First and foremost, as a general rule, for a real estate sales promise agreement to be concluded between the contractor and another party, this agreement must be made in an official form before a notary public. On the contrary, ordinary written real estate sales promise agreements are invalid due to non-compliance with the form and do not have any legal effect or consequence.

Supreme Court Decision – 3rd Civil Chamber, File No: 2018/7902, Decision No: 2019/574, Date: 24.01.2019

“The agreement concerning the sale of registered immovables is legally invalid because it is not officially formalized, according to Article 706 of the Turkish Civil Code, Article 237 of the Turkish Code of Obligations (Article 213 of the Turkish Code of Obligations), Article 26 of the Land Registry Law, and Article 60 of the Notary Public Law. Invalid agreements do not give rise to rights and obligations for the parties. The parties can reclaim what they have given under the rules of unjust enrichment. When returning, the paid amount must be adjusted to the purchasing power at the time of the first payment. This way, by following the principle of restitutio in integrum, the obligation to fully restore is fulfilled instead of attempting to do so.2- Ordinary written real estate sales promise agreements are considered valid if the contractor has secured the land based on a construction agreement for a consideration. In this case, since there is a claim, the ordinary written contract between the parties will remain valid as a transfer of claim and will continue to have legal consequences between them.”

Another situation is when an ordinary written real estate sales promise agreement is concluded in case the roles of the contractor and the landowner are combined. In this case, the real estate sales promise agreement will be invalid since it is not officially formalized. Additionally, as the roles of the contractor and the landowner are combined, there won’t be a claim, and the ordinary written agreement between the parties cannot be transformed into a transfer of claim. The precedents of the Supreme Court also indicate that if the contractor has secured the land based on a construction agreement for consideration, an ordinary written real estate sales promise agreement will stand as a transfer of claim and continue to have legal consequences between the parties. Supreme Court Decision – 19th Civil Chamber, File No: 2017/2351, Decision No: 2019/609, Date: 5.2.2019

In a different scenario, if the roles of the contractor and the landowner are combined, an ordinary written real estate sales promise agreement will be invalid because it is not officially formalized. Additionally, as the roles of the contractor and the landowner are combined, there won’t be a claim, and the ordinary written agreement between the parties cannot be transformed into a transfer of claim. The unified decision of the Supreme Court also states that if a structure has been built and not registered in the condominium ownership or condominium registry, a real estate sales promise agreement can only be valid if officially executed by a notary.

Supreme Court Decision – Court of Cassation, General Assembly of Civil Chambers, File No: 1978/3, Decision No: 1978/4, Date: 24.04.1978

“…In the absence of condominium ownership or condominium easement in the main real property, there is no legal obstacle, from the perspective of Property Law and the Turkish Code of Obligations, to making a sales promise agreement for the transfer of an independent section. Certainly, since the condominium ownership or condominium easement is not registered in the land registry, it cannot be transferred as a real right in the title deed to be registered in the name of another person. However, an independent section sales promise agreement that establishes a binding (obligatory) relationship between the parties, creating an obligation to conclude the main sales agreement in the future, can still be made in this case. The promise to contract, as a contract, is generally subject to the provisions regarding contracts. The general limits of the subject matter of contractual obligations are set out in Articles 19 and 20 of the Turkish Code of Obligations. According to these articles, contracts that are contrary to morality, public order, personality rights, or impossible to perform cannot be concluded. In our case, the sales promise of the independent section is not illegal and is not objectively impossible. It is sufficient for the subject of the sale to exist or be in the seller’s control at the time of performance. Since it is possible for the independent section subject to the sales promise to exist at the time of performance, the contract is not invalid. Because the contractor who promises the sale can complete the construction, establish condominium ownership on the property if he is the sole owner, make an independent section sales agreement, transfer the property in the title deed, and if there are co-owners in the property, establish condominium ownership by reaching an agreement with them, and sell the independent section to the buyer. Therefore, there is no objective impossibility. The same is true for condominium easement.

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Regarding the question of which official officer should prepare the contract: In the case of an independent section sales promise agreement made before the establishment of condominium ownership or condominium easement, the promisee undertakes to conclude a sales agreement for an independent section that he will own as a result of the establishment of condominium ownership or condominium easement. Since this involves a real estate sales promise agreement, notaries are authorized to perform this transaction in accordance with the third paragraph of Article 60 of Law No. 1512.

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Indeed, according to Articles 10, 13, and 14 of Law No. 634 on Condominium Ownership, condominium ownership or condominium easement is established by an official document (contract) to be prepared by the land registry officer and registration in the land registry. However, with the independent section sales promise agreement, condominium ownership or condominium easement is not established; only the sale of the independent section, which will be subject to condominium ownership or condominium easement in the future, is promised. The mentioned sales promise agreement has no relation or similarity to the process and contract of establishing condominium ownership and condominium easement regulated in Articles 10-14 of the Condominium Ownership Law. These are different and separate procedures both in terms of form and substance. According to the Condominium Ownership Law, a document must be drawn up with the unilateral declaration of will of the real property owner or the decision of all co-owners of the real property to establish condominium ownership or condominium easement. Making a document to establish condominium ownership does not create any legal relationship between the real property owner or owners and a third party. In this case, there is no change in the real property owner, and there is no transaction of transferring ownership. Therefore, the sales promise agreement cannot be considered as a contract to establish condominium ownership or condominium easement, and it is not acceptable in any way that it is subject to the form specified in Articles 10, 13, and 14 of the Condominium Ownership Law.

Since independent sections are of the nature of independent real properties, the promise to sell an independent section is, in fact, nothing more than a promise to sell real estate. The real intentions of the parties also point to this.

For these reasons, a sales promise agreement for condominium ownership or condominium easement related to an independent section can be prepared by notaries in accordance with the third paragraph of Article 60 of the Notary Law. Such a sales promise agreement prepared by notaries is valid and binding on the parties.”

The provision in the decision that determines the formal requirement for real estate sales promise agreements is also regulated in Article 89 of the Notary Law as follows: “Contracts and powers of attorney requiring a transaction in the land registry, as well as wills, sales with the preservation of ownership, real estate sales promise, foundation deed, marriage contract, adoption and acknowledgment, inheritance partitioning contract, and other transactions envisaged in other laws are drawn up in accordance with the provisions of this chapter.”

As can be understood from the decision text and the relevant article of the Notary Law, sales/sales promise agreements made without a condominium easement or condominium ownership deed are clearly classified as real estate sales promise agreements. To be valid, these contracts must be executed in the official form stipulated by law; otherwise, contracts not meeting this requirement will be deemed invalid.

The explanations provided above, along with the included decisions of the Court of Cassation, indicate that for a real estate sales promise agreement to be valid, it must be executed officially and notarized. However, if the contractor has acquired the land through a construction agreement with third parties based on a floor space allocation, a right to claim will arise. In this case, an ordinary written real estate sales promise agreement will not be deemed invalid; instead, it will have legal consequences akin to an assignment of claim. However, in cases where the roles of the landowner and the contractor are merged, there won’t be a claim to speak of, rendering the ordinary written real estate sales promise agreement invalid, and it cannot transform into the assignment of a claim. Consequently, a contract with all its primary and incidental consequences will be considered invalid and ineffective within the legal framework. In such a scenario, the only recourse would be the restitution of performed actions based on the principles of unjust enrichment. If this is not feasible, the parties may seek compensation for the damages arising from the invalid contract.

Att. M. Talha Arslan

Att. Mücahit Tüz

Trainee Att. Atakan Alkış