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Old 3rd March 2009, 07:36   #1 (permalink)
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Advice on Buying property

l found this very useful information in the local paper of Altinkum, "the voice".Stating how to secure your rights to investing in Turkey.

This advice on property first appeared in Zaman Newspaper

First things first. It seems best to start with an outline of what an overseas property investor (if any of them are left nowadays) should do when investing in Turkey.

First, it is strongly recommended that you take the appropriate independent legal counsel before signing the sales contract or paying a deposit. You will need a lawyer at all stages of your investment for a secure agreement.

You can find contacts for English-speaking Turkish Lawyers in many places, such as consulates, bar associations and in some directories.

Please make sure that there is either full or partial reciprocity between your native country and Turkey, because if there is no reciprocity it will not be possible for you to purchase property in Turkey.

Also ensure that the size and location of the property is in compliance with Turkish law. Properties located in forbidden military zones cannot be registered in a foreign investor’s name. Consult your lawyer for further details and restrictions.

Please note that you will need to obtain a tax ID number (vergi kimlik numarası), which is required for opening a bank account, contracting goods and services (telephone, electricity, etc.) and dealing with local tax authorities. Your lawyer will advise you on how to obtain one.

In addition, ensure that you will have full title to the property upon completion and that the appropriate documents are available for the lender.

Lenders are keen on obtaining these documents and you will be required to get them at some stage anyways. Mandatory earthquake insurance (DASK) will be required to cover the property if it is a building. Life insurance is not mandatory for all lenders, but it is advisable where not a condition of the loan.

Properties can be purchased either individually or jointly and this also means that there can be more than one owner for the property you are buying. Please do not forget to check the ownership if there is already more than one owner. During the sale process all owners should give their consent for the sale.

All buildings must have permission certificates in order to be connected with water, electricity and sewage infrastructure. Having a building usage permit, house-use authorization or similar certificate that enables you to actually use the building is of the utmost importance.

Unless you understand Turkish well enough to communicate with the land registry officer or a notary (if executing a sales contract), the officer and the notary are obliged to call upon the services of a qualified translator because the law states that you must understand what you are purchasing. The cost of the translation services will be paid by you.

Alternatively, you may wish to grant power of attorney to a representative of your choosing who is fully conversant in the Turkish language. Check with your estate agent/lawyer to make sure you are aware of the costs charged by the authorities for purchasing a Turkish property.

Will a sales agreement make you a property owner?

Apparently overseas property investors are sometimes misled into signing sales agreements and not obtaining any title deeds, which means that some of these investors have never become property owners.

But what makes an investor an owner at the end of the investment process in Turkey?

According to Turkish Civil Code Article 705, the transfer of the title and ownership of a property must be done at the land registry office in front of an authorized land registry official.

Unless the transfer of ownership of a property is made through the land registry, the buyer is not entitled to legal ownership under current legislation in Turkey.

But what can I do if no property exists yet? What if I want to buy from an off-plan development?

Sign a promise-to-sell agreement

In this case, since the property is not built or suitable for registration, you should sign a promise-to-sell agreement at a public notary and register it with the land registry office.

As I have already explained in recent weeks, promise-to-sell agreements are commonly used by Turkish locals for two main reasons. They are drafted either for securing the transfer of the title of a property that does not exist when the agreement is concluded (such as an off-plan development) or for an existing property for which the title is not suitable for transfer.

Signing agreement before a notary public

A promise-to-sell agreement will only be valid if it has been signed before a notary public. However, notarizing the contract itself will not be enough in most cases, because the seller will still have the power to transfer the property to any third party if the agreement is not registered with the land on which the property will be built.

A promise-to-sell agreement gives you the right to request a transfer of ownership from the seller. If the seller fails to fulfill his promise to sell the property, then you will have to file a case at the local court where the property is located. Your claim will be based on the agreement that was signed and the court may make a decision that will enable you to register the property in your name without the presence of the seller.

How to make a promise-to-sell agreement as a foreign investor in Turkey

In the case of a foreign buyer, this is a very important question. Because a promise-to-sell agreement provides a right to acquire ownership, the land registry will ask for almost all the same documentation that would be requested for the legal registration of the ultimate title of a property. This means that you will need to obtain a permit from military headquarters and carry out some necessary procedures.

If you are already able to complete this process,

a) then you can directly buy the property, rather than using a promise-to-sell agreement if the property is already there and ready for transfer of ownership;

b) if the property is off-plan or is not ready for sale for some other reason, then you can secure the sale of the property in the future and also make sure that the military clearance and other details for completing the transaction are already in place.

I should also note that the cost of making a promise-to-sell agreement is higher than making a simple sales agreement, but it is worth spending some money for the sake of your investment. You should consult your lawyer or a notary public office to find out the cost of drafting and registering this type of agreement.

It is clear that a sales agreement would not be satisfactory as a document proving ownership of a property.

Then, why do real estate professionals influence overseas buyers into signing plain sales agreements rather than carrying out the transaction properly?

The answer is as simple as "for lower costs -- for faster signing." Most of the time there is no hidden agenda, and the agencies trust the developers, although the past performance of a developer is never an absolute guarantee of his future performance. In the end, no one cares what happens to the investor if the seller fails to deliver the house within the time allotted for completion.

Overseas investors like easy investments and do not really go into the details of the legal side as long as they do not have an obvious potential problem on the table. There are some simple questions you should ask your lawyer before buying a property to find out if there are any risks.

What should you do if you have to sign a sales agreement?

Although you know that a sales agreement would not suffice as a document proving ownership, you may choose to sign it. Sometimes it is a matter of trust, and sometimes it is purely a business decision. If you are willing to sign it anyway, I should at least give you some "must be included" terms for a sales agreement.

Each transaction has a different nature, and the following essentials and remarks are of an "including but not limited to" nature. This means that you should not simply stick to the following content, but go further according to the needs of your particular investment.

If you don't have to, please do not sign a sales agreement and don't make any payments until you make sure that the title of the property is registered in your name. Please also note that any sales agreement must be reviewed by a lawyer before signing.
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Old 8th March 2009, 22:34   #2 (permalink)
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Re: Advice on Buying property

just skimmed it but it looks like essential reading for William Wallace amongst others

could also be incorporated into crashtesters piece though it does miss out anything about Ko-operatives
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