A mortgage is a security created by recording in the land registry the immovable property offered by the debtor in order to assure the creditor that a debt will be paid. The entry made in the registry is not permanent; it is placed there to be removed once the debt has been discharged. The security need not relate only to claims that have already arisen. Claims that have not yet arisen but whose future existence appears certain or probable may also be secured in this way.
The principal advantage a mortgage affords the creditor emerges where collection does not take place: the pledged immovable is converted into money through compulsory enforcement and the claim is met out of the proceeds. As a rule, the consent of the spouse is not required for the creation of this powerful security. The legislature has, however, introduced an important exception to that rule. Where the immovable over which the mortgage is to be created has the character of a family residence, the validity of the transaction depends on obtaining the consent of the non-owner spouse.
Below, after touching briefly on the concept of the mortgage, we examine in which cases the consent of the spouse is mandatory, how the family residence is determined, the fate of a mortgage created without consent, and the case law of the Court of Cassation on the subject.
The Concept and Function of a Mortgage
A mortgage is the creation of a pledge over an immovable in order to secure a claim that already exists or a claim whose future existence appears certain or probable. As an instrument of security for the payment of a debt, this right arises as a rule through the entry made in the land registry; once the secured claim is paid, the entry is deleted from the registry.
The pledge confers on the right holder, should the claim not be paid, the power to have the immovable sold through the enforcement authorities. The creditor is satisfied first out of the sale proceeds, and any remaining amount is left to the debtor. Since the creation, removal, content and legal nature of a mortgage constitute a broad field in their own right, the explanations concerning the concept have been kept limited in this note. The details of the subject should be addressed under the heading What Is a Mortgage?
Is the Consent of the Spouse Required to Create a Mortgage?
As a rule, the consent of the spouse is not required for the creation of a mortgage right. The exception the law lays down to this rule is clear: where the immovable over which the mortgage is created has the character of a family residence, the consent of the spouse is mandatory for the transaction to be regarded as valid.
A further point must be emphasised at this stage. Where the mortgage is created not for the owner spouse’s own debt but for the debt of another, the consent of the other spouse is likewise required. This result rests on two provisions of the Turkish Code of Obligations No. 6098:
Turkish Code of Obligations No. 6098, Art. 584
“One of the spouses may stand surety only with the written consent of the other, unless a decision of separation has been given by a court or a legal right to live apart has arisen.”
Turkish Code of Obligations No. 6098, Art. 603
“The provisions concerning the form of suretyship, the capacity to stand surety and the consent of the spouse shall also apply to other contracts concluded by natural persons under another name for the giving of personal security.”
The conclusion to be drawn is this: where the owner creating the mortgage and the principal debtor are different persons, there is a suretyship mortgage, and the validity of that transaction is likewise dependent on the consent of the spouse.
The Concept of the Family Residence
The Turkish Civil Code No. 4721 does not define the family residence. In the statement of reasons for the Code, however, the concept is explained as “a place in which the spouses carry out all their living activities, according to which they shape their lives, in which they live through their bitter and their happy days, and which is filled with memories”.
In the decisions of the Court of Cassation, the family residence is characterised as “a legal institution set aside for the spouses to maintain their common life and securing the right of both parties to live in the same dwelling”.
Where an immovable acquires the character of a family residence, it is legally distinguished from other immovables. Over an immovable in respect of which a family residence annotation has been entered on the title deed record, the spouses have a joint say. The details of the concept and the annotation procedure form a subject to be examined under the heading What Is a Family Residence? How Is a Family Residence Annotation Entered?
The Express Consent Requirement for a Mortgage over the Family Residence
The fundamental provision on the subject is Article 194 of the Turkish Civil Code No. 4721:
Turkish Civil Code No. 4721, Art. 194
“Neither spouse may, without the express consent of the other, terminate the lease agreement relating to the family residence, transfer the family residence, or limit the rights over the family residence.”
The provision in question is mandatory in nature. The power of the spouse to give consent may not be waived in advance, nor may that power be set aside by an agreement the parties conclude between themselves.
The spouse who is the owner of the dwelling has no power to limit the immovable with a right in rem acting alone, in a manner that would render life there difficult. Such a limitation is possible only with the express consent of the other spouse. Since a mortgage is also a right that restricts the right of ownership, the creation of a mortgage over the family residence is dependent on the express consent of the non-owner spouse.
Article 194 of the Turkish Civil Code No. 4721 lays down no formal requirement of validity for the consent. Permission may therefore be given without being subject to any form, even orally; what is decisive is that the declaration be express. The burden of proving that such consent exists rests on the shoulders of the party disposing of the dwelling. In addition, consent must always be given for a specific transaction; a general consent covering all transactions to be carried out over the immovable is not regarded as valid.
It is possible for an annotation to be entered on the land registry to the effect that the dwelling in which the spouses live together is the family residence. The function of that annotation is declaratory, however, and not constitutive. That is to say, even where there is no family residence annotation in the registry, the immovable still bears the character of a family residence. Consequently, even in the absence of an annotation, the creation of a mortgage over the immovable remains dependent on the express consent of the non-owner spouse.
Invalidity of a Mortgage Created Without Consent
We explained above that the consent of the non-owner spouse is required before a mortgage may be created over the family residence. A mortgage created without that consent is invalid. The spouse whose consent is required may, by bringing an action for the removal of the mortgage, have the pledge entry deleted from the registry. In the practice of the Court of Cassation, the absence of consent is treated as an absolute ground for removal and the pledge is struck off on that ground alone.
In its decision of 6 December 2017, docket No. 2017/2-2934 and decision No. 2017/1556, the Assembly of Civil Chambers of the Court of Cassation made the following assessment:
“…Accordingly, since there is no impropriety in the decision of the local court to remove the mortgage on the ground that a mortgage was created, contrary to Article 194(1) of the Turkish Civil Code No. 4721, over an immovable whose character as a family residence is beyond doubt and without the knowledge and approval of the claimant wife, the decision of insistence in this respect is well founded.”
In actions for removal founded on the assertion that the mortgage was created without obtaining the consent of the other spouse, subject-matter jurisdiction lies with the Family Court.
No statute of limitations runs in this action. The non-owner spouse may request the removal of the mortgage for as long as the mortgage right over the immovable continues to exist. The details of the conduct of the action are the subject of the heading Action for the Removal of a Mortgage.
Practice in the Light of Court of Cassation Decisions
According to the settled approach of the higher court, where there is a spouse whose consent has not been obtained, the pledge over the family residence does not acquire validity.
In its decision of 7 December 2021, docket No. 2018/2-1094 and decision No. 2021/1616, the Assembly of Civil Chambers addressed the subject as follows:
“Although it may be thought that the mortgage transaction does not directly prevent the enjoyment of and residence in the family residence, the express consent of the other spouse is essential to the mortgage transaction because of the danger that the family residence may be disposed of through bad-faith and simulated transactions of the spouse holding the right. Within the framework of the rules explained above, it is likewise of no importance that the mortgage transaction constitutes security for a housing loan relating to the immovable at issue, which is used as the family residence. Since Article 194(1) of the Turkish Civil Code No. 4721 requires the express consent of the non-owner spouse even in such a case, it is impossible to accept that a transaction carried out without obtaining express consent is valid.
…
Turning to the concrete case within the framework of the explanations made, it is understood that the immovable at issue has been used as the family residence since the date on which it was purchased, that the owner spouse among the respondents had a mortgage created over the family residence at issue in favour of the other respondent, the bank, and that the express consent of the non-owner claimant spouse was not obtained by the respondent bank during that transaction. At this point it is beyond dispute that the good faith defence of the respondent bank, which is required to act as a prudent merchant, cannot be entertained. Accordingly, since the mortgage transaction created over an immovable whose character as a family residence is beyond doubt, without obtaining the express consent of the claimant and contrary to Article 194(1) of the Turkish Civil Code No. 4721, has no binding force, the dismissal of the action by the court was not in conformity with the purpose of that article and required the decision to be quashed.”
Where the owner spouse has created a mortgage without obtaining the consent of the other and has subsequently died, the action for the removal of the mortgage must be directed against the heirs of the deceased spouse.
The 2nd Civil Chamber of the Court of Cassation emphasised this point as follows in its decision of 12 April 2022, docket No. 2022/1233 and decision No. 2022/3511:
“The claimant asserted that the immovable at issue was the family residence and that a mortgage had been created over the immovable by her deceased spouse without her express consent being obtained, and requested the removal of the mortgage ( Turkish Civil Code No. 4721 Art. 194 ); the court allowed the action and ordered the removal of the mortgage placed on the immovable at issue. … The parties to the action, the interveners and the other persons concerned in the proceedings have the right to be heard in connection with their own rights. … For these reasons, it was not correct to give a decision with a defective respondent party, where it was necessary to join the heir of the deceased spouse of the claimant to the action, to constitute the parties, then to collect the evidence if any was adduced and to give a decision after evaluating the available evidence; this required the decision to be quashed.”
According to a further decision of the Court of Cassation on the constitution of the parties, the action must be directed jointly against both the person in whose favour the mortgage was created and the owner spouse who created the mortgage without obtaining consent.
The decision of the same chamber of 29 June 2021, docket No. 2021/3262 and decision No. 2021/5448, is to the following effect:
“The action was brought solely against the cooperative in whose favour the mortgage was created. Since it is asserted that the dwelling is the family residence and the removal of the mortgage created without obtaining the express consent of the claimant spouse is sought, and since the action has been brought by the spouse whose consent is required, the other party to the mortgage agreement whose removal is requested must also appear in the action as a respondent. In this respect, it was contrary to procedure and to the law to render judgment upon a defective respondent party and a defective examination, where an appropriate period should have been granted to the claimant to join to the action her spouse, who holds a right over the dwelling and constitutes the other party to the mortgage agreement, her evidence should have been collected if she was joined to the action and adduced it, and the matter should have been brought to a conclusion after the parties had been constituted in this way; this required the decision to be quashed.”
An action for removal brought against a mortgage that is invalid for want of consent does not become devoid of purpose upon the death of the spouse. The fact of death cannot be accepted as conferring legality on a transaction that was invalid from the outset.
The chamber explained the subject with the following reasoning in its decision of 17 November 2020, docket No. 2020/2264 and decision No. 2020/5803:
“In the concrete case, on the date the action was brought there existed a mortgage placed in favour of the respondent bank over an immovable that had passed to the claimant and her children by way of inheritance, and the surviving claimant spouse brought an action asserting that the mortgage was invalid. If, as asserted, express consent was not obtained, it is clear that this mortgage transaction is invalid. Accordingly, in cases where it is accepted that there is no valid transaction, it is inconceivable that the death of the owner spouse should confer legality on that transaction. In other words, a transaction that is dead cannot be revived. The surviving spouse has rights in the capacity of heir ( Turkish Civil Code No. 4721 Articles 240 and 652 ), and the legal interest the claimant had at the time she brought this action continues after the death of the respondent spouse during the proceedings as well. In addition, there is still a mortgage whose invalidity is asserted. For these reasons, although the marriage has come to an end by death, it is not possible to say that the action has become devoid of purpose. The contrary view would, without allowing any inquiry into whether the claimant is right in her action, result in the immovable being sold through compulsory enforcement, and this would lead to substantial losses of rights ( Court of Cassation Assembly of Civil Chambers, docket No. 2017/2-2906, decision No. 2017/1723 ). For the reasons explained, it was not correct to decide that there was no need to render a decision on the ground that the action had become devoid of purpose owing to the death of the respondent spouse M. K., where it was necessary to evaluate together the evidence in the file as to whether the immovable at issue was being used as the family residence on the date the mortgage transaction was created by the claimant and her spouse M. K. and whether her express consent had been obtained, and to give a decision according to the result; this required the decision to be quashed.”
Independent Legal Assessment
In these disputes the risk does not lie with the owner spouse alone. The Court of Cassation requires express consent even for mortgages created as security for a housing loan, and it does not entertain the good faith defence of a credit institution that is expected to act prudently. For that reason, investigating before the transaction whether the immovable is in fact used as a family residence is a decisive step for the party taking the security as well. The absence of an annotation on the title deed does not remove that duty of investigation.
From the perspective of the non-owner spouse, it is apparent that the action is lost on the procedural side rather than on the merits. Defective constitution of the parties is one of the most frequent reasons for a decision being quashed. In a concrete file, the following headings should be assessed first:
- Establishing, by means of invoices, address registration records and witness statements, that the immovable was used as the family residence on the date the mortgage was created
- Directing the action jointly against both the mortgage creditor and the owner spouse who created the mortgage
- Where the owner spouse has died, completing the constitution of the parties by joining the heirs to the action
- Verifying whether the consent said to have been given was specific to a particular transaction
- Examining whether the mortgage has the character of a suretyship mortgage and whether Articles 584 and 603 of the Turkish Code of Obligations No. 6098 come into play
- Taking into account that subject-matter jurisdiction lies with the Family Court and preparing the statement of claim accordingly
Independent Legal provides advisory services and litigation representation in the preparation and conduct of actions for the removal of a mortgage in disputes arising from security transactions created over the family residence.