LEGAL NATURE AND SCOPE OF TITLE DEED CANCELLATION AND REGISTRATION LAWSUITS IN TURKEY

TYPES OF TITLE DEED CANCELLATION LAWSUITS IN TURKEY

Title deed cancellation and registration lawsuit in Turkey is among the most frequently used legal remedies for resolving disputes over real estate ownership. While the reasons for filing such lawsuits vary, the most common types encountered in practice include:

• Abuse of power of attorney: Lawsuits filed to annul registrations made due to the misuse of authority by a representative.
• Fraudulent conveyance to evade inheritance: Lawsuits filed to protect the rights of legitimate heirs when real estate subject to inheritance is transferred fraudulently.
• Extraordinary prescription: Lawsuits based on the acquisition of ownership through long-term possession of real estate.
• Lifetime support agreements: Lawsuits filed to annul transfers made in violation of contract terms or through fraudulent transactions.
• Zoning and urban planning regulations: Lawsuits arising from unlawful registration transactions due to zoning plan adjustments.
• Legal incapacity: Lawsuits filed when one of the parties lacks legal capacity at the time of registration.
• Family residence annotation: Lawsuits regarding transactions conducted without the explicit consent of a spouse for properties designated as family residences.
• Ownership rights before cadastral registration: Lawsuits based on pre-existing rights before the cadastral registration process.

These lawsuits not only serve as an effective legal tool for protecting individuals’ property rights within the Turkish legal system but also play a crucial role in ensuring the reliability of land registry records. Therefore, the legal implications of title deed cancellation and registration lawsuit in Turkey extend beyond individual interests and have significant consequences for public order.

WHAT IS A POWER OF ATTORNEY AGREEMENT IN TURKEY?

According to Article 502 of the Turkish Code of Obligations (Law No. 6098), a power of attorney agreement in Turkey is a type of contract in which the agent undertakes to perform a task or carry out a transaction on behalf of the principal. In such agreements, the agent acts to protect the interests of the principal. For example, a person may appoint an agent to sell or transfer a property on their behalf, enabling transactions to be carried out at the land registry.

The Turkish Code of Obligations does not generally impose a specific form requirement for power of attorney agreements. However, for a power of attorney related to real estate transfers to be valid, it must be executed in writing. This requirement is intended to ensure legal security in real estate transactions.

• Scope of Authority in a Power of Attorney Agreement in Turkey

If the scope of authority is explicitly defined in the agreement, those terms govern. However, if no specific scope is stated, the agent’s powers are determined based on the nature of the task in accordance with Article 504 of the Turkish Code of Obligations. According to this article, unless specifically authorized, the agent cannot transfer real estate or encumber it with a property right. Thus, special authorization is required for the agent to transfer the property or impose any encumbrance on it.

If an agent misuses their authority, the transactions they conduct may be legally invalid and subject to annulment in Turkey. This is particularly significant in cases where the agent acts beyond the scope defined in the power of attorney agreement.

• Liability of the Agent in a Power of Attorney Agreement in Turkey

A power of attorney agreement in Turkey requires the agent to fulfill their duties with care and loyalty. Under the Turkish Code of Obligations, the agent must act in accordance with the principal’s instructions, safeguard the principal’s interests, and personally carry out the tasks undertaken. Moreover, if the agent cannot obtain prior approval from the principal, they may act outside the given instructions only if it serves the principal’s best interests. However, this does not absolve the agent of liability.

If the agent fails to fulfill their obligations, the principal may file a lawsuit against the agent for damages suffered. In particular, if the agent wrongfully transfers the property to a third party, the principal may seek legal remedies to prevent the loss of their rights.

The agent’s liability may result in the following legal consequences:

1. The principal may file a compensation lawsuit against the agent for damages resulting from the misuse of authority.
2. If the real estate is transferred to a third party, the principal may file a title deed cancellation and registration lawsuit in Turkey against the transferee based on the abuse of the power of attorney.
3. The agent’s liability is not limited to acting against the principal’s explicit instructions but also includes failing to exercise due diligence in protecting the principal’s rights and interests. This aspect is crucial for maintaining trust in power of attorney agreements.

• Obligations and Responsibilities of the Agent in a Power of Attorney Agreement

A power of attorney agreement in Turkey establishes a relationship based on trust, requiring the agent to act in accordance with the principal’s instructions, safeguard their interests, and perform their duties with care. The Turkish Code of Obligations outlines the agent’s responsibilities in detail.

1. Duty to Follow Instructions

The agent is obliged to act in accordance with the principal’s explicit instructions. However, if obtaining prior approval from the principal is not possible, and it is evident that the principal would have approved under the circumstances, the agent may deviate from the instructions. Outside of such exceptional cases, if the agent deviates from the given instructions, they are not considered to have fulfilled their obligation unless they compensate for any resulting damages (TCO Art. 505).

Turkish Supreme Court rulings strictly evaluate the agent’s duty to comply with instructions. For example, if an agent claims to have received instructions on a specific matter without documented evidence, they must prove their claim with legally admissible evidence (13th Civil Chamber, Decision No. 2017/1606). Therefore, compliance with instructions is one of the fundamental aspects of a power of attorney relationship.

2. Personal Performance, Loyalty, and Due Diligence Obligations

The agent must personally perform the assigned task. However, if authorized in the agreement or if delegation is necessary due to the nature of the task, the agent may delegate the duty to another person. Even in such cases, the agent is still required to act with due diligence and loyalty (TCO Art. 506).

The duty of loyalty and due diligence obligates the agent to act prudently, similar to a reasonable and responsible agent in the same field. If the agent fails to fulfill these obligations, the transaction may be deemed unlawful. The Turkish Supreme Court has ruled that an agent’s actions that contradict good faith and reasonable conduct standards in real estate transactions may render the transactions invalid (1st Civil Chamber, Decision No. 2020/117).

If the agent delegates the task to another person without authorization, they are directly liable for the third party’s actions. However, if the agent was authorized to delegate, their responsibility is limited to exercising due diligence in selecting and instructing the delegate. In such cases, the principal may assert their rights directly against the third party (TCO Art. 507).

3. Duty to Provide Accounting and Reporting

One of the most critical obligations of the agent is to account for the transactions conducted and deliver any assets acquired on behalf of the principal (TCO Art. 508). If the agent delays in returning the assets, they are also liable for the accrued interest on any money obtained.

Turkish Supreme Court rulings emphasize the agent’s obligation to provide full and accurate accounts. The agent must protect the principal’s rights, including delivering any values received from third parties. If the agent fails to fulfill this duty, the principal may file a compensation lawsuit in Turkey against them for any losses incurred (13th Civil Chamber, Decision No. 2017/2635).

The duty to provide accounting ensures that the agent promptly and accurately delivers all property and funds obtained on behalf of the principal. This obligation plays a significant role in maintaining trust in power of attorney relationships.

DEED CANCELLATION AND REGISTRATION LAWSUIT DUE TO ABUSE OF POWER OF ATTORNEY

The transfer transactions of title deeds carried out through the abuse of power of attorney are unlawful, and the grievances arising from such transactions can be remedied through a deed cancellation and registration lawsuit due to abuse of power of attorney in Turkey. The attorney is obligated to act in accordance with the interests and will of the principal who granted them the authority to act on their behalf. Therefore, the attorney must avoid any transaction or conduct that would be detrimental to the principal.

• Scope of the Power of Attorney Relationship and Principles of Liability in Turkey

If a written “power of attorney agreement” exists between the attorney and the principal, the scope of the relationship between the parties is determined by the provisions of this agreement. If there is no written agreement, the scope of the power of attorney is determined according to the nature of the task to be performed (TCO Art. 504/1). The attorney is required to act in accordance with the will and interests of the principal at all times, even if this is not explicitly stated in the agreement.

According to Supreme Court rulings, even if the attorney is granted the authority to sell a property to any person at any price, this authority does not eliminate the attorney’s duty of loyalty and diligence. The attorney cannot act contrary to the principle of good faith and reasonable conduct standards (1st Civil Chamber of the Supreme Court – Decision No: 2016/2002). Otherwise, the attorney’s liability will arise, and these transactions may be subject to a lawsuit for the cancellation and registration of the title deed.

• Legal Grounds for the Lawsuit for Cancellation and Registration of Title Deed Due to Abuse of Power of Attorney in Turkey

If the attorney, through unlawful transactions based on the abuse of power of attorney, causes the improper registration of a property, the principal or their heirs may file a lawsuit for the cancellation of sale deed and registration due to the abuse of power of attorney in Turkey. The fundamental elements of this lawsuit are as follows:

• Improper Registration: The transfer of real estate ownership resulting from the abuse of power of attorney.
• Attorney’s Liability: The attorney’s conduct contrary to their duty of loyalty and diligence.
• Third Party’s Intent: If the third party to whom the attorney transferred the property acted in bad faith, the transaction does not bind the principal.

If the attorney transfers a property to a third party in a manner that harms the principal due to abuse of power of attorney, and if this third party is in bad faith, the principal can argue that they are not bound by the transaction in a lawsuit for cancellation and registration of the title deed due to abuse of power of attorney, based on the principle of good faith and the prohibition of abuse of rights regulated in Article 2 of the Turkish Civil Code.

However, if the third party is in good faith and does not meet the conditions of knowing or having to know about the attorney’s abuse of power, the transaction remains valid (TCC Art. 3). In this case, the attorney’s liability is limited to the relationship between the principal and the attorney.

• Violation of the Duty of Loyalty and Diligence in the Abuse of Power of Attorney

The agent is required to fulfill their duties in accordance with the obligations of loyalty and diligence. This obligation requires the attorney to act in a manner that protects the legitimate interests of the principal and adheres to the behavioral standards expected of a prudent agent. If the agent breaches this obligation, compensation for damages due to the abuse of power of attorney may be demanded by the principal.

According to established case law of the Supreme Court, even if the power of attorney agreement does not contain an explicit provision, the agent cannot act contrary to the duty of loyalty and diligence. For example, even if the agent is given the authority to sell a property at any price to any person, they cannot conduct a sale that exceeds reasonable limits (1st Civil Chamber of the Supreme Court – Decision No: 2020/117). Otherwise, the agent is liable for compensating the principal’s loss due to the abuse of power of attorney.

• Burden of Proof and Importance of Evidence in Action for Cancellation and Registration of Deed Due to Abuse of Power of Attorney

In lawsuits for cancellation and registration of the title deed due to abuse of power of attorney in Turkey, the burden of proof lies with the plaintiff. Since the plaintiff seeks to obtain a legal benefit from the lawsuit, they must substantiate their claims with evidence. However, in certain cases, procedural rules may effectively shift the burden of proof.

A wide range of evidence may be used to demonstrate the abuse of power of attorney in these lawsuits. The principal or their heirs, who have standing as plaintiffs, can rely on the following types of evidence:

• Title deed records and documents (e.g., power of attorney, sales or transfer agreements),
• Witness statements,
• Bank account statements,
• Expert reports and site inspections,
• Expert opinions,
• Electronic evidence (e.g., email correspondences, screenshots of messages).

Courts will evaluate whether the parties acted in good faith in title Deed cancellation and registration lawsuit due to abuse of power of attorney in Turkey within the framework of the principle of good faith, the prohibition of abuse of rights, and the good faith principle stipulated in Articles 2 and 3 of the Turkish Civil Code.

• Plaintiff and Defendant Status in Deed Cancellation and Registration Lawsuit due to Abuse of Power of Attorney in Turkey

Title deed cancellation and registration lawsuit due to abuse of power of attorney in Turkey is filed by the principal who has suffered damage due to the agent’s unlawful transactions. In this lawsuit, the defendant is the person who was improperly registered as the owner in the title deed.

In lawsuits for the cancellation of title deeds in Turkey, the defendant is usually the third party who acquired the property from the attorney through a contract (e.g., sale, donation, or exchange). However, during the proceedings, it will be determined whether this third party acted in good or bad faith. Therefore, it is also possible to claim the personal liability of the attorney through an alternative claim in the same lawsuit. In such cases, the attorney must also be explicitly named as a defendant.

In cases where the third party who was registered as the owner has passed away, title deed cancellation and registration lawsuit due to abuse of power of attorney in Turkey can be filed against their heirs. In such cases, the court may be requested to determine the heirs by issuing a certificate of inheritance. Similarly, if the third party dies during the lawsuit, the case can continue against their heirs.

In this process, ensuring the cancellation of sale deed lawsuit in Turkey is conducted properly and clearly specifying claims related to both the attorney and the third party are of great importance for the effectiveness of the legal proceedings.

• Statute of Limitations and Prescription Periods in legal Cancellation of Land Purchase Deed Due to Abuse of Power of Attorney

Since title deed cancellation and registration lawsuit in Turkey due to improper registration concern property ownership rights, they are not subject to any statute of limitations or prescription periods. In such cases, as improper registration represents a continuing legal violation, there is no time limit for filing the cancellation of sale deed lawsuit. However, in lawsuits for cancellation and registration of title deeds based on contracts, the statute of limitations under the Code of Obligations may apply. Nevertheless, lawsuits for legal cancellation of land purchase deed based on the abuse of power of attorney are not subject to a statute of limitations.

• Competent and Authorized Court in Title Deed Cancellation And Registration Lawsuit Due To Abuse Of Power Of Attorney

The competent court in title deed cancellation and registration lawsuit due to abuse of power of attorney in Turkey may vary depending on the legal nature of the dispute. However, in cases involving improper registration due to abuse of power of attorney, the general competent court is the civil court of first instance.

Since these lawsuits relate to property rights, under Article 12 of the Code of Civil Procedure No. 6100, the court of the location of the property has exclusive jurisdiction.

LIABILITY OF THE PERSON ACQUIRING THE REAL ESTATE AS A RESULT OF ABUSE OF POWER OF ATTORNEY

If the agent misuses their authority and transfers the immovable property to a third party, the true owner has two options:

1. They may file a compensation lawsuit against the agent.
2. They may file a lawsuit for annulment and registration of the title deed against the person who acquired the property to reclaim ownership.

However, in lawsuits for annulment and registration of title deeds in Turkey, the defendant must be the person registered as the owner in the land registry, not the attorney. Therefore, this lawsuit must be filed against the third party who acquired the property.

To file a title deed cancellation and registration lawsuit against the transferee, the transferee must have acted in bad faith. Bad faith refers to situations where the transferee either knew or should have known, based on objective circumstances, that the agent was misusing their authority. If the transferee knew or should have known of this misconduct, a lawsuit for annulment and registration of the title deed can be filed against them.

Conversely, if the transferee neither knew nor could have known about the agent’s misconduct, their acquisition is protected under Article 1023 of the Turkish Civil Code (TCC). According to this provision, a third party who acquires ownership or a real right in good faith based on the registration in the land registry is protected, and no lawsuit for cancellation and registration can be filed against them due to the agent’s abuse of authority. In this case, the only possible legal action is filing a compensation lawsuit against the attorney who misused their authority.

Another crucial point to consider is that the power of attorney must not be forged. If the power of agent is forged, the true owner of the immovable property can file a lawsuit for cancellation of sale deed in Turkey, even if the transferee acted in good faith. Therefore, in cases involving transactions based on a forged power of attorney, the good faith of the third party is not protected.

Whether good faith exists in action for cancellation and registration of deed due to the abuse of power of attorney is determined based on the specific circumstances of each case. The assessment of whether the third party was in bad faith during the transfer of ownership is supported by various factors, including:

1. The difference between the sale price and the actual market value of the property,
2. Unusual terms in the contract,
3. Electronic or physical correspondence,
4. Witness statements and the overall context of events.

• Status of the Good-Faith Third Party Who Acquires the Property

For a third party who enters into a contract with the attorney to be considered in good faith under Article 3 of the TCC, they must not have known that the agent was abusing their authority, and despite exercising due diligence, they must not have been able to discover this fact. Under these conditions, the contract with the agent is deemed valid, and the principal (the person granting the power of attorney) is bound by this contract. Even if the attorney abused their authority, this is considered an internal issue between the attorney and the principal, and it does not affect the third party’s acquired rights.

However, if the third party colluded with the agent or knew (or should have known) that the agent was misusing their authority, the principal is not bound by the contract. This follows from the principle of good faith established in Article 2 of the TCC, which courts must consider ex officio. Any contrary approach would encourage or tolerate bad faith, which is unacceptable in modern legal systems.

• Status of the Bad-Faith Third Party Who Acquires the Property

If it is determined that the third party acted in bad faith, title deed cancellation and registration lawsuit due to the abuse of power of attorney in Turkey must be upheld. In assessing whether the third party was in bad faith, it is examined whether they knew or, despite exercising reasonable diligence, should have known that the agent was acting improperly. The validity of the contract for the transfer of the immovable property is established through an evaluation of evidence such as on-site inspections, expert reports, and professional opinions.

A key factor in identifying bad faith is the discrepancy between the actual market value and the declared sale or exchange price. If this discrepancy is significantly large and the third party cannot provide a lawful explanation for it, their bad faith can be inferred. However, expert reports must be detailed, well-reasoned, and open to objection. Otherwise, as seen in established precedents of the Court of Cassation, such deficiencies can unnecessarily prolong legal proceedings and result in the reversal of judgments.

If the third party is determined to have acted in bad faith, their acquisition is not protected, and the plaintiff’s claim for annulment and registration of the title deed is accepted.

Each case should be assessed on its own merits, with relevant evidence presented accordingly. Documents such as witness statements, emails, and screenshots of text messages can be used in title deed cancellation and registration lawsuit due to the abuse of power of attorney in Turkey to refute claims of good faith or demonstrate bad faith. Seeking legal assistance from a real estate attorney in Turkey would be a prudent course of action in such cases.

WHAT SHOULD BE DONE IF THE ATTORNEY-IN-FACT FAILS TO PAY THE SALE PRICE?

A power of attorney agreement is defined under the Turkish Code of Obligations (TCO) as a type of contract in which the attorney-in-fact undertakes to perform a task or transaction on behalf of the principal. According to established case law and prevailing legal doctrine, the attorney-in-fact-client relationship is fundamentally based on trust. In its broadest sense, a power of attorney agreement is a legal transaction that creates an obligation to perform a service. The attorney-in-fact is obligated to protect the interests of the principal and must act with loyalty and diligence in fulfilling this duty. The level of diligence required is determined by the standard of care expected from a prudent attorney-in-fact operating in the same field.

The attorney-in-fact’s obligation to provide an account arises upon the conclusion of the power of attorney agreement and continues even after the relationship ends. Under Article 508 of the TCO, the attorney-in-fact is required to return all assets acquired on behalf of the principal, and the statute of limitations for this obligation does not begin until the duty to provide an account has been fulfilled. If the attorney-in-fact fails to pay the sale price, their obligation to account for the funds continues, and the principal’s right to claim payment does not become time-barred.

Additionally, pursuant to Article 508/2 of the TCO, if the attorney-in-fact delays the delivery of the funds to the principal, they are also liable for interest on the delayed amount. Therefore, not only must the attorney-in-fact pay the sale price to the principal, but they must also compensate for the delay by paying interest from the date of sale. The attorney-in-fact is not only responsible for the sale proceeds but also for any transactions that result in financial harm to the principal.

In conclusion, failure by the attorney-in-fact to pay the sale price constitutes an abuse of power of attorney, leading to both civil and criminal liability. If the attorney-in-fact breaches their duty of loyalty and diligence, they may face sanctions under the Turkish Code of Obligations and the Turkish Penal Code for abuse of power. Therefore, ensuring that the attorney-in-fact-client relationship is conducted in accordance with the law and the principle of good faith is essential for maintaining trust between the parties.

CANCELLATION OF TITLE DEED IN THE TRANSFER OF REAL ESTATE USING A FALSE POWER OF ATTORNEY

The transfer of real estate using a false power of attorney in Turkey is legally invalid. In such a case, the real owner of the property always has the right to file a lawsuit for the cancellation of the title deed against the transfers made with a false power of attorney. However, if the person who acquired the property through a false power of attorney later transfers it to a third party, the bona fide of the third party is protected under Article 1023 of the Turkish Civil Code. In other words, according to the legal regulation, the presence of good faith is prioritized.

In the case of a real estate transfer made using a false power of attorney, the burden of proving the bad faith of the third party who acquires the property in good faith falls on the plaintiff who identifies the faulty transaction in the title deed registry. Court decisions emphasize that the plaintiff must prove bad faith with concrete evidence in order to establish the bad faith of the person who transferred the property of the previous owner.

CRIMINAL OFFENSE OF ABUSE OF POWER OF ATTORNEY

Abuse of power of attorney leads to different types of criminal offenses depending on the agent’s position and the nature of the act. The main offenses that are considered abuse of power of attorney are as follows:

1. Abuse of Office (Turkish Penal Code, Article 257)
   If the agent holds a public office and uses or fails to use their authority in a way that results in public harm or the victimization of a person, the crime of abuse of office occurs.
2. Abuse of Trust (Turkish Penal Code, Article 155)
   If the agent acts contrary to the interests of the principal and causes damage to their assets, the crime of abuse of trust occurs. This crime involves the agent misusing their authority, particularly in relation to the principal’s assets.
3. Fraud (Turkish Penal Code, Articles 157-158)
   If the agent engages in fraudulent behavior to unlawfully benefit from the principal’s assets, the crime of fraud is committed. Fraud is often associated with matters involving significant financial value, such as title deed transactions.

Abuse of power of attorney is an issue that should be addressed not only in terms of legal responsibility but also from the criminal law perspective, regarding the crime of abuse of power of attorney. If the agent abuses their authority, criminal proceedings may occur alongside compensation lawsuits. Therefore, it is crucial for the power of attorney relationship to be conducted transparently and reliably, with the parties protecting their rights through legal means.