Introduction
Preliminary sales contracts in Turkish real estate law play a crucial role in property transactions, especially in off-plan projects, construction developments, and staged payment agreements. While many buyers assume that signing a contract secures ownership, Turkish law draws a strict distinction between a preliminary sales contract and the actual transfer of ownership.
Understanding the legal structure, formal validity requirements, enforceability conditions, and potential risks is essential—particularly for foreign investors entering the Turkish property market.
This article provides a detailed examination of preliminary sales contracts in Turkish real estate law, including legal basis, notary requirements, land registry annotation, breach consequences, and litigation mechanisms.
1. Legal Definition and Legal Basis
A preliminary sales contract (Taşınmaz Satış Vaadi Sözleşmesi) is an agreement in which the seller promises to transfer ownership of a specific immovable property in the future, and the buyer promises to purchase it under agreed conditions.
The primary legal sources are:
- Turkish Code of Obligations (Law No. 6098)
- Turkish Civil Code (Law No. 4721)
- Land Registry Law (Law No. 2644)
- Notary Law
The contract does not transfer ownership. It creates a personal right (relative right), not a real right.
Ownership is transferred only upon official registration in the Land Registry.
2. Formal Validity Requirements
Preliminary sales contracts in Turkish real estate law are subject to strict formal requirements.
A. Notary Requirement
The contract must be executed:
- In the presence of a notary public
- In the form of an official deed (düzenleme şeklinde)
If signed privately or without proper notary form, the contract is absolutely null and void.
B. Written Form is Not Enough
A simple written contract—even if signed by both parties—has no legal validity for real estate preliminary sale purposes.
This formalism aims to protect legal certainty and prevent fraud.
3. Difference Between Preliminary Contract and Title Transfer
This distinction is fundamental.
| Preliminary Sales Contract | Title Deed Transfer |
|---|---|
| Creates personal right | Creates real right |
| Executed before notary | Executed at Land Registry |
| Does not transfer ownership | Transfers ownership |
| Can be annotated | Automatically registered |
Many disputes arise because buyers mistakenly believe that signing a notary contract equals ownership.
It does not.
4. Land Registry Annotation (Şerh)
One of the most important legal protections is annotation.
If the preliminary contract is annotated in the land registry:
- It becomes effective against third parties.
- Future purchasers are bound by it.
- It protects the buyer against fraudulent resale.
If not annotated:
- The seller may transfer property to a third party.
- The buyer may only claim damages.
Annotation is valid for 5 years unless renewed.
For investors, annotation is strongly recommended.
5. Common Usage Areas
Preliminary sales contracts in Turkish real estate law are frequently used in:
- Off-plan construction projects
- Urban transformation projects
- Installment sales
- Development agreements
- Pre-construction marketing
Developers use these contracts before obtaining full condominium status (kat mülkiyeti).
6. Rights and Obligations of Parties
Seller’s Obligations
- Transfer ownership at agreed time
- Deliver property free of defects (unless agreed otherwise)
- Avoid third-party rights
Buyer’s Obligations
- Pay agreed purchase price
- Comply with payment schedule
- Apply for registration when due
Failure by either party may lead to litigation.
7. Breach and Legal Remedies
If the seller refuses to transfer ownership:
A. Action for Compulsory Registration
The buyer may file a lawsuit requesting:
- Court decision ordering title transfer
If court rules in favor of buyer:
- Judgment replaces seller’s declaration
- Land registry registers ownership
B. Damages Claim
If transfer is impossible, buyer may claim:
- Compensation for financial loss
- Interest
- Additional damages
If buyer defaults, seller may:
- Terminate contract
- Claim penalty clause (if agreed)
8. Termination and Cancellation
The contract may be terminated due to:
- Mutual agreement
- Breach of contract
- Impossibility
- Expiration of time limit
If annotated, cancellation must also be removed from registry.
9. Risks for Foreign Investors
Foreign buyers must pay attention to:
- Zoning status
- Construction license
- Developer financial stability
- Mortgage or liens
- Failure to annotate
Foreigners often rely solely on marketing materials, which creates risk.
Legal due diligence before signing a preliminary contract is essential.
10. Preliminary Contracts in Urban Transformation Projects
In urban transformation projects, preliminary contracts are widely used before demolition and reconstruction.
Risk factors include:
- Majority consent requirements
- Delayed construction
- Contractor bankruptcy
- Project cancellation
Buyers must evaluate contractor guarantees and insurance mechanisms.
11. Tax and Financial Aspects
Preliminary contracts may trigger:
- Stamp tax
- Notary fees
- Advance payments
However, title deed transfer taxes are paid only upon registration.
12. Judicial Approach and Case Law
Turkish Supreme Court (Yargıtay) decisions consistently emphasize:
- Strict compliance with formal requirements
- Protection of good faith third parties
- Necessity of annotation for third-party effect
Courts generally protect buyers if formalities are properly observed.
13. Practical Recommendations
Before signing:
- Verify land registry records
- Check encumbrances
- Confirm zoning plan
- Ensure notary form compliance
- Immediately annotate contract
Never rely on private agreements.
Conclusion
Preliminary sales contracts in Turkish real estate law are powerful legal instruments that secure future ownership rights. However, they do not transfer ownership and carry significant legal risks if formal requirements are not strictly followed.
For domestic and foreign investors alike, the key safeguards are:
- Proper notary execution
- Immediate land registry annotation
- Comprehensive legal due diligence
When structured correctly, preliminary sales contracts provide flexibility and security in real estate transactions. When misused, they become a source of litigation and financial loss.
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