Property Purchase Process | Property Purchase Costs | Mortgage Finance

Introduction:
If you are buying from a developer used to dealing with UK buyers, you may find that documents and contracts are already available in bilingual version. If not, it is essential that you pay a registered translator to provide written translations. Relying on oral translations of contracts is a recipe for disaster if any questions arise later on.

1. Finding your property:
The first step to owning property in Turkey is to find a property you like. You can work with a real estate agent who knows what's on the market and can explain the pros and cons of each property to you. That agent can help guide you through negotiations and prepare you for the transaction. If the property seems cheap by UK standards, it may indicate that it:

• Requires significant refurbishment.
• Is built in an older style
• It's located in a remote area
• Only has an outside toilet

Many new developments, especially on the coast, are sold "off plan" which means that they are currently under construction. You need to ensure that the relevant terms and conditions are included in the preliminary contract - ask your legal advisor for assistance.

2. Finding a Solicitor
Buying a property in Turkey is not as difficult you might expect, but due to the nature of the bureaucracy and the relative immaturity of the housing market, it is very important to follow the procedures correctly and employ a reliable, English-speaking solicitor to represent you throughout. You can find a list of Solicitors on the US Embassy website below:

http://www.ankara.usembassy.gov/list_of_attorneys.html

To save time, you should also register with a local tax office and open a bank account.

3. Reserving your property
Once you have found a property you are interested in and negotiated an acceptable price with the seller, you will need to arrange for a reservation contract. In return for a small fee (usually around £2000), the property will be taken off the market for 2-4 weeks to give you time to have your solicitor initiate all the necessary title checks and other searches.

This will involve requesting a copy of the title deeds (TAPU) from the local authorities to check that the building was built with planning consent and to verify that the sellers are the true owners.  The reservation deposit is non-returnable unless a legal problem is found with the property or the seller backs out.

4. Checking the title deeds (TAPU)
Once the sale and purchase conditions are agreed with the owner or with his/her agent, you should ask for a copy of the TAPU (Title Deeds) and double check the following:

• The TAPU corresponds to the property you are buying.
  
  
• It is a residential or commercial property in a zone covered by an Implementary Development Plan or a Local Development Plan (If not, the new Title Deeds law will make the purchase illegal).
  
  
• The property really belongs to the person who introduced himself to you as the ‘owner’ (Compare the ID card of the person to the TAPU of the property)
  
  
• A joint ownership is in question (if so, whether all of the shareholders comply with the sale)
  
   
• No annotation prohibiting the sale/purchase of the property appears on the TAPU (Unless the prerequisites envisaged by the annotation are met, the sale is impossible).
  
  
• The Implementary Development Plan (Imar Plani) or the Local Development Plan allows you to erect a building on the land (if a land is in question and you want to construct a building on it).
  
  
• The building complies with all regulations such as earthquake-proof standards. if you are about to buy a flat or house, you should check all licenses and official permits for the property have been properly obtained.
  
  
• The current owner(s) owes no overdue taxes (Utilities/Property taxes etc)
  
  
• The agent you are using, if any, works for a registered company.

5. The Preliminary Contract
Your solicitor will prepare a preliminary contract of sale soon after the reservation. This will contain details of the agreed sale price and all checks, searches and conditions which must be satisfied for the sale to proceed.

You will have to pay a deposit of around 10% at this point, which is non-returnable unless any of the terms and conditions of the contract fails to be met. Similarly, the seller will also be unable to withdraw from this point onwards without compensating you by returning your deposit. By this time, your solicitor should have confirmed that there are no outstanding tax bills, debts or other charges on the property.

The contract should, at the very least, include the following:

• A detailed description of the property: Address, TAPU details, condition etc.
• The actual price to be paid to the seller for the property
• Seller’s bank account details.
• Payment terms and conditions.
• A Statement emphasising that the seller and the buyer will pay their own tax liabilities.
• The fees and commissions to be paid to the solicitor or agent.
• Conditions for refund of the payment price, should the situation arise.
• Force Majeure conditions, to protect against major unseen obstacles.
• Whether parties can pull out of the sale/purchase.
• Detailed permanent contact information of the signature holders.
• Legal jurisdiction details (For clarity over the resolution of future disputes)
• Details of all rights and responsibilities.
• ID numbers of Turkish nationals (TC Kimlik No) who are to sign the contract.
• The Barr registry number of the solicitor.
• The trade registry number of the real estate company.

Translating the contract
Before signing, it is advisable to have the contract translated into English.  This way, you are in complete control of everything and know exactly what you are signing for.

Notarising the contract
Both the English and Turkish versions of the contract (or a bi-lingual contract) should be signed in the presence of a notary public. This will ensure that

• Signatures are genuine,
• The contract is acceptable anywhere in Turkey,
• The contract terms within are binding on all parties.

6. Transferring ownership – the TAPU
Both buyer & seller (or their legally authorised agents) apply to the TAPU Office for transferring the ownership.

The TAPU is an official confirmation that you are the owner of the Property. For foreigners who want to buy a Property, the waiting period for obtaining this document is about 2-3 months.

First it goes to a regional Tapu office then to a Military Head office in Izmir to check that the Property is not in a Military Zone. This is just a formality. When everything is approved it takes just one day to complete. You then go to the Tapu office with a translator to sign the appropriate documents.

All the necessary formalities regarding obtaining the TAPU on your Property will be completed within few hours. The TAPU on the Property will be changed into your name and from that day forth the Property and Land stated is solely owned by you.

Documents required
During the application for buying property in Turkey, the buyer(s) are to provide the local TAPU Office with the following documents:

• Title Deed or a document indicating the property’s exact location (plot or parcel number etc.)
• Passport and/or ID Card of the buyer,
• Two recent passport size (4cm x 6cm) photos of the buyer,

And, if any agent is being used when buying property in Turkey:

• Passport and/or ID Card of the agent,
• Two recent passport photos of the agent,
• An acceptable Power of Attorney (if being used).

What’s on the TAPU?
The following details will be included on the Tapu:

• Location of the purchased Property.
• Passport photograph of the owner.
• Information regarding piece of land.
• Size of the piece of land.
• Price of the Property in New Turkish Lira (YTL).
• Information about changing the ownership.
• New owner's name.
• Date of issue of the new TAPU.
• Date, stamp and signature of the Land Register Office.
• Information regarding last TAPU ownership.

7. Government declaration
Property buyers must declare the acquisition of their property to the local Municipality (Town Council by the end of the year of purchase.  This simply entails filling out a form and submitting it to Municipal officers, who will then detail the amount ‘real estate tax’ (a tax similar to the Council Tax in the UK) payable on your property.

8. Power of Attorney purchases
Many investors choose to appoint an agent to deal with all necessary transactions by means of a legal document called “Power of Attorney” for buying the property. This MUST be endorsed and witnessed in the presence of a Notary-Public.

A Principal (the person who delegates his authority) can give an Agent broad legal authority, or very limited authority. The Power of Attorney is frequently used to help when the principal cannot be present to sign necessary legal documents.

A Power of Attorney can be used by an Agent to:

• Buy, sell or rent out your property,
• Manage your property,
• Conduct your banking transactions,
• Invest or make use of your money on behalf you,
• Make legal claims and conduct litigation or
• Carry out tax matters.

The conditions such as the duration of validity, actions that the agent can take and cannot take etc. should be stated clearly in those documents and again this MUST be done in the presence of a Notary-Public.

Who should be appointed Power of Attorney?
The candidate agent should be researched well. If he/she is a solicitor, it might be useful to cross check whether they are a member of the local Lawyers' Barr Association. Or, if you find someone from other professions, you can ask for a C.V. and a professional reference letter from their Bank.

You may appoint multiple Agents. If you appoint two or more Agents, you must decide whether they must act together in making decisions involving your affairs, or whether each can act separately.

Allowing your Agents to act separately may ensure that an Agent is always available to act for you, but it may also result in confusion and disagreements if the Agents do not communicate with each other.  The Agent appointed by means of a Power of Attorney is your representative. As long as you have the legal capacity to make decisions, you can direct your Agent to behave the way you wish.

The Agent is obliged to act for the sake of your interests and is supposed to avoid any "self-dealing".

Money should be kept in a separate bank account for the benefit of the Principal. Agents must also keep accurate financial records of their activities, and provide complete and periodic accountings for all money and property coming into your possession.

Abuse of a Power of Attorney
a Power of Attorney can be abused and a dishonest Agent may use a Power of Attorney to transfer your assets to himself. That is why, it is very important to appoint an Agent who is completely trustworthy and to require the Agent to provide you with complete and periodic reports.

If your agent is a professional accredited by an occupational association, you will have recourse to complain about them. Please also note that you can apply to public attorneys in local justice courts (Adliye Sarayi) and complain about ANY abuse or fraud ONLY if you are able to document the FULL details of the case.

Cessation of Power of Attorney
You may cancel the Power of Attorney at any time. In that case, you should send a written notice to your Agent and say that you are revoking the Power of Attorney. Do not forget to request the return of all copies of your Power of Attorney. You should also notify your bank or other financial institutions where your Agent is likely to use the Power of Attorney that it is no longer valid.

Can a Power of Attorney be prepared in UK?
Yes. You don't have to go to Turkey to prepare a Power of Attorney. You can have it prepared in the UK. In that case, you must make sure that it is legalised so that it can be ‘an acceptable & valid document' in Turkey.

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