LEGAL NATURE AND SCOPE OF TITLE DEED CANCELLATION AND REGISTRATION LAWSUITS IN TURKEY
Pursuant to Article 704 of the Turkish Civil Code, ownership of immovable property in Turkey is principally acquired through registration in the land registry. However, in certain exceptional cases provided by law, ownership of immovable property in Turkey may be acquired even before the registration process is completed. In particular, in cases such as court judgments, compulsory execution proceedings, possession (occupation), acquisition through inheritance, or extraordinary prescription (adverse possession), ownership arises prior to registration, and the subsequent registration in the land registry serves mainly a declaratory and evidentiary function. This demonstrates that the land registry system in Turkey functions not only as a tool to record the acquisition of ownership but also as a mechanism to publicly announce ownership rights.
The proper, reliable, and up-to-date maintenance of the land registry in Turkey is under the responsibility of the state, and it is essential that the registry records reflect the actual legal status of property rights. However, in practice, due to abuse of power of attorney, fraudulent acts, or various other reasons, entries that do not reflect the truth may be recorded in the land registry. In Turkish legal literature, such entries are referred to as “invalid (unlawful) registrations”, and they may cause serious legal issues concerning the protection of property rights in Turkey.
In order to eliminate such invalid registrations and to have the ownership of immovable property registered in the name of the actual rightful owner, the Turkish legal system provides for “title cancellation and registration lawsuits”. These lawsuits aim to cancel erroneous or unlawful entries in the land registry and ensure the registration of the property in favor of the rightful owner, thereby serving to protect ownership rights. Therefore, title cancellation and registration lawsuits in Turkey play a fundamental role in safeguarding the right of ownership and ensuring the proper functioning of the legal order.
WHAT ARE THE TYPES OF TITLE CANCELLATION LAWSUITS IN TURKEY?
In Turkey, title cancellation and registration lawsuits are among the most frequently used legal remedies for resolving disputes concerning the ownership of immovable property. The reasons leading to the filing of these lawsuits are quite diverse; however, the most common types encountered in practice in Turkey can be classified as follows:
- Abuse of power of attorney: Lawsuits filed to annul registrations made as a result of a representative exceeding or abusing their authority. These actions are essential legal mechanisms to ensure that ownership remains with the rightful owner.
- Fraudulent transfer by the deceased: Lawsuits filed when an inherited property is transferred fraudulently to deprive other heirs of their inheritance rights. These lawsuits are crucial to protect the rights of heirs in Turkey and prevent unjust enrichment.
- Extraordinary prescription (adverse possession): Lawsuits based on claims of ownership acquisition through long-term possession of an immovable property. Such cases aim to have ownership rights acquired before registration legally recognized.
- Contract of maintenance until death: Lawsuits seeking the cancellation of title deed registrations in Turkey made in breach of or fraudulently under a contract of care and maintenance until death.
- Zoning (development) practices: Lawsuits filed as a result of unlawful registration transactions made under zoning plans or implementations. These are important to ensure harmony between zoning law and the land registry system.
- Legal incapacity: Lawsuits filed when one of the parties lacked legal capacity to act at the time of the title deed registration transaction in Turkey. These cases aim to prevent the transfer of property based on invalid or deficient capacity.
- Family home annotation: Lawsuits seeking the cancellation of title deed registrations and transfers in Turkey made without the explicit consent of the spouse regarding property registered as the family home. Such lawsuits ensure the protection of the family home and safeguard the rights of spouses.
- Pre-emption right: Lawsuits filed to annul fraudulent or irregular sales aimed at preventing co-owners from exercising their statutory pre-emption right when one co-owner sells their share to a third party. These cases protect the pre-emption rights of co-owners and preserve the integrity of shared ownership arrangements. If such a lawsuit is filed while a partition case is pending, the title cancellation and registration lawsuit is treated as a prejudicial issue.
- Fraudulent transfers during divorce: Lawsuits filed when a spouse transfers immovable properties to third parties during divorce proceess in Turkey or while a divorce case is pending, with the intention of preventing the liquidation of the matrimonial property regime, the other spouse’s share claim, or the enforcement of divorce alimony and compensation. These lawsuits aim to ensure an equitable liquidation of the marital property regime in Turkey and prevent loss of rights through bad-faith dispositions.
- Execution of a will: Lawsuits seeking to annul registrations made contrary to the provisions of a will and to transfer the property to the heirs or appointed heirs in accordance with the testamentary provisions. Such lawsuits ensure the fulfillment of the deceased’s last will in Turkey and the proper distribution of the estate.
- Ownership claims prior to cadastral works: Lawsuits based on rights existing before cadastral works began. These lawsuits are significant in ensuring that rights acquired before cadastral surveys are duly registered in the land registry. A common example is when unregistered properties are recorded in another person’s name during the cadastral process or when Ottoman-era title deeds are registered under other names during cadastral registration.
- Breach of contract: Lawsuits filed to annul title deed registrations in Turkey made in breach of contractual provisions concerning the transfer of immovable property and to ensure that the property is re-registered in accordance with the contract. These actions aim to uphold the principle of freedom of contract and ensure that the parties’ will is accurately reflected in the land registry. Breaches of a preliminary sale agreement or a divorce settlement protocol are typical examples of such lawsuits.
These types of lawsuits not only serve as an effective legal mechanism to protect individual property rights in the Turkish legal system, but also function to maintain the reliability of the land registry and public trust. Therefore, the legal dimensions of title cancellation and registration lawsuits in Turkey extend beyond the individual interests of the parties and have significant implications for public order and the security of property ownership.
WHAT IS A POWER OF ATTORNEY AGREEMENT IN TURKEY?
Under Article 502 of the Turkish Code of Obligations (Law No. 6098), a contract of mandate (agency contract) in Turkey is defined as a type of contract whereby the agent (representative) undertakes to perform a task or carry out a legal transaction on behalf of the principal. In such contracts, the agent is obliged to protect the interests of the principal and act in accordance with the principal’s instructions.
For example, a person may appoint an agent in Turkey to carry out the sale or transfer of their immovable property to a third party, and the necessary transactions can be carried out in the land registry through that agent. In this context, the contract of mandate plays an important role in ensuring legal security and facilitating transactions, especially in dealings concerning immovable property.
Although the Turkish Code of Obligations does not prescribe a general form requirement for mandate contracts in Turkey, a written form is mandatory for mandate contracts concerning the transfer of immovable property in order to be valid. This requirement was introduced to enhance legal security in real estate transactions in Turkey and to minimize the risk of disputes between the parties.
Scope of Authority in a Power of Attorney Agreement in Turkey
In Turkey, if the scope of the contract of mandate (power of attorney agreement) is explicitly stated in the contract concluded between the parties, the provisions of the contract shall prevail. However, if the scope is not expressly specified, the agent’s powers are determined according to the nature of the task to be performed, in line with Article 504 of the Turkish Code of Obligations. According to this article, unless specifically authorized, the agent may not transfer immovable property or encumber it with a real right. Therefore, in Turkey, an agent must be expressly granted special authority in order to perform transactions such as the transfer of immovable property or encumbering it with a real right.
If the agent acts beyond the scope of their authority or abuses the power of attorney, the transactions carried out may be deemed unlawful and subject to annulment in Turkey. This is especially important in cases where the agent performs transactions outside the powers specified in the mandate contract. Thus, in Turkey, the scope of the mandate contract and the limits of the agent’s authority play a crucial role both in ensuring legal security in real estate transactions in Turkey and in protecting the right of ownership.
Liability of the Agent in a Power of Attorney Agreement in Turkey
Obligations and Responsibilities of the Agent in a Power of Attorney Agreement in Turkey
In Turkey, a contract of mandate (power of attorney agreement) establishes a relationship of trust between the parties, requiring the agent to act in accordance with the principal’s instructions, to safeguard the principal’s interests, and to perform tasks with due care. The Turkish Code of Obligations sets out in detail the obligations undertaken by the agent in this regard.
1. The Agent’s Duty to Perform in Accordance with Instructions in Turkey
In Turkey, the agent is obliged to act in line with the explicit instructions of the principal. However, if the agent cannot obtain the principal’s approval and it is clear that the principal would approve the action if informed, the agent may deviate from the instructions. Apart from this, if the agent deviates from the instructions, they will not be deemed to have fulfilled their obligations unless they compensate any resulting damage (TCO Article 505).
Turkish Court of Cassation (Yargıtay) decisions strictly monitor this obligation. For example, if an agent claims to have received certain instructions even though no such instructions were given, the agent must prove this claim with legal evidence (Y13HD-K.2017/1606). Therefore, the duty to act in accordance with instructions is regarded as a fundamental element of the mandate relationship in the Turkish legal system.
2. The Agent’s Duty of Personal Performance, Loyalty, and Care in Turkey
In Turkey, the agent must personally perform the work undertaken. However, if authorized in the contract or if the nature of the task makes it necessary or customary, the agent may delegate the work to another person. Even in such cases, the agent is still obliged to act in accordance with the duties of loyalty and care (TCO Article 506).
The duty of loyalty and care requires the agent to act as a prudent agent would under similar circumstances. The agent’s liability is assessed based on the standards of behavior expected from a prudent agent operating in a similar field in Turkey. If the agent breaches these duties, their actions may be deemed unlawful.
The Court of Cassation has held agents legally liable in cases of breaches of loyalty and care. For instance, if an agent acts contrary to good faith and reasonable behavior standards during a real estate sale, the transaction may be considered invalid (Y1HD-K.2020/117).
If the agent has no authority to delegate the work but does so anyway, they are personally liable for the acts of the third party. However, if the agent is authorized to appoint another person, they are only required to exercise due care in the selection and instruction of that person. In such cases, the principal may assert rights directly against the third person (TCO Article 507).
3. The Agent’s Duty to Render Accounts
In Turkey, one of the agent’s most important obligations is the duty to render accounts upon the principal’s request and to deliver to the principal everything obtained in connection with the mandate (TCO Article 508). If the agent delays delivery, they are also liable to pay interest on any money they hold.
Yargıtay emphasizes this duty in its case law. The agent must protect the principal’s rights, including values obtained from third parties, and provide complete and accurate accounts. If the agent breaches this duty, the principal may file a compensation lawsuit for the damages incurred (Y13HD-K.2017/2635).
This duty is based on the principle that the agent must deliver all property and funds obtained on behalf of the principal accurately and promptly, and it plays a key role in maintaining the element of trust in the mandate relationship in Turkey.
TITLE DEED CANCELLATION AND REGISTRATION LAWSUIT DUE TO ABUSE OF POWER OF ATTORNEY IN TURKEY
In Turkey, real estate transfer transactions carried out through the abuse of a power of attorney are considered unlawful, and any grievances arising from such transactions may be remedied through a lawsuit for the annulment and re-registration of the title deed based on the abuse of the power of attorney.
The attorney is obliged to act in the interest and in line with the will of the principal who has granted the power of attorney in Turkey. In this respect, the attorney must refrain from any act or conduct that may harm the principal. Therefore, in Turkey, the abuse of a power of attorney constitutes both an unlawful act and a violation of the right to property, and it requires the rectification of the land registry to reflect the true legal ownership status.
Scope of the Power of Attorney Relationship and Principles of Liability in Turkey
If there is a written power of attorney agreement between the attorney and the principal in Turkey, the scope of the relationship between the parties is determined according to 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 (Article 504/1 of the Turkish Code of Obligations). Even if not explicitly stated in the agreement, the attorney must always act in line with the will and in the best interests of the principal.
According to the Court of Cassation, even if the attorney has been authorized to sell an immovable property at any price and to any person, this authority does not eliminate the attorney’s duty of loyalty and diligence. The attorney cannot carry out transactions by disregarding the principle of good faith and the standards of reasonable conduct (1st Civil Chamber of the Court of Cassation – Decision 2016/2002). Otherwise, the attorney’s liability arises in Turkey, and such transactions may be subject to a lawsuit for annulment and re-registration of the title deed in Turkey.
Legal Grounds for the Lawsuit for Cancellation and Registration of Title Deed Due to Abuse of Power of Attorney in Turkey
If the attorney, by abusing the power of attorney, carries out unlawful transactions resulting in an improper registration of an immovable property, the principal or their heirs may file a lawsuit for title deed cancellation due to the abuse of the power of attorney in Turkey. The main legal grounds of this lawsuit are as follows:
- Improper Registration: Transfer of immovable property ownership as a result of the abuse of the power of attorney.
- Attorney’s Liability: The attorney’s actions in breach of the duties of loyalty and diligence.
- Third Party’s Bad Faith: If the third party involved in the transaction acted in bad faith, the transaction does not bind the principal.
If the attorney, by abusing the power of attorney, transfers an immovable property to a third party to the detriment of the principal, and if this third party is in bad faith, the principal may claim in a lawsuit for title deed cancellation due to the abuse of the power of attorney in Turkey that they are not bound by this transaction, based on the principle of good faith and the prohibition of abuse of rights set forth under Article 2 of the Turkish Civil Code.
However, if the third party is in good faith and does not know or is not expected to know that the attorney has abused their duty, the transaction is considered valid (Article 3 of the Turkish Civil Code). In this case, the attorney’s liability is limited to the internal relationship between the principal and the attorney, and no direct liability arises against the third party in Turkey.
Violation of the Duty of Loyalty and Diligence in the Abuse of Power of Attorney
In Turkey, the attorney is obliged to perform their duties in accordance with the duties of loyalty and diligence. This obligation requires the attorney to observe the legitimate interests of the principal and to act in line with the standards of conduct expected from a prudent attorney. If the attorney breaches this obligation in Turkey, they may be held liable for damages arising from the abuse of the power of attorney upon the principal’s request.
According to the established case law of the Court of Cassation, even in the absence of an explicit provision in the power of attorney agreement, the attorney cannot act in breach of the duties of loyalty and diligence. For example, even if authorized to sell an immovable property at any price and to any person, the attorney cannot carry out the sale at a price far below reasonable standards (1st Civil Chamber of the Court of Cassation – Decision 2020/117). Otherwise, the attorney will be obliged to compensate the principal for damages resulting from the abuse of the power of attorney in Turkey.
Burden of Proof and Importance of Evidence in Action for Cancellation and Registration of Deed Due to Abuse of Power of Attorney
Plaintiff and Defendant Status in Deed Cancellation and Registration Lawsuit due to Abuse of Power of Attorney in Turkey
In Turkey, lawsuits for annulment and re-registration of title deeds due to the abuse of power of attorney are filed by the principal (the person granting the power of attorney) who has suffered damage as a result of the attorney’s unlawful actions. In such lawsuits, the defendant is the person in whose name the property has been unlawfully registered.
In Turkey, the defendant in lawsuits for cancellation and re-registration of title deeds is generally the third party who has acquired the immovable property from the attorney through a contract (such as sale, donation, or exchange). However, whether the third party acted in good faith or bad faith will be clarified during the proceedings. Therefore, it is also possible to conditionally (alternatively) pursue the personal liability of the attorney together with the lawsuit for title deed cancellation in Turkey. In such cases, the attorney must also be named as a defendant.
The personal liability and defendant status of the attorney in lawsuits for title deed cancellation and registration lawsuit in Turkey due to the abuse of power of attorney must be carefully assessed. This is because there is no mandatory joinder between the attorney and the third party in such lawsuits. Therefore, if the attorney’s liability is to be pursued, the attorney must be explicitly named as a defendant, and a claim for the attorney’s personal liability due to the abuse of the power of attorney must be brought alongside the claim for title deed annulment and re-registration in Turkey.
If the third party in whose name the property has been registered has passed away, the lawsuit for title deed cancellation and registration lawsuit in Turkey due to the abuse of power of attorney may be filed against the heirs of the third party. In this case, the court may be requested to issue a certificate of inheritance to determine the heirs. Similarly, if the third party dies during the proceedings, the same process will be followed to ensure that the heirs are included as defendants. In such a case, support from an inheritance lawyer in Turkey becomes crucial.
Conducting the lawsuit in compliance with procedural rules and clearly stating the claims regarding both the attorney and the third party are of great importance for effectively identifying the defendants in the legal process.
Statute of Limitations and Prescription Periods in legal Cancellation of Land Purchase Deed Due to Abuse of Power of Attorney
Lawsuits for cancellation and registration of title deeds in Turkey based on the abuse of power of attorney arising from unlawful registration are not subject to any statute of limitations or time-bar, as they are based on a property ownership right. Since unlawful registration represents an ongoing illegality, there is no time limitation for filing such lawsuits.
By contrast, in Turkey, lawsuits for annulment and re-registration of title deeds based on contractual claims may be subject to a statute of limitations under the provisions of the Turkish Code of Obligations. However, in lawsuits for cancellation and registration of title deeds in Turkey based on the abuse of power of attorney, there is no statute of limitations.
Competent and Authorized Court in Title Deed Cancellation And Registration Lawsuit Due To Abuse Of Power Of Attorney
In lawsuits for annulment and re-registration of title deeds in Turkey, the competent court may vary depending on the legal nature of the dispute. However, in cases of unlawful registration, such as the abuse of a power of attorney, the competent court is the general jurisdiction court, namely the Civil Court of First Instance.
Since these lawsuits concern the immovable property itself, pursuant to Article 12 of the Turkish Code of Civil Procedure (Law No. 6100), the court where the property is located is considered the court of exclusive jurisdiction.
Because title deed cancellation and registration lawsuits in Turkey arise from the abuse of a power of attorney and relate directly to the immovable property, they are not subject to a mandatory mediation process as a precondition for filing the lawsuit. Such disputes are not listed among those suitable for mediation under the Turkish Mediation Law in Civil Disputes (Law No. 6325). Accordingly, it is not obligatory to attempt mediation before filing the title deed cancellation and registration lawsuit in Turkey.
LIABILITY OF THE PERSON WHO ACQUIRES AN IMMOVABLE PROPERTY AS A RESULT OF THE ABUSE OF POWER OF ATTORNEY IN TURKEY
If an attorney abuses their power of attorney in Turkey and transfers an immovable property to a third party, the true owner has two legal remedies:
- File a compensation lawsuit against the attorney.
- File a lawsuit for annulment and re-registration of the title deed against the person who acquired the property in order to recover ownership.
However, the defendant in title deed cancellation and registration lawsuit in Turkey is the person appearing as the owner in the land registry, not the attorney. Therefore, such lawsuits must be filed against the third party who acquired the property.
Filing a title deed cancellation and registration lawsuit in Turkey requires that the acquirer acted in bad faith. Bad faith is defined as situations where the person acquiring the property knew or, based on objective circumstances, should have known that the attorney had abused their duties. If the acquirer knew or should have known of the abuse, a lawsuit for annulment and re-registration may be filed against them.
Conversely, if the acquirer neither knew nor could have known about the attorney’s abuse of duties, Article 1023 of the Turkish Civil Code (TCC) protects the ownership or real right acquired by the third party in good faith relying on the land registry, and a title deed cancellation and registration lawsuit in Turkey based on the abuse of power of attorney cannot be filed against such a person. In this case, only a compensation lawsuit against the attorney who abused their duties is possible in Turkey.
Another important point to note is that the power of attorney must not be forged. If the power of attorney is fraudulent, the true owner may file a title deed cancellation and registration lawsuit in Turkey even if the third party acquired the property in good faith. Therefore, good faith of the third party is not protected in transactions carried out with a forged power of attorney.
The presence or absence of good faith in lawsuits for annulment and re-registration due to the abuse of power of attorney in Turkey is assessed on a case-by-case basis. The examination of whether the third party acted in bad faith during the transfer is supported, in addition to the parties’ statements, by:
- The difference between the sale price of the property and its actual value
- Unusual provisions in the contract
- Electronic or physical correspondence
- Witness statements and the overall context of other events
Status of the Good-Faith Third Party Who Acquires the Property
In order for a third party contracting with the attorney to be considered in good faith under Article 3 of the Turkish Civil Code (TCC), the third party must not know that the attorney abused their powers and must have been unable to discover this despite exercising the diligence expected of them. Under these conditions, the contract with the attorney is deemed valid in Turkey, and the principal (the person granting the power of attorney) is bound by this contract.
Even if the attorney has abused their power of attorney in Turkey, this situation is considered an internal issue between the attorney and the principal and does not affect the rights acquired by the third party.
However, if the third party and the attorney are acting in collusion, or if the third party acted in bad faith and knew—or should have known—that the attorney abused their power, the principal cannot be bound by the contract. This principle is a direct consequence of the duty of honesty and good faith set out in Article 2 of the Turkish Civil Code. This rule is mandatory and must be taken into account by the judge ex officio. Any contrary approach would encourage or condone bad faith, which is unacceptable under contemporary 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, the title deed cancellation and registration lawsuit in Turkey must be accepted.
In cases where the third party is not clearly in bad faith, the assessment focuses on whether the third party knew that the attorney acted maliciously or whether, despite exercising the diligence expected of them, they could have discovered such misconduct.
The validity of the contract concerning the transfer of the immovable property in Turkey can be established through a comprehensive evaluation of evidence, including inspection reports, expert reports, and professional opinions. In particular, the difference between the property’s actual value and the sale price recorded in the title deed is crucial in determining bad faith. If this difference exceeds reasonable levels and the third party cannot justify it lawfully, they may be deemed to have acted in bad faith.
Expert reports must be detailed, reasoned, and subject to objection; otherwise, as seen in established case law of the Court of Cassation, this may prolong the litigation and result in annulment of the decision.
The rights acquired by a third party found to be acting in bad faith are not protected, and the principal’s (grantor of the power of attorney) claim for annulment and re-registration of the title deed in Turkey will be accepted.
Each case must be assessed within its specific circumstances, and evidence must be presented accordingly. Documents such as witness statements, e-mails, and screenshots of messages can be used to disprove the third party’s claim of good faith or to demonstrate the principal’s loss in a title deed cancellation and registration lawsuit in Turkey
In this context, seeking assistance from a real estate lawyer in Turkey is highly advisable.
WHAT TO DO IF AN ATTORNEY FAILS TO PAY THE SALE PRICE UNDER A POWER OF ATTORNEY IN TURKEY?
In Turkey, a power of attorney agreement is defined under the Turkish Code of Obligations (TCO) as a contract whereby the attorney undertakes to perform a task or complete a legal transaction on behalf of the principal. According to the Court of Cassation case law and prevailing doctrine, the power of attorney relationship is essentially based on trust. Broadly speaking, a power of attorney in Turkey constitutes a legal transaction that creates a duty to act.
The attorney is obliged to protect the principal’s interests and must act with diligence and loyalty while fulfilling this obligation. In determining the attorney’s responsibility arising from the duty of care, the standard applied is that of a prudent attorney operating in the same field.
Under Turkish law, the attorney’s duty to account arises upon the establishment of the power of attorney and continues even after the termination of the attorney-principal relationship. According to Article 508 of the Turkish Code of Obligations, the attorney is required to return all assets acquired during the performance of the power of attorney to the principal, and the statute of limitations for this obligation does not commence until the duty to account is fulfilled.
Specifically, if the attorney fails to pay the sale price to the principal, the duty to account remains in force, and any claims the principal may pursue in this context are not subject to the statute of limitations.
Moreover, pursuant to Article 508/2 of the Turkish Code of Obligations, the attorney must pay interest on any delayed payments to the principal. Therefore, the attorney is obliged not only to pay the sale price but also to pay interest accrued from the date of the sale if the payment is delayed.
The attorney is responsible not only for the sale price but also for any actions that cause loss to the principal in connection with the transaction.
In conclusion, failure of the attorney to pay the sale price is considered an abuse of power of attorney in Turkey, and may trigger both civil and criminal liability. If the attorney acts in breach of their duty of loyalty and care, they may face legal sanctions under the Turkish Code of Obligations and criminal sanctions under the Turkish Penal Code for abuse of authority. In such cases, obtaining legal support in Turkey is crucial to prevent potential loss of rights.
Therefore, conducting the power of attorney relationship in accordance with the law and the principle of good faith is essential to maintain the trust between the attorney and the principal in Turkey.
DO COMPANIES IN TURKEY HAVE THE LEGAL CAPACITY TO FILE A LAWSUIT FOR ANNULMENT AND REGISTRATION OF TITLE DUE TO ABUSE OF POWER OF ATTORNEY?
In Turkey, legal entities such as companies possess legal personality and thus have both capacity to hold rights and capacity to sue. Within this framework, companies can also enter into power of attorney relationships and, through attorneys appointed under Turkish Commercial Law, carry out real estate transactions on their behalf. Attorneys acting on behalf of a company in Turkey are obliged to protect the company’s interests and act loyally.
If an attorney abuses their power of attorney by transferring real estate registered under the company without the company’s knowledge or consent, such a transfer is considered unlawful and constitutes an irregular registration. In such cases, the company has the right to file a title deed cancellation and registration lawsuit in Turkey as the real rights holder. These companies may be domestically established companies in Turkey or foreign companies operating through a branch in Turkey.
According to the Turkish Civil Code, lawsuits concerning ownership rights are not subject to any statute of limitations, and companies, like natural persons, have the right to sue regarding the real property itself. Therefore, companies can always file a title annulment and registration lawsuit in Turkey against irregular registrations arising from abuse of power of attorney.
However, the good faith of the third party acquiring the property remains decisive in the lawsuit brought by the company. If the third party knew or should have known that the attorney was abusing their authority, the company’s title deed cancellation and registration lawsuit in Turkey will be upheld. Conversely, pursuant to Article 1023 of the Turkish Civil Code, the acquisition by a bona fide third party is protected, and in such a case, the company can only file a compensation claim against the attorney. To avoid potential loss of rights, obtaining legal support from a Turkish commercial law attorney is essential in these situations.
Court precedents of the Turkish Court of Cassation clearly recognize that companies have active litigation capacity to file a title deed cancellation and registration lawsuit in Turkey when their property rights are abused. This ensures protection of corporate assets and enforces the loyalty obligations of corporate managers through legal remedies.
IS ABUSE OF POWER OF ATTORNEY A CRIME IN TURKEY?
In Turkey, abuse of power of attorney may constitute different types of criminal offenses, depending on the status of the agent (attorney-in-fact) and the nature of the act. The main crimes considered under the abuse of power of attorney in Turkey are:
- Abuse of Official Duty (TCC Art. 257): If the agent holds the status of a public official, using or failing to use their authority unlawfully in a way that causes public damage or victimization of an individual constitutes the crime of abuse of official duty.
- Breach of Trust (TCC Art. 155): If the agent acts against the interests of the principal, causing damage to the principal’s property, this constitutes the crime of breach of trust. This offense arises specifically when the agent misuses the authority granted to them over the principal’s assets.
- Fraud (TCC Arts. 157-158): If the agent unlawfully benefits from the principal’s property through deceitful actions, the crime of fraud is committed in Turkey. Fraud frequently arises in contexts involving high-value transactions, such as real estate dealings.
Abuse of power of attorney in Turkey not only triggers civil liability but is also subject to criminal prosecution. If the agent misuses their authority, both compensation lawsuits and criminal proceedings for abuse of power of attorney may be initiated.
Therefore, it is crucial that power of attorney relationships are conducted transparently and reliably, and that the rights of all parties are protected through legal means.
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