Real estate sales contracts: what has changed after the significant changes to Law No. 1512 on the notary profession? – Immovable
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A real estate sales contract is an agreement that is executed by and between the buyer and the seller for the acquisition of real estate and is governed by the Turkish Code of Obligations No. 6098 (“Law No. 6098”). By executing the real estate sales contract, the seller agrees to transfer the real estate and the buyer agrees to pay the sale price of the real estate. In accordance with Article 237 of Law No. 6098, contracts for the sale of real estate are subject to the obligation of official form. In order to meet this requirement, contracts for the sale of real estate were only executed before the registrars since Article 26 of Law No. 2644 on the Land Registry (“Law No. 2644”) specifically authorizes the registrars of land registration to execute promises to sell real estate.
Law No. 7413 amending the Law on Judges and Prosecutors and certain laws (“Amendment Act”) published in the Official Gazette of June 28, 2022 and numbered 31880, introduces important changes to Law No. 1512 on public notaries (“Law No. 1512”) and authorizes public notaries to sign contracts for the sale of real estate. Prior to the amendment, the power of notaries public to enforce contracts for the sale of real estate was a contentious issue as there were no specific regulations authorizing notaries public to enforce contracts for the sale of real estate. In addition, different chambers of the Court of Cassation have issued different judgments regarding the authority of public notaries for the execution of contracts for the sale of real estate. The Amendment Act ended the dispute over whether notaries public are allowed to enforce contracts for the sale of real estate.
- General Conditions of Real Estate Sale Contracts before the Amendment
As explained above, prior to the Amendment Act, there was a dispute over whether notaries public are permitted to enforce contracts for the sale of real estate. Even though public notaries were not authorized to execute real estate sale contracts according to Law No. 1512, they were authorized to execute real estate presale contracts.
In order to fulfill the official form requirement stated in Article 237 of Law No. 6098, the buyer and the seller used to execute the contract before the Land Registry because Law No. 2644 has a regulation specific authorizing land conservators to run real estate. real estate sales contracts. On the other hand, the competence of public notaries for the execution of promises to sell real estate was once a source of conflict. As Law No. 1512 does not allow public notaries to execute contracts for the sale of real estate, there used to be a notice that only registrars of the land register were empowered to execute.
- General Conditions of Real Estate Sale Contracts after the Amendment
As we explained above, promises to sell real estate are subject to the obligation of official form. With the amendments made to Article 60 of Law No. 1512, the functions of public notaries have been revised and public notaries have been authorized to execute contracts for the sale of real estate in addition to the execution of preliminary agreements for the real estate. real estate sales. Pursuant to amended Article 60 of Law No. 1512, contracts for the sale of immovable property may be entered into before public notaries as well as before land registration offices.
Once the application for the sale of real estate has been made by the parties, the notary will issue an application document. The General Directorate of Land Registry and Cadastre will share the title deed file and other relevant documents with the notary public through the Land Registry Information System. The notary public will review and examine whether the submitted documents are complete. If the documents submitted are not complete, the notary public will request the missing registers and documents from the competent Land Registry Office via the Land Registry Information System. The land registry office will provide the requested records and documents to the notary public. In addition, the notary public will also determine the identity of the right holder and whether there is a legal situation preventing the sale of the property. If the notary public determines that there are no legal impediments preventing the sale of the real estate, the notary public will prepare the real estate sales contract for execution. Following the execution of the real estate sale contract by the parties, the notary will submit the real estate sale contract and the relevant documents to the information system of the land register for recording and will physically archive them. Once the Real Estate Sales Agreement is registered in the Land Registry Information System, it will be registered in the respective Land Registry by the Land Registry Office.
In addition to the above, according to the amendment made to Article 162 of Law No. 1512, public notaries are also held liable for damages resulting from the preparation of contracts for the sale of real estate.
In accordance with Law No. 1512, contracts for the sale of real estate signed by public notaries will be exempt from stamp duty and documents issued for these transactions will also be exempt from precious paper fees. For the real estate sales agreement to be executed by notaries, only the title deed fees will be invoiced in accordance with subparagraph (a) of paragraph (20) of the section entitled “I-Property title operations” of the numbered tariff (4) attached to the Fees Law number 492. In addition to the title deed fees, the notary fees indicated in the fee schedule, as long as they are not less than TRY 500 and not more than TRY 4,000 TRY according to the value of the real estate and the service fee to be recorded as income to the management of the revolving fund of the General Directorate of Land Registry and Cadastre will be charged following the sale of the real estate by the notary public.
The Department of Justice will regulate the details of this practice in a forthcoming press release. In accordance with article 14 of the amending law, the regulation authorizing notaries to enter into contracts for the sale of real estate will enter into force as soon as the announcement of the finalization of the installation of the cadastral information system on the website of the Ministry of Justice until January 1, 2023.
The regulation authorizing notaries public to conclude contracts for the sale of real estate aims to put an end to the long debated question of whether notaries public are authorized to conclude contracts for the sale of real estate and to conclude transactions for the sale of real estate in a more simpler and faster by authorizing public notaries. The details of this practice will be determined by the Ministry of Justice once the Ministry of Treasury and Finance and the Ministry of Environment, Urban Planning and Climate Change have given their opinion on this matter.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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