Mr. A. wishes to buy an apartment in Istanbul to acquire citizenship through investment in Turkey. He finds a new apartment worth 450,000 USD and agrees on the price with the contractor claiming to be the property owner.

The contractor demands a 50,000 USD deposit from Mr. A. to guarantee the sale, stating that the apartment is an “opportunity” and there are other suitors. Mr. A. trusts the contractor, signs a “simple written contract” (a simple handwritten paper) between them, and sends 50,000 USD to the seller via bank transfer.

When Mr. A. applies to a law firm to complete the remaining procedures and perform the title deed transfer, a bitter truth emerges during the title deed record inquiry (Title Deed Encumbrance Document), which is the first action taken by the lawyers: There is a 3,000,000 TL mortgage (bank lien) on the apartment arising from the bank loan used by the contractor for construction. The seller stops answering phone calls after receiving the deposit.

Legal Evaluation This case demonstrates one of the most common and costly mistakes foreign investors encounter in the property acquisition process.

1. Invalidity of the Simple Written Contract According to the Turkish Civil Code and Land Registry Law, contracts aiming to transfer real estate ownership must be made in an official form (i.e., as a “Sales Promise Contract” at the title deed office or in the presence of a notary). The handwritten piece of paper signed between Mr. A. and the contractor has no legal validity. Based on this contract, Mr. A. cannot force the contractor to sell the apartment.

2. Status of Mortgaged Property Title deed records are public (open to the public). A mortgage is not a “legal defect” but an “encumbrance” on the property. A property in this state can be sold, but it is sold along with the mortgage. In other words, if Mr. A. buys the apartment in this way, he also takes over the contractor’s 3,000,000 TL debt. The bank has the right to seize and sell the apartment from Mr. A. if the debt is not paid.

3. Impossibility of the “Citizenship” Goal The citizenship by investment program requires the valuation of the property to be purchased (appraisal report) to be over 400,000 USD and the title deed to be “clean.” A property with such a high mortgage is not suitable for a citizenship application.

Legal Result and Solution Methods Mr. A. has fallen into a legally very difficult situation because he made the deposit payment.

  • Receivable Lawsuit: Since the contract is invalid, Mr. A. must file a receivable lawsuit against the contractor based on “unjust enrichment” provisions to recover the 50,000 USD he gave.

  • Criminal Complaint: The contractor taking money from Mr. A. by concealing the mortgage and making false statements may constitute the elements of the crime of “fraud” under the Turkish Penal Code. Mr. A. should also go to the Public Prosecutor’s Office and file a criminal complaint against the contractor.

Conclusion and Advice This case shows how a single wrong step taken in the real estate purchase process can lead to huge losses.

  1. Legal Check First, Payment Later: When interested in a real estate property, the first thing to do before paying any money is to obtain a current “Title Deed Encumbrance Document” (Tapu Takyidat Belgesi) and check if there are any restrictions such as mortgages, liens, or annotations on the property.

  2. Official Contract is Mandatory: Even if a “deposit contract” is to be made, this must be done under the supervision of a lawyer or at least via a Notary as a “Real Estate Sales Promise Contract.”

  3. Professional Support: It is a fact that foreign investors, in particular, are more open to fraud due to their lack of command of the language and legal procedures. Getting consultancy from a law firm is a much lower-cost assurance compared to a loss of 50,000 USD.