements subsequently created on an immovable property that increase the value of that property. An action for the determination of ownership of improvements, for its part, is a declaratory action seeking to establish by court judgment that those elements situated on the immovable property belong to a particular person.
In practice, the place where this determination gains the greatest importance is proceedings for the dissolution of co-ownership. How the proceeds of the sale are to be divided, and how the account between the co-owners is to be settled, often varies according to the person to whom the improvements are held to belong.
In this briefing note we address in detail the concept of improvements, the conditions required for an action for the determination of ownership, who the parties will be, how proof is to be furnished, the connection the action forms with the action for the dissolution of co-ownership, and the consequences of the judgment to be given.
The Concept of Improvements
Improvements denote structures, facilities, planted trees or similar elements subsequently created on an immovable property that increase its economic value. In practice, disputes arise in particular as to the person to whom buildings constructed on another’s land, trees planted there, or various structures created there are to be regarded as belonging.
The concept is decisive as regards proceedings for the dissolution of co-ownership, disputes arising from inheritance, and settlements of account between co-owners. Establishing that the improvements belong to a particular person produces direct legal consequences as regards the division of the sale proceeds and the determination of the parties’ entitlements.
The Legal Nature of Improvements
Article 684 of the Turkish Civil Code No. 4721 provides that a person who is the owner of a thing is also regarded as the owner of its integral parts. To the same effect, the provision of Art. 718 of the Turkish Civil Code counts structures, plants and springs on land as falling within the scope of ownership of the land. Structures and facilities on an immovable property are therefore accepted as a rule to belong to the owner of the land.
In this framework improvements are regarded as an integral part (constituent part) of the immovable property and in principle share the legal fate of the land. In practice, however, situations in which the person who created the improvements is someone other than the owner of the immovable property are frequently encountered. Particularly in relationships of co-ownership in shares, or where a structure is built on land belonging to another, a need arises for ownership to be determined separately.
Elements Capable of Being Regarded as Improvements
Although which elements will fall within the scope of improvements varies according to the particular case, those most frequently encountered in practice are as follows:
- Planted crops
- Trees
- Buildings
- Annexes and facilities
Whether such elements, brought onto the immovable property subsequently and carrying an economic value, are to be regarded as improvements is determined by assessing together the features of the case, the manner in which the element is used and the examinations of the court-appointed experts.
Conditions Required for the Action to Be Brought
Whether an action for the determination of ownership will be entertained depends on several conditions being satisfied cumulatively. The court does not confine itself to whether a structure or facility exists on the immovable property; it also examines by whose hand that element was created, what legal relationship lies behind it, and whether the claimant has an interest worthy of protection in seeking the determination.
The failure of one of the conditions to be satisfied may result in the action being dismissed.
The Existence of an Element in the Nature of an Improvement
For the action to be brought, there must above all exist on the immovable property a structure, facility or planted element capable of being regarded as an improvement.
Elements that make no contribution to the economic value of the immovable property, that are of a temporary nature or that express no value in themselves are as a rule not seen as falling within this scope. The existence of an improvement is therefore established, according to the features of the case, by an examination by a court-appointed expert.
The Person Who Created the Improvement Being Other Than the Owner
The action typically arises where the person who created the improvement is someone other than the owner of the immovable property.
No separate determination of ownership is called for as regards structures and facilities created by the owner of the immovable property personally. By contrast, a dispute may arise where one of the co-owners creates a structure by their own labour and expenditure, or where improvements are created on land belonging to another.
The Existence of a Legal Interest
Since the determination of ownership is a declaratory action, the claimant’s having a legal interest in taking this course is a procedural requirement.
In practice that interest arises for the most part from an action for the dissolution of co-ownership, from the division of the sale proceeds, or from the need for a settlement of account between the co-owners. Where no current interest worthy of protection in the determination of ownership can be shown, a judgment of dismissal may be given for want of a procedural requirement.
The Improvement Having Been Created by Independent Labour and Expenditure
For an improvement to be regarded as belonging to a particular person, it is required that the structure or facility in question have been brought into existence by that person’s own labour, expenditure and contribution.
In this assessment, who bore the costs of the structure, by whom the construction process was conducted and from which person the economic contribution came acquire importance. At this point the court weighs together witness statements, official records, payment documents and the reports of court-appointed experts.
The Existence of a Dispute as to Ownership
For the action to be brought, there must exist a dispute between the parties as to the person to whom the improvements belong.
Where there is no disagreement between the parties as to ownership, there may be no legal interest in bringing a separate declaratory action. The court therefore also assesses separately whether ownership of the improvements forming the subject matter of the action is genuinely in dispute.
The Parties to the Action
In actions of this kind, accurate determination of the parties is of critical importance for the sound conduct of the proceedings. Since the essence of the dispute is the person to whom the improvements belong, both the persons asserting rights over the improvements and the owner of the immovable property must feature in the action.
Incomplete constitution of the parties is among the principal procedural problems leading in practice to dismissal of the action or to prolongation of the proceedings.
The Capacity of Claimant
An action for the determination of ownership is as a rule brought by the person who created the improvements. That person seeks the determination of ownership by asserting that the structures, facilities or planted elements on the immovable property were created by their own labour and expenditure.
The persons capable of being claimants may be listed as follows:
- Co-owners
- The person who created the improvements
- Other persons having a legal interest worthy of protection
- Heirs
Where the person who created the improvements has died, it is accepted that the heirs too may seek the determination of ownership. Likewise, it is accepted that co-owners who will be affected by the division of the sale proceeds in proceedings for the dissolution of co-ownership also have a legal interest.
The Capacity of Respondent
The action is as a rule directed against the owner of the immovable property or against the persons asserting a claim of right over the improvements.
Where the immovable property is subject to co-ownership in shares or to joint ownership, it may be necessary for the action to be brought against all the co-owners. The judgment to be given may directly affect the sphere of the co-owners’ rights and, in particular, the distribution of the proceeds in the process for the dissolution of co-ownership.
In this context the following persons may stand in the position of respondent:
- Persons asserting rights over the improvements
- The owner of the immovable property
- The co-owners
Complete constitution of the parties is decisive, particularly in disputes connected with proceedings for the dissolution of co-ownership.
The Connection with the Action for the Dissolution of Co-Ownership
In practice there is a close legal and procedural connection between actions for the determination of ownership and actions for the dissolution of co-ownership (izale-i şuyu). Where it is asserted that a building, tree or other element on immovable property subject to co-ownership in shares or to joint ownership was created by a particular co-owner, the outcome of the action for the dissolution of co-ownership is directly affected by that assertion.
The determination of ownership is therefore of considerable importance as regards the division of the sale proceeds and the correct settlement of account between the co-owners.
Treatment as a Preliminary Question
Where, while the proceedings for the dissolution of co-ownership are under way, one of the co-owners asserts that the improvements belong to them and agreement cannot be reached among all the co-owners on the point, the Civil Court of Peace cannot give a binding judgment on the question of ownership.
In such a situation the court grants the party asserting the claim a definite period within which to bring an action for the determination of ownership. Once the action is brought, that file is treated as a “preliminary question” as regards the proceedings for the dissolution of co-ownership.
Accordingly, until the judgment on ownership becomes final, it may not be possible for a final judgment to be given in the file for the dissolution of co-ownership as regards the sale or the distribution of the proceeds.
The Requirement of a Legal Interest Taking Concrete Form
Since the action is in the nature of a declaratory action, the claimant’s having a legal interest in bringing the action is required here too.
In practice that interest arises for the most part from the existence of a pending action for the dissolution of co-ownership in respect of the immovable property, or of an ongoing expropriation process. The determination of ownership produces direct consequences, particularly at the stage of dividing the sale proceeds.
By contrast, where the determination of ownership alone is sought in the absence of proceedings for the dissolution of co-ownership or a similar process in respect of the immovable property, a judgment of dismissal may be given for want of a legal interest.
The Reflection of Improvements in the Sale Price
Where the sale of the immovable property is ordered at the end of the action for the dissolution of co-ownership, the economic value of the improvements upon it directly affects the sale price.
At this stage the total value of the immovable property including the improvements and the value of the bare land are determined separately by an examination by court-appointed experts. The proportion in which the improvements contribute to the total price is thereby established.
Distribution of the Proceeds Among the Co-Owners
Where it is established by court judgment that the improvements belong to a particular co-owner, the distribution of the sale proceeds is made according to that determination.
In practice the proportion of the improvements’ contribution to the total price is calculated first; the part falling to the improvements is paid to the person who created them. The remaining land price is then divided among the co-owners in proportion to their shares.
In this respect actions for the determination of ownership perform a decisive function as regards the equitable division of the proceeds in files for the dissolution of co-ownership.
The Proceedings
Actions concerning ownership of improvements are among the types of action that require technical examination and in which the procedural rules carry considerable weight. The court weighs not only the existence of the improvements but also by whose hand and with what labour and expenditure they were brought into existence, the economic contribution they make to the immovable property, and their effect on the action for the dissolution of co-ownership.
Particularly in disputes connected with files for the dissolution of co-ownership, the on-site examination and the examinations by court-appointed experts are often the factor determining the outcome.
Courts with Subject-Matter and Territorial Jurisdiction
In these actions subject-matter jurisdiction lies as a rule with the Civil Court of First Instance. The dispute concerns assets and no special rule of jurisdiction to the contrary has been provided.
As to territorial jurisdiction, the action is brought before the court of the place where the immovable property is situated. Under Art. 12 of the Code of Civil Procedure No. 6100, the court of the place where the immovable property is situated has exclusive territorial jurisdiction in actions concerning rights in rem over immovable property.
Request for an Interim Injunction
One of the principal risks encountered in these actions is that the sale transactions in the connected file for the dissolution of co-ownership are completed before the dispute as to ownership has been concluded.
For that reason, when the action is brought, an interim injunction may be sought halting the sale transactions in the file for the dissolution of co-ownership, or requiring the part of the proceeds corresponding to the improvements to be held and invested pending the outcome.
Having regard to the features of the case, the court may order interim measures of legal protection suitable for safeguarding the parties’ rights.
The Burden of Proof and the Evidence
In actions for the determination of ownership the burden of proof lies on the party asserting that the improvements belong to them. The claimant is expected to establish by concrete evidence that the structure was created by their own labour and expenditure.
The evidence coming to the fore in this context is as follows:
- Witness statements
- The building permit and other official documents
- Municipal records
- Agreements drawn up before a notary
- Invoices and payment records
- Cooperative records
The accounts of persons who were neighbours at the time the structure was built, or of the tradesmen who worked during its construction, are among the strong means of proof in practice.
On-Site Examination and Expert Examination
In these files the court for the most part conducts an on-site examination at the immovable property. During the examination a panel generally composed of technical experts is appointed. Depending on the nature of the dispute, a report may be obtained from the following specialists:
- Civil engineer
- Agricultural engineer
- Surveying expert (cadastral technician)
The surveying expert determines the position and boundaries of the structure; the civil engineer examines the technical characteristics, age and economic value of the structure. Where the improvement is in the nature of a tree or planted element, the assessment is made by the agricultural engineer.
Court Fees and Costs of the Proceedings
Actions concerning ownership of improvements are subject to a proportional court fee. In calculating the fee, however, it is not the value of the whole immovable property but only the value of the improvements whose ownership is sought to be determined that is taken as the basis.
Where the value of the improvements stated by the claimant at the outset proves to be higher following the examination by the court-appointed experts, it may be necessary for the shortfall in the fee to be made up.
The cost of the on-site examination, the experts’ fees, service costs and other expenses also arise throughout the proceedings. These items are as a rule charged to the party who is unsuccessful in the action.
Counsel’s Fees
Where the file is conducted through counsel, proportional counsel’s fees are awarded at the end of the proceedings in accordance with the Minimum Attorney Fee Tariff.
That said, where the respondents do not expressly oppose the claim regarding the improvements, or admit the action, they may not be held liable for counsel’s fees on the ground that they did not give cause for the action to be brought. By contrast, proportional counsel’s fees may be awarded against a respondent who argues for the dismissal of the action.
Appellate Remedies
Following service of the judgment of the Civil Court of First Instance, the process continues for the parties as follows:
- Appeal: An application may be made to the Regional Court of Appeal within two weeks of the date on which the judgment was served.
- Appeal on points of law: If the decision of the appeal chamber remains above the prescribed monetary threshold, it may be taken for review by the Court of Cassation within two weeks.
Requirement that the Judgment Become Final: Since actions concerning ownership relate to rights in rem over immovable property, the judgment of the court of first instance cannot be enforced until it has become final. Indeed, for the proceeds to be distributed in the file for the dissolution of co-ownership, that judgment is required to have become final.
Independent Legal Assessment
In disputes over improvements the factor determining the outcome is often not so much the legal argument as the state of the documents. Where the records showing on what date, at whose expense and from what sources the structure was financed and built are not gathered in time, the claim rests on witness accounts alone and its probative force is markedly weakened. Moreover, since the action proceeds in a race with the sale timetable in the connected file for the dissolution of co-ownership, neglecting interim measures of legal protection may produce consequences that are difficult to make good.
In a concrete file it is appropriate to address the following headings first:
- Bringing the action within the definite period granted in the file for the dissolution of co-ownership
- Raising in the statement of claim the request for an interim measure halting the sale or holding the proceeds
- Determining realistically the value of the improvements on which the fee is based, so as to prevent the risk of a shortfall in the fee
- Completing the constitution of the parties as regards all co-owners in cases of co-ownership in shares or joint ownership
- Placing the building permit, the municipal record and the payment documents on the file before the on-site examination
- Planning the timetable for the appellate remedies, bearing in mind that the judgment cannot be enforced until it has become final
Independent Legal provides advisory services and conducts litigation in disputes arising from ownership of immovable property, from the determination of ownership of improvements through to the conduct of the process for the dissolution of co-ownership.