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MORTGAGE IN TURKEY

According to the Turkish Civil Code (“TCC”) number 4721, Mortgage is a limited real right which secures the debt by giving the lender the right to force the sale of the mortgaged property and collect the debt with the foreclosure when the debt is not paid on due time.

A mortgage can be established over immovable properties to secure the payment of existing or potential obligations, including monetary obligations or obligations of performance or non-performance of an action.

There are 2 types of mortgage due to the amount of the security:

  • Limit Mortgage
  • Principal Amount Mortgage

Limit mortgage is mostly established for securing the receivables of which the amount is not definite. Limit mortgage is established to secure the potential debt.

The amount of the limit mortgage is determined by the parties and registered to the land registry. Such amount represents the upper limit that will correspond to all claims, including the interest and other secondary claims of the mortgagee secured by the mortgage.

Principal mortgage ensures the payment of principal amount including costs related to the execution proceedings and default interest.

The mortgagee can enforce the foreclosure sale either by enforcement proceedings with judgment or enforcement proceedings without judgment.

Principal mortgage foreclosure is made by enforcement proceedings with judgment, which can be finalized in 6 months. The limit mortgage foreclosure proceeding is made without judgment and this period may take up to three years because of the finalization process.

If the mortgagee or the owner of the real property does not make an objection to order of payment within 7 days or does not pay the debt within 30 days, the enforcement proceeding becomes definite and the debtor shall request to foreclosure sale of real property.

Documents That You Need To Make a Mortgage Application in Turkey

  • Title deed or a document, which indicates the block, plot and layout of the real property,
  • A written application by the owner of the real estate to the Title Deed Registry to register a mortgage in favor of the debtor,
  • Photograph for real persons,
  • Both parties (debtor and debtee) need to make a contract. This contract should include the amount of the mortgage,
  • A natural disaster insurance which is compulsory,
  • The agreement needs to be annotated over a real property with the records of the relevant Title Deed Registry where the real property subject to mortgage is registered,
  • Owner of the real property’s or his/her legal representative’s identity card or passport,
  • Debtee’ s or his/her legal representative’s identity card or passport,
  • The mortgage agreement is recorded in the mortgage column of the relevant Title Deed Registry Record if above conditions are met.

The degree system is accepted for the mortgages in TCC. When a mortgage is established on a real property, it is divided into hypothetical value parts called “degrees”. In the event of a foreclosure sale of the mortgaged property mortgagees are satisfied in order of degree. For instance a second-degree mortgagee is satisfied with the remaining amount from the foreclosure sale after the first-degree mortgagees are fully satisfied.

The mortgage is regarded as fixed degree system mortgage unless otherwise is stated in the mortgage deed. In the fixed degree system the mortgage does not move up to the removed degree and the discharged degree remains vacant. A new dated mortgage can be established and replace the vacant degree. This can be considered as the downside of the old dated fixed degree mortgages. A right to benefit from upper degree may be determined in the official mortgage deed. Unless there is such agreement between the mortgagee and the mortgagor, the mortgage in the following degree may not move to the degree to the cancelled mortgage.

 

 

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