The right of ownership is the widest right on a real estate and it entitles its holder usage, utilization and disposal rights. The ownership right can be limited under some circumstances. Such limitation can arise from the law or an agreement. The right of pre-emption is one of these limitations and is regulated under the Turkish Civil Code numbered 4721 dated 22.11.2001 ("TCC")

How many types of pre-emption rights are defined?

As stated above, the pre-emption right can arise either from law or from an agreement. The pre-emption right arising from law is called statutory pre-emption right. Article 732 of the TCC states that in case a party of a joint ownership on a real estate sells its shares partially or completely to a third party, the other parties of the other joint owners can exercise their pre-emption rights.

The other type of the pre-emption right is contractual pre-emption right. According ot the article 735 of the TCC, the contractual preemption right annotated to land registry can be used against any future owner of the property under the conditions stated in the annotation.

How can the preemption right be exercised?

Pursuant to the Article 734, in order to use the preemption the right owner shall file a case against the new owner. The case should be filed before the courts where the real estate is located and the claimant, who is the pre-emption right holder, shall deposit the sale price and the registration expenses to the account determined by the court.

In case there is a contractual pre-emption right, the sale price can be determined in the agreement. If there is no provision in the agreement, the sale conditions between the seller and third party buyer shall apply.

Is there any time limitation to file the case?

In joint ownerships the transfer shall be notified to the other parties via notary and the case should be filed within three months after the receipt of such notice and in any case within 2 years after the transfer of the real estate. After this period the pre-emption right holder cannot use its pre-emption right. Such limitation is applicable for both the statutory and contractual pre-emption right.

The TCC also provides that annotations in the land registry about contractual pre-emption rights are valid for ten years after the annotation of pre-emption right.

Can the pre-emption right owner waive its right?

The waiver is only valid if it is made in official form required by law and annotated to the land registry. On the other hand in case the right owner is waiving its right in a particular sale, the waiver can be given before or after the transfer.

Is there any restriction on exercising the preemption right?

According to the Article 733 of the TCC, if the real estate is sold by auction through execution proceeding by the Execution Offices the pre-emption right cannot be used.

What happens if there are more than one pre-emptive right holder of a joint ownership using their preemption rights?

In a joint ownership, every owner has the preemption right. The question is what will happen when more than one owner is willing to use its preemption right. Pursuant to the decision of Joint Chambers of the Appeal Court dated 11.06.1947 and numbered 5/8, each owner will acquire the sold shares at an equal rate and their share percentage on the real estate will not be taken into consideration.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.