The Infringement of the Right of Pre-Emption – Legal Framework and Case Law in Turkey

Introduction

The right of pre-emption (also known as the right of first refusal or şufa hakkı in Turkish law) grants co-owners of a property the priority to purchase a share that another co-owner intends to sell to a third party.
Its purpose is to protect co-ownership relations and prevent property shares from being transferred to outsiders without giving existing shareholders the opportunity to purchase them.
However, in practice, this right is often violated or misapplied, leading to serious legal disputes.

1. Legal Basis of the Right of Pre-Emption

Articles 732–735 of the Turkish Civil Code regulate the scope, conditions, and consequences of exercising the right of pre-emption.
Under these provisions:

• The right applies to properties under co-ownership (paylı mülkiyet).
• It arises only when a share is sold to a third party.
• The holder must file a lawsuit within 3 months of being notified of the sale.
• In any case, the right must be exercised within 2 years from the date of sale.

2. Forms of Infringement

Violations of the right of pre-emption can occur in several ways:

1. Concealing the sale price or underreporting it:
   Declaring a lower price at the land registry to discourage the right holder from bringing a claim.
2. Failure to notify the right holder:
   Not informing the co-owner of the sale to run out the statutory time limit.
3. Fraudulent transactions:
   Presenting a transaction as a sale when in reality it is a gift, aiming to bypass the pre-emption right.

3. Remedies for the Right Holder

• Pre-emption Lawsuit:
  The right holder can apply to court requesting that the share sold to the third party be registered in their own name.
• The purchase price stated in the land registry and the relevant transfer costs must be deposited in court.
• The lawsuit is filed against both the seller and the buyer.

4. Court of Cassation’s (Yargıtay) Approach

According to the case law of the Turkish Court of Cassation:

• Even if the actual sale price differs from that stated in the land registry, the pre-emption right is exercised based on the official price.
• If the transaction is proven to be fictitious (fraudulent), the matter is addressed under fraud provisions instead of the pre-emption rules.
• The strict statutory time limits apply: even if the sale is not notified, the maximum 2-year period from the sale date cannot be exceeded.

5. Practical Tips

1. Before selling a share in a co-owned property, formally notify the other co-owners.
2. State the sale price in the land registry as close to the actual market value as possible.
3. If you are a right holder, regularly monitor the land registry for changes in ownership.
4. Do not miss the 3-month period after notification.

Conclusion

The right of pre-emption is an important legal protection for co-owners, preserving the integrity of co-ownership.
Its infringement can lead to lengthy and costly legal proceedings for all parties involved.
Sellers, buyers, and right holders should act in accordance with the Turkish Civil Code and Court of Cassation precedents.
Obtaining legal counsel is the most reliable way to avoid loss of rights in such cases.