A product of shanty housing and of the zoning amnesty legislation, the title deed allocation certificate is a document issued by the administration that grants persons meeting certain criteria the possibility of using the property in fact, together with the prospect of being able to seek registration in the future. Contrary to the widely held popular belief, this certificate does not as a rule take the place of a title deed and does not by itself create ownership.
It would nonetheless be wrong to say that the certificate carries no weight in the legal order. The allocation certificate performs a decisive function as regards who is to be treated as the rightholder, whether the factual use is to be protected, the fate of informal transfers and, ultimately, the outcome of a request for registration. Indeed, the municipality allowing the transfer procedure to drag on, competing claims to entitlement and requests for registration based on the certificate are among the disputes most frequently brought before the courts.
Below we examine in detail the legal character of the certificate, the possibilities it affords its holder, its transfer to third parties and its devolution to heirs, the conditions that must be met for it to be converted into title, and the action for annulment of title deed and registration founded on that basis.
What Is a Title Deed Allocation Certificate?
The certificate in question is the product of an administrative act issued, within the framework of the zoning amnesty and shanty housing legislation, to persons possessing the qualities required by the legislation; it allows the property to be used and creates an expectation of registration in the future. Behind the certificate lies a legislative choice aimed at transferring certain places that have in fact been used for years to their users on specified conditions.
Although in practice the certificate is often treated as if it were a title transaction, the legal position is different: an allocation certificate is not a title deed creating a right in rem. Even so, it can produce serious consequences in establishing entitlement, in the legal recognition of the use, and in the process of moving to registration.
Why the Certificate Came into Being
The practice of allocation certificates emerged as part of the search for a solution to the problems created by unregulated urbanisation and the accumulation of shanty housing. The aim is to clarify, within certain criteria, the legal status of properties that have been used in fact for decades, and to lay down rules for the route by which their users may obtain title.
To that end, the intention was to issue certificates to persons meeting the qualities laid down by the legislation and thereby to bring the use of the property onto the official records.
Connection with the Zoning and Shanty Housing Legislation
The certificate is an institution intertwined with the zoning amnesty and shanty housing legislation. Conferring, under certain conditions, a legal status upon the stock of buildings that came into being contrary to the zoning legislation constitutes the basic rationale of the practice.
For this reason the subject does not remain within the bounds of property law alone; it also directly concerns the fields of zoning law and administrative law.
Legal Nature of the Certificate
The title deed allocation certificate is a document established by the administration and administrative in character. It does not confer ownership on its holder; it creates only a right and an expectation of being able to seek registration, subject to certain conditions arising.
In this respect the certificate differs from a title deed conferring a right in rem, and is characterised as a special certificate of entitlement bearing the character of an administrative act.
Does the Certificate Create a Right of Ownership?
As a rule, no. The person holding the certificate does not become the registered owner of the property; once the conditions required by the legislation are fulfilled, he comes into a position to request that title be issued to him.
Three findings may therefore be made as regards the certificate: it does not by itself result in the acquisition of ownership, it confers no power in the nature of a right in rem, and it does not assume the function of a title deed.
At the same time, the certificate provides a strong legal foundation for establishing entitlement and in the process of moving to registration.
The Legislation on Which It Is Founded
The principal statutory basis of the certificate is Act No. 2981 on Certain Procedures to Be Applied to Structures Contrary to the Zoning and Shanty Housing Legislation. The present framework of the practice is not, however, confined to that Act; it has been shaped jointly by the case law of the Court of Cassation and the Council of State, by the legislation on the zoning amnesty, and by the legislation setting out the allocation process in detail.
While the decisions of the Council of State chiefly bring to the fore the administrative-act aspect of the certificate, the decisions of the Court of Cassation discuss its effect in private law disputes.
What the Certificate Affords Its Holder
Although it does not create ownership, the allocation certificate offers its holder some noteworthy legal advantages. The weight of the certificate in practice is considerable as regards the protection of the factual use of the property, the determination of who is to be treated as the rightholder, and the process by which title may later be issued.
The limits of these possibilities are not fixed, however; they may vary according to the circumstances of the concrete case, the relevant provisions of the legislation and the acts established by the administration.
The Power to Use the Property
The certificate affords its holder the possibility of factual use of the property. Within this framework the person may benefit from the property, keep a structure upon it and maintain his factual control. That power cannot, however, be equated with ownership.
Effect on the Expectation of Registration
The certificate creates a legally protected expectation that, once the conditions arise, the property may be transferred to the rightholder. A person who meets the criteria laid down in the legislation may, relying on that expectation, request the administration to issue a title deed. Conversely, the existence of the certificate does not of itself result in title being issued.
Whether It May Be Invoked Against Third Parties
In some disputes the certificate may be used as a basis for proving entitlement and factual use. Since there is, however, no right in rem registered in the land registry, the protection it offers against third parties remains limited. For this reason the legal position of the parties and the particular circumstances of the case must also be weighed separately.
Transfer of the Certificate and Its Devolution to Heirs
A significant proportion of the disputes concerning allocation certificates arise from the transfer of the entitlement to third parties and from its passing to the heirs upon death. The informal changing of hands of the properties covered by the certificate over the years, the leaving of the use to another person, and the de facto division of the property among the heirs are the principal factors increasing the number of disputes.
Even though the certificate creates no ownership, the use and entitlement attached to it have an economic value; for this reason they are in fact made the subject of transfer transactions. It would nevertheless be wrong to equate the legal nature of those transactions with the sale of a registered immovable property.
May the Certificate Be Transferred?
Since the certificate does not directly confer ownership, there can be no question of an official sale and conveyance of ownership at the land registry directorate. Despite this, the power of use and the expectation of entitlement attached to the certificate do change hands in practice by various means. Transfer of possession, the drawing up of a letter of consent, contracts concluded before a notary and informal deeds of sale are foremost among these means. The transactions listed are not regarded as an official transfer of title; in terms of their effects they most often amount to the transfer of the factual use and of the expectation of registration.
In the practice of the Court of Cassation, the changing of hands of the rights arising from an allocation certificate is treated within the scope of the provisions on the “Assignment of Claims” (Turkish Code of Obligations No. 6098, Art. 183). Accordingly, written form is sufficient for the validity of the transfer; execution before a notary or at the land registry is not a condition of validity but merely facilitates proof.
Transfer of the Right Arising from the Certificate
Although the allocation certificate confers no ownership, it produces a right and an expectation of being able to seek title once the conditions arise. In practice this right and expectation are seen to be transferred to third parties by various transactions.
The Court of Cassation as a rule assesses such transfers within the framework of the provisions of the Turkish Code of Obligations No. 6098 on the assignment of claims; it therefore regards written form as sufficient for the transfer of the rights and claims attached to the certificate. Among the instruments most frequently resorted to in practice are documents evidencing the transfer of possession, letters of consent, texts drawn up before a notary and simple written contracts. Since the certificate creates no right in rem, the transaction carried out does not produce the same legal effect as the sale of a registered immovable property. There is accordingly no obligation to effect the transfer in official form, and the transfer of the right in written form is accepted as sufficient in most cases.
The Position of the Heirs upon Death
The use and entitlement attached to the certificate may devolve to the heirs upon the death of the rightholder. In practice it is frequently seen that the heirs come forward with claims over the property that the deceased used in fact.
Where there is more than one heir, the principal points giving rise to dispute are the following: the proportions in which the shares are to be determined once the property is converted into title, by whom and how the application for entitlement is to be made, in whose hands the factual use lies, and how the power of use is to be divided among the heirs. For this reason the administrative records, the state of the factual use and the certificate of inheritance carry decisive weight in practice.
Transfer of the Factual Use
One of the most common pictures in the practice of allocation certificates is that the power of use is left to another person. The use of the property by third parties over many years, the erection of a structure upon it or its economic exploitation prepare the ground for the emergence of different claims of right.
The transfer of use and the transfer of ownership are not, however, the same thing. A transfer of use effected in reliance on an allocation certificate does not by itself result in the acquisition of ownership of the property.
Conditions Required for Conversion into Title
The fact that the allocation certificate does not by itself create ownership means that the existence of the certificate is not regarded as sufficient for registration. For the property to be recorded in the register in the name of the rightholder on the basis of the certificate, a number of conditions accepted in the legislation and in the case law must be fulfilled together.
In the practice of the Court of Cassation three points in particular stand out: that the property has become suitable for registration in terms of the zoning plan, that the allocation price has been paid, and that the conditions of entitlement have continued without interruption.
Completion and Finalisation of the Rehabilitation Zoning Plan
The first requirement for a property covered by a certificate to be converted into title is that a rehabilitation zoning plan has been drawn up and has become final in the area where it is situated.
Since the certificates are for the most part issued within the scope of shanty housing and zoning amnesty measures, which parcel the property will fall within and which part may be made the subject of private ownership emerge only with the zoning plan. For this reason, registration directly in the name of the rightholder is as a rule impossible before the legal position of the property is clarified, before the parcelling operations are concluded and before the rehabilitation zoning plan is drawn up.
The Property Forming a Parcel Suitable for Registration
The place covered by the certificate must form, in the zoning plan, a parcel of such a nature that it can be registered in the name of the rightholder. Where the property falls within areas set aside for public services, the direct issue of a title deed is as a rule not possible.
It would therefore be wrong to say that the holder of a certificate may seek title in every case. The use designation of the property in the zoning plan and its legal status are examined separately in each case.
Payment of the Allocation Price in Full
For title to be sought on the basis of the certificate, the whole of the allocation price determined under the legislation must have been paid. Among the principal reasons why transfer transactions come to nothing in practice are the failure to deposit adjustment differences, the inability to obtain the documents relating to payment, and the price having been paid only in part. It is therefore important that payment documents be preserved and kept in a state in which they can be submitted to the administration or to the court when required.
Continuation of the Conditions of Entitlement
For title to be obtained on the basis of the certificate, its holder must continue to possess the qualities of entitlement laid down in the legislation. In practice four matters carry weight in this respect: that the property has not been transferred to third parties contrary to the legislation, that no untrue declaration has been made during the application process, that no fact terminating the entitlement has occurred, and that the factual use of the property has continued without interruption.
If one of these conditions subsequently ceases to exist, the administration may reject the request for transfer, and this in turn gives rise to various legal disputes.
The Administration Avoiding the Transfer
The existence of the certificate and the fulfilment of the conditions for conversion do not mean that the property will in every case be recorded in the register in the name of the rightholder. In practice it is frequently seen that, even where the necessary conditions have been met, the municipality or the administration concerned does not complete the transfer procedures. The following factors generally lie behind this: administrative hesitation as to the legal position of the property, the failure to conclude the examinations of entitlement, the failure to finish the parcelling operations and the failure to complete the zoning measures.
In such cases the administration establishes no act without giving an express decision of rejection, and thereby avoids the transfer in fact. A certificate holder who considers that the conditions necessary for conversion have arisen may apply to the municipality or administration concerned and request that the property be registered in his name.
Where the application is left unanswered, or where the transfer procedures are still not carried out, recourse to the courts arises. At this stage an action for annulment of title deed and registration based on the allocation certificate is one of the legal instruments most often chosen.
Action for Annulment of Title Deed and Registration (Civil Courts)
Where all the conditions listed above — the plan, the price and suitability for registration — have been fulfilled and yet the administration avoids issuing the title deed, the action to be brought by the rightholder is an action for annulment of title deed and registration. What is sought here is not the setting aside of an administrative act but the direct establishment of ownership. For this reason the dispute is resolved not in the administrative courts but in the civil courts.
Legal Character of the Action
The action for registration founded on an allocation certificate is an action for performance aimed at converting the expectation of acquiring ownership into a right in rem by judicial decision. According to the case law of the Court of Cassation, since the action in substance contains a claim for the conveyance of ownership, the court examines of its own motion whether the zoning plan has become final, whether the price has been paid and whether the property is suitable for registration.
Court with Subject-Matter and Territorial Jurisdiction
In these actions subject-matter jurisdiction lies with the Civil Court of First Instance. As to territorial jurisdiction, under Art. 12 of the Code of Civil Procedure No. 6100, actions concerning the substance of immovable property must be brought before the court of the place where the property is situated. That rule of jurisdiction is exclusive in nature and is taken into account by the judge of his own motion.
Time Limits and the Statute of Limitations
The law has not laid down any special preclusive period in respect of claims for registration founded on an allocation certificate. The admissibility of the claim depends, however, on the property having become capable of registration — for example, on the rehabilitation zoning plan having become final. So long as the conditions continue to exist, an action may be brought.
Proof and Evidence
In an action for registration the burden of proof rests on the claimant. The claimant is expected to establish that the certificate is not forged and that he has performed his statutory obligations, above all the payment of the price. The principal evidence relied on in this context is the following: reports of an on-site examination conducted with a panel of court-appointed experts comprising a lawyer, a surveying engineer and a city and regional planner; survey and sketch records setting out the current zoning status of the property; finalised rehabilitation zoning plans together with municipal council decisions; receipts or bank slips showing that the allocation price has been paid; and the application file created under Act No. 2981.
Consequences of the Decision
If the court concludes that the property is suitable for registration and that the claimant’s request is well founded, it orders the annulment of the existing land registry entry and the registration of the property in the claimant’s name. That judgment is constitutive in nature; once it becomes final, the claimant acquires the capacity of full owner of the property. A title deed is then issued upon application to the land registry directorate with a copy of the final decision.
Independent Legal Assessment
In disputes founded on an allocation certificate, success depends far more often on the completeness of the documents submitted to the file than on the quality of the statement of claim. Since in the proceedings the court examines of its own motion whether the zoning plan has become final and whether the price has been paid in full, a payment record left incomplete or an unfinished parcelling operation may result in the dismissal of a claim that is in substance well founded.
In practice, moreover, the rights attached to the certificate are seen to have changed hands several times over the years, and this brings with it a dispute as to who holds the capacity of claimant. Being able to establish the chain of transfers without interruption by means of written documents is the most critical link in the process.
When a concrete file is being constructed, it is appropriate to address the following headings first:
- Documenting the date on which the rehabilitation zoning plan became final and the use designation of the property in the plan
- Recording all payments relating to the allocation price, including adjustment differences
- Where the right arising from the certificate has been transferred more than once, completing the chain of assignments with written evidence
- Supporting, by means of the factual use and the administrative records, the fact that the conditions of entitlement still continue
- Placing on the file, in full, the applications made to the administration and the replies given
- Establishing before the action is brought whether the property falls within an area set aside for public services
Independent Legal provides process management and litigation services in disputes over entitlement arising from title deed allocation certificates, from the administrative application stage to the enforcement of the registration decision.