The action for correction of the land share is a remedy resorted to where the land shares allocated to the independent units upon the establishment of condominium ownership or construction servitude have not been determined in proportion to the true values of those units. As a result of the action, ratios that have been wrongly determined are redetermined in conformity with the law and the condominium owners’ right of ownership is secured.
In practice it is a frequent occurrence for the shares to be distributed equally without regard to the value of the independent units, for ratios inconsistent with the architectural project to be fixed, or for the calculation to be made erroneously from the outset. The price of these errors is for the most part paid years later, and particularly during the urban transformation process; serious losses of rights emerge at the allocation stage. The accurate determination of the land share is for that reason of decisive importance for the fair sharing of the economic value of the property.
Below we examine, with an eye to practice, the conditions of the action for correction of the land share, the course of the proceedings, the parties to the action, the regime applicable as to time limits and the rules on subject-matter and territorial jurisdiction.
The Concept of the Land Share
The land share denotes the share allocated, upon the establishment of condominium ownership or construction servitude, to each independent unit in the land on which the main property stands, in proportion to the value of that unit. Put another way, the land share shows that the owner of a flat or business premises holds a right, in a specified proportion, not only in its own independent unit but also in the land on which the building stands.
This concept is one of the load-bearing elements of the system of condominium ownership. That is because the ratio of the land share performs a decisive function in a great many matters, such as;
- Participation in common expenses,
- Voting rights in management decisions,
- The apportionment of the insurance sum
- The reconstruction of the property
- The allocation of independent units in urban transformation
and others. For that reason the correct determination of the share is a critical threshold for ensuring that owners do not suffer a loss of rights and that the economic value of the property is shared fairly.
The Legal Definition of the Land Share
Sub-paragraph (d) of Article 2 of the Condominium Ownership Act No. 634 defines the land share as the share of common ownership allocated to the independent units. That share may not be transferred separately from the independent unit; it is an inseparable component of it.
Condominium Ownership Act No. 634, Art. 2(d)
“Land share: means the shares of common ownership in the land allocated to the independent units in accordance with the principles laid down in this Act.”
As is apparent from the definition, the land share is a legal share showing that the owner of an independent unit also holds a right of ownership in a specified proportion in the land. In that respect it is accepted as one of the fundamental elements of the scheme of condominium ownership and construction servitude.
The land share is determined both at the construction servitude stage and at the condominium ownership stage. Upon the establishment of construction servitude the shares are fixed for the independent units that are to come into existence in the future; with the passage to condominium ownership those ratios become definitive. The land share is therefore an element that cannot be considered separately from ownership of the independent unit and that delimits the scope of the right of ownership.
How Is the Land Share Determined?
Pursuant to Article 3 of the Condominium Ownership Act No. 634, the land share is determined in proportion to the value of each independent unit. The criterion here is not square metres alone; the value of the independent unit as a whole must be taken as the basis.
Within the framework of that article, the position and characteristics of the unit are taken into account in determining the share. Within that scope, objective criteria such as;
- The area of use of the independent unit,
- The floor on which it is situated and its position,
- Its façade and view,
- Its purpose of use (whether residential or business premises)
- The sunlight it receives and similar features
are taken into consideration.
By way of example, if one of two flats of the same size is situated on an upper floor, faces a more favourable façade or is in a more valuable position, its economic value will be higher and its land share must accordingly be greater. As can be seen, the determination of the share is not merely a technical calculation but an assessment process founded on the principles of equity and balance.
Where the share does not reflect the true value of the independent unit, the condominium owners may bring an action for correction.
What Is an Action for Correction of the Land Share?
This action is brought where the shares allocated to the independent units upon the establishment of condominium ownership or construction servitude have not been determined in proportion to their true values. The aim is that ratios formed erroneously or contrary to equity be redetermined in conformity with the law.
In some properties the shares are seen to have been distributed equally with no regard at all to the value of the units, and in others ratios not reflecting reality have been entered on the land registry because of technical errors. In such cases owners whose share has been fixed too low may face serious losses, particularly during the reconstruction of the building or the urban transformation process. The action for correction is for that reason an effective legal instrument protecting the right of ownership.
The Legal Basis of the Action
The basis of the action for correction is the provision contained in Article 3 of the Condominium Ownership Act No. 634, which requires the land share to be determined in proportion to the value of the independent units. The legislature has adopted the economic value of the independent unit as the fundamental criterion in determining the share, and has thereby sought the fair distribution of the rights over the property.
Within that framework, the fundamental principles on which the action rests are as follows:
- Condominium Ownership Act No. 634, Art. 3: The land share must be determined in proportion to the value of the independent units.
- The link between the land share and the value of the independent unit: A higher share must be allocated to a unit of higher value.
- The principle of equity and balance: The rights and obligations of the owners over the property must be determined fairly.
By virtue of these principles, where the shares do not reflect the true value of the independent units, the condominium owners may apply to the court with a claim for correction.
Conditions of the Action
For the action for correction to be brought, the shares must have been determined disproportionately to the true values and that situation must be established in concrete terms. Not every difference in shares constitutes a ground of action. For that reason the courts examine with particular care whether there is a manifest disproportion and a breach of equity in the determination of the shares.
In practice a number of conditions are required to be satisfied together for the action to be upheld. These conditions, which have taken shape through the case law of the Court of Cassation, are explained below under separate headings.
The Land Share Being Disproportionate to the Value of the Independent Unit
The fundamental condition of the action is that the land share does not correspond to the true value of the independent unit. Since Article 3 of the Condominium Ownership Act No. 634 requires the share to be determined in proportion to the value of each unit, the existence of a manifest inconsistency between share and value opens the way to the action.
For example, where one of several independent units of similar character and size has been given a markedly lower share than another, or where a lower ratio has been fixed for a more valuable unit, that picture may be made the subject of an action for correction.
The Existence of a Clear and Manifest Injustice
Small differences between the shares are not regarded as sufficient in themselves to bring an action. The courts review whether the difference creates a clear and manifest injustice. In other words, not every disproportion is treated as a ground of action; it is only where there is a serious imbalance contrary to equity that an action may be brought.
In conducting that review, the position, size, purpose of use and economic value of the independent units are considered together. If the difference remains within reasonable limits the action may be dismissed; where, on the other hand, equity has manifestly been impaired, the correction of the shares may be ordered.
The Error Existing at the Date Condominium Ownership Was Established
The values to be taken as the basis in an action for correction are the values as at the date on which condominium ownership or construction servitude was established. For that reason, the fact that an independent unit has subsequently gained or lost value is not in itself sufficient for the share to be altered.
According to the case law of the Court of Cassation, whether the share has been wrongly determined is assessed by reference to the circumstances obtaining at the moment condominium ownership or construction servitude was established. Developments such as renovations carried out subsequently, transformations in the surroundings or an increase in the value of the property do not therefore constitute a ground for correction in themselves.
The following may be given as examples of situations not regarded as a ground of action in themselves:
- Renovations subsequently carried out in the independent unit
- The property gaining in value by reason of changes in the surroundings
- A view or an advantage of use arising subsequently
- An increase in the economic value of the district
The practice of the Court of Cassation takes as its basis, in assessing whether the share is erroneous, the circumstances obtaining at the date on which condominium ownership or construction servitude was established.
The Position as to Time Limits
No special statute of limitations or preclusive period is provided for by the Act in respect of the action for correction. The action may be brought for as long as the condominium ownership or construction servitude subsists.
That said, there is an important point that must not be overlooked, particularly in urban transformation processes.
The following points are of importance:
- Condominium ownership comes to an end upon the demolition of the building
- Once condominium ownership has come to an end, it may become difficult to bring an action founded on the land share
- For that reason the action should so far as possible be brought before the demolition
- In practice, carrying out the on-site examination before the demolition is often decisive
Accordingly, where the shares are thought to be erroneous, bringing the action without delay is important for preventing a loss of rights.
Who May Bring the Action?
The action may be instituted by persons who suffer harm from the inequality in the land shares or who have a legal interest in that inequality being remedied. Within the framework of the Condominium Ownership Act No. 634 and the case law of the Court of Cassation, the persons who may hold the capacity of claimant are as follows:
Condominium Owners
The condominium owners who are the current owners of the independent units in the building are entitled to seek the correction of the share. An owner who considers that its own share has been fixed too low may bring an action, as may an owner who contends that another owner’s share is unjustifiably high and that this affects its own right.
Holders of Construction Servitude
Where construction servitude has been established in the land registry in respect of buildings still under construction or for which no occupancy permit has been obtained, the holders of shares may likewise request a correction. Since the error in the share for the most part arises at the very outset of the project, the early exercise of this right by the holders of construction servitude is critical for preventing losses that would otherwise arise later.
The New Owner Who Purchases Subsequently
One of the questions most often asked in practice is the following: may a person who knowingly purchases an independent unit with its existing land share bring an action?
- The answer is in the affirmative. According to the settled practice of the Court of Cassation, an owner who subsequently acquires the property succeeds to the rights of the previous owner. Since the disproportion in the land share constitutes an infringement of the right of ownership, the new owner may at any time seek the correction of that error in the land registry.
Heirs
In the event of the death of a condominium owner, the heirs are entitled, upon obtaining a certificate of inheritance, to bring this action or to continue an action already brought.
Against Whom the Action Is to Be Brought (Standing)
The correct identification of the respondent party in an action for correction is of vital importance for the fate of the action. Since the judgment will bring about a change in the land registry record, everyone whose right of ownership is affected must be joined to the proceedings.
The Action Must Be Brought Against All Condominium Owners
Land shares are like interdependent parts of a whole; when one owner’s share increases, the shares of the others must technically change. For that reason the action must be directed against all owners of independent units other than the owner seeking the correction of its share. If there are fifty flats in the main property and the owner of one flat brings an action, all forty-nine remaining owners must be named as respondents.
Compulsory Joinder of Parties
In legal language this picture is termed “compulsory joinder of parties”. The court may not examine and rule on the merits of the matter unless all the shareholders on the land registry have been joined to the action.
- If even a single owner remains who has not been named as a respondent, the court grants time for the deficiency to be remedied.
- It is not possible for the action to be concluded on the merits before that deficiency has been made good.
An Action Cannot Be Brought Against the Manager Alone
One of the errors most frequently fallen into in practice is naming the management of the apartment block or estate as the party to be addressed.
It must not be overlooked that: the land share is in the ownership not of the management but of the owners, whether natural or legal persons. An action brought solely against the manager or the management is dismissed on the ground of a want of standing.
Change of Hands of the Property During the Proceedings
How to proceed where, while the action is pending, one of the respondent owners transfers its flat is a separate problem.
- In such a situation there is a transfer of the res litigiosa, that is to say of the subject matter of the action.
- The claimant must join the new owner to the action or direct its action against that owner. Where that step is not taken, the course of the proceedings is disrupted.
Note: Obtaining an up-to-date title deed record and certificate of encumbrances immediately before the action is brought, so as to confirm the list of owners, is the soundest step to be taken at the outset of the process. It must not be forgotten that, where there are deceased owners, their heirs will also have to be joined to the action.
The Regime of Time Limits in the Action
The question of time limits in an action for correction of the land share differs from that in other types of action, because the claim is founded on the right of ownership.
No Preclusive Period or Statute of Limitations Is Provided For
As a rule there is no statute of limitations or preclusive period laid down in the Act for bringing this action. For as long as the right of ownership subsists, the correction of errors in the shares in a property subject to condominium ownership or construction servitude may be sought at any time.
Time Elapsed Since the Establishment of Condominium Ownership
The fact that the building was constructed ten, twenty or forty years ago constitutes no impediment to bringing an action. What is decisive here is that the error has existed from the very moment the construction servitude or condominium ownership was established. Recourse may be had to the courts at any time against that initial error in the determination of the shares.
The Position of the Owner Who Purchases Subsequently
A person who purchases the property with its existing land share is not deemed to have accepted the error in the land registry record. The new owner may, from the moment it learns of the error or at any time of its choosing, exercise all the rights of action held by the previous owner. Nor is there any restriction of time running from the date of purchase.
The Rule of Good Faith and Exceptional Cases
Although no time limit is laid down by law, the Court of Cassation may in certain particular situations carry out an assessment within the framework of Art. 2 of the Turkish Civil Code No. 4721 (the rule of good faith).
For instance, where an owner has personally signed the document determining the shares, or has specifically requested that the ratios be formed in that way, the bringing of an action decades later alleging the existence of an error may, in certain concrete cases, be construed as an abuse of right. That assessment is, however, made separately for each file; the general rule is that no time limit applies.
The Course of the Proceedings
Actions for correction of the land share are subject to proceedings that call for technical examination and in which the rules of procedure are applied with care. In order to establish whether the shares are proportionate to the true values of the independent units, the court for the most part orders an on-site examination and an examination by a court-appointed expert.
In that respect these actions are among the disputes requiring not merely legal but also technical assessment.
Is Mediation a Procedural Requirement?
Although the question of mediation in the action for correction of the land share is debated in the doctrine, it is accepted in practice that recourse to mediation is a procedural requirement for this type of action.
It is therefore important that the mandatory mediation process be conducted and completed before the action is brought. Otherwise there is a risk that actions brought without recourse to mediation will be dismissed on procedural grounds for want of a procedural requirement.
The Court with Subject-Matter and Territorial Jurisdiction
The correct identification of subject-matter and territorial jurisdiction is of great importance in this action. An action brought before the wrong court may lead to a loss of time and to dismissal on procedural grounds.
In this action:
- Court with subject-matter jurisdiction: the Civil Court of Peace (Condominium Ownership Act No. 634, Art. 33).
- Court with territorial jurisdiction: the court of the place where the property is situated.
In actions relating to rights in rem over immovable property the rule of territorial jurisdiction is exclusive. The parties may not therefore agree to have the action heard before the court of another place.
Court Fees and Litigation Costs
The accurate determination of fees and costs is likewise part of the process. Since these actions generally bear a character relating to rights in rem over the immovable property, the levying of fees is carried out according to the nature of the action.
Within that scope:
- Court fee: in practice a fixed fee is for the most part levied. (A claim for correction of the land share bears the character of a registration and correction.)
- Litigation costs: the fees of the court-appointed expert, the costs of the on-site examination and service costs are met in advance by the claimant.
- Attorney’s fees: where the action is upheld, the statutory attorney’s fee awarded by the court is collected from the respondent.
In these files the costs of the court-appointed expert and of the on-site examination in particular make up a significant portion of the total litigation costs.
Proof and Examination by a Court-Appointed Expert
The principal instrument of proof in an action for correction is the examination by a court-appointed expert. On the technical question of the determination of value, the judge has recourse to expert opinion and for the most part appoints a panel of experts composed of more than one specialist.
The examination generally follows these steps:
- Determination of value: the experts establish the value of the independent units by reference to the economic and technical conditions obtaining at the date the building was constructed.
- Examination of the project: the approved architectural project, the building permit and the land registry records held by the municipality are called into the file and scrutinised.
- Conducting an on-site examination: the court carries out an on-site examination at the place where the property is situated and reviews whether the technical data correspond to the actual position.
For that reason the expert report is, in actions for correction of the land share, the strongest item of evidence determining the outcome of the proceedings.
The Importance of the Preservation of Evidence in the Urban Transformation Process
Actions for correction arise in practice for the most part together with the urban transformation process. In buildings in respect of which a determination of risky structure has been made in particular, the view that the shares do not reflect reality gives rise to the need to bring an action before the demolition process begins.
There is, however, a significant risk in the urban transformation process: the demolition of the building.
The Risk of the Evidence Being Lost
In this action the court has an on-site examination and an examination by a court-appointed expert carried out in order to determine the value of the independent units. The panel of experts reports on the façade of the flat, its view, whether it receives sunlight and its betterment value by observing these matters personally on site.
If the building has been declared a risky structure and the demolition process has begun, the disappearance of the building while the action is pending renders that technical examination impossible in practice. In other words, the most important items of evidence that could be used in the action may be destroyed along with the demolition.
Preservation of Evidence Through a Miscellaneous Proceedings File
For that reason, where the shares are thought to be erroneous, it is of great importance that recourse be had to the preservation of evidence pursuant to Article 400 of the Code of Civil Procedure No. 6100, so that the evidence is safeguarded before the building is demolished. The preservation of evidence is a facility enabling the existing position to be examined on site by the court and placed on record for use in an action to be brought later.
By way of an application for the preservation of evidence made to the civil court of peace;
- The current condition of the property,
- The position and characteristics of the independent units,
- The correspondence between the architectural project and the actual position
- The factors affecting the value of the independent units
may be established before the court through a court-appointed expert.
Having regard to the speed with which the demolition process advances following a decision declaring a risky structure, it is decisive, for the prevention of a loss of rights, that persons seeking a correction make an application for the preservation of evidence without delay.
An Important Point in Practice
An approach along the lines of “the demolition order has been issued, there is no point bringing an action now” is not sound. The preservation of evidence file safeguards rights by placing on record the technical features and current condition of the building, and may be used as one of the strongest items of evidence in an action to be brought later.
Independent Legal’s Assessment
In land share disputes two elements stand out as determining the fate of the action: timing and the constitution of the parties. Although the absence of any time limit in the Act creates a sense of ease that the action may be brought whenever one wishes, the reality in practice is different. Upon the demolition of the building both the condominium ownership and the physical data underpinning the determination of value disappear; for that reason the room for manoeuvre is in practice narrowed in properties that have entered the risky structure process.
The second critical heading is compulsory joinder of parties. In buildings containing a large number of independent units, the complete identification of the owners, the ascertainment of the heirs of deceased owners and the monitoring of transfers occurring during the proceedings are preconditions for the file being able to proceed to the merits.
In a concrete file the following headings should be addressed as a matter of priority:
- Establishing, by means of the project and the land registry records, that the error existed at the date the construction servitude or condominium ownership was established
- Assessing in advance whether the disproportion crosses the threshold of a “clear and manifest injustice”
- Identifying all owners and heirs by reference to an up-to-date title deed record and certificate of encumbrances
- Completing the mandatory mediation process before the action is brought
- Making an application for the preservation of evidence without delay, pursuant to Art. 400 of the Code of Civil Procedure No. 6100, in properties in respect of which a risky structure decision exists
- Monitoring transfers occurring during the proceedings and joining the new owners to the action
Independent Legal provides advisory services and conducts litigation at every stage of disputes arising from condominium ownership, from the technical and legal review of land shares through to the preservation of evidence and the conduct of the proceedings.