A pledge, regulated under the Turkish Civil Code ("TCC"), is a limited real right established over the immoveable property of a debtor or a third party to secure a creditor's claim. Its primary function is to grant the creditor the power to collect their claim with priority through the realization of the pledged immoveable property if the debt is not performed. This security is widely used, especially in the banking and finance sector.

A pledge is a real right, established by registration in the land registry and gaining public notice. This registration process is constitutive; meaning the right of pledge comes into existence with registration. A pledge is also an accessory (secondary) right; its existence depends on the existence of the claim it secures. Therefore, when the claim ceases, the pledge tends to cease ipso facto.

Although the term "lifting the pledge" is commonly used in practice, "cancellation" or "release" are more appropriate terms in legal terminology. While "lifting" might imply the elimination of a valid right, "rectification" emphasizes that the pledge was a registration that was unlawful from the outset or became so subsequently, and that the registry must be brought into conformity with the truth. This distinction shows that the action is not merely a result but also a rectification mechanism. Its aim to remedy a situation contradicting the principle of reliability of the land registry also strengthens the action's relation to public order, as a correct and reliable land registry is a general legal expectation.

1. Grounds for Termination of Pledge and Cancellation Process

Pursuant to Article 858 of the Turkish Civil Code, immoveable property pledge and, consequently, pledge, terminates with the cancellation of the registration or the complete destruction of the immoveable property. Special provisions regarding expropriation are reserved.

1.1. Cancellation

The most common way for a pledge to terminate is by cancellation. Cancellation is generally carried out by the land registry officer upon the written request of the creditor holding the pledge right or their statement of consent for cancellation. The consent of the immoveable property owner is not required for this transaction. Cancellation made based on a valid written request from the creditor is a constitutive act, and the pledge right terminates both formally and substantively.

1.2. Other Grounds for Termination

• Complete Destruction of the Immoveable Property: If the immoveable property is completely destroyed, the pledge also terminates. However, if the immoveable property is partially destroyed, the pledge continues to exist over the remaining part.
• Realization: The realization of the pledged immoveable property through enforcement proceedings due to non-payment of the claim and the distribution of the obtained amount to the secured creditors are also grounds for termination of the pledge.
• Pledges Arising from Law: Pledges arising directly from law without registration terminate when their reason for establishment ceases.
• Cancellation in Fixed-Term Pledges: Pursuant to Article 883 of the Turkish Civil Code, a pledge established for a fixed term can be cancelled by the land registry directorate upon the owner's request if the annotation specified in Article 150/c of the Enforcement and Bankruptcy Law is not entered within thirty days from the end of the term.

1.3. Cancellation Process Under the Enforcement and Bankruptcy Law

Article 153 of the Enforcement and Bankruptcy Law regulates special situations such as the absence of the pledge creditor or their refusal to accept the debt. In such cases, the enforcement court may decide for the money to be deposited in the name of the creditor and for the pledge to be cancelled. This decision is notified to the land registry office and registered in the records of the pledged immoveable property. In these situations, although the pledge is legally valid, cancellation is provided through an administrative route due to the creditor's lack of cooperation or unavailability.

This situation demonstrates that the mechanisms for pledge termination are based not only on substantive law but also on procedural law. The owner's ability to have the pledge removed from the registry even if the creditor does not cooperate is a strong mechanism for the protection of property rights. This is also a reflection of the principle that the land registry must always reflect the material truth.

2. Action for Cancellation of Pledge Registration: Legal Nature and Scope

The action for cancellation of pledge registration is a legal remedy aimed at rectifying a pledge that has been unlawfully registered in the land registry. In practice, it is referred to by various names such as "action for release of pledge", "action for release of pledge in the land registry", "action for removal of pledge annotation", and even "action for annulment of pledge". However, the fundamental legal nature of this action is a "land registry rectification action" based on Article 1025 of the Turkish Civil Code.

2.1. Legal Nature of the Action

The action for cancellation of pledge registration is filed by the pledgor (immoveable property owner) to demand the rectification of an unlawfully registered pledge, relying on their right of ownership. Unlawful registration encompasses any registration that lacks a legal basis, is based on an invalid legal basis, or is not carried out in accordance with the procedure.

According to the dominant view in doctrine, this action is a declaratory action based on the type of legal protection sought from the court. Pursuant to Article 106 of the Code of Civil Procedure, the court's judgment declares the registration unlawful, and the plaintiff can rectify the unlawful registration based on this decision.

According to some legal views, the action for cancellation of pledge has the nature of a negative declaratory action by analogy with Article 72 of the Enforcement and Bankruptcy Law, pursuant to Article 150/c-3 of the same law. From this perspective, the action for cancellation (annulment) of pledge is a special manifestation of the negative declaratory action specific to enforcement law, envisioned for enforcement proceedings through the realization of pledges.

The complex legal nature of this action means that it not only physically changes the land registry record but also legally determines the existence or invalidity of the claim. Especially the analogy to Article 72 of the EBL highlights the action's importance in the context of enforcement law and the debtor's aim to protect themselves from an unfair enforcement. This multiple legal nature emphasizes that the action is not just a technical registry rectification process, but also a reflection of the underlying debt-claim relationship and is located at the intersection of property rights and claim rights.

3. Conditions for Action for Cancellation of Pledge Registration: Foundations of Unlawful Registration

The fundamental condition for filing an action for cancellation of pledge registration is that the pledge right must have been unlawfully registered in the land registry. Unlawful registration can occur initially (e.g., based on an invalid contract) or arise subsequently (e.g., termination of the claim). Any registration that lacks a legal basis, is based on an invalid legal basis, or is not carried out in accordance with the procedure is considered unlawful.

3.1. Invalid or Terminated Pledged Claim

• Claim Being Invalid from the Outset: A pledge cannot be established for a legally invalid claim. The invalidity of the claim can arise from various reasons such as being contrary to law or morals, initial impossibility of performance, lack of legal capacity to act, or a simulated (collusive) debt relationship. A pledge registration based on an invalid claim is unlawful and its rectification can be demanded.
• Claim Terminating Subsequently: When the secured claim terminates, the pledge right also ceases ipso facto. This applies in cases such as performance (payment) of the debt, release, novation, merger of creditor and debtor capacities, impossibility of performance, and set-off. Once the claim terminates, the owner of the pledged immoveable property can request the secured creditor to cancel the pledge. If the creditor refuses to request cancellation, the owner can file a land registry rectification action. If the debt has been fully performed, the cancellation of the pledge should be decided. In case of partial performance, there are differing decisions from the Court of Cassation; some state that the pledge should be cancelled proportionally to the partial performance, while others state that the action should be dismissed but the partial payment should be noted in the remarks column. A pledge is divided into principal amount pledge and maximum limit pledge. In a principal amount pledge, the actual claim amount is registered, while in a maximum limit pledge, the maximum security amount is indicated. This distinction is important when assessing whether the debt has been paid or how much has been paid. If the pledge was established for another person's debt and the debt has been paid, the owner of the immoveable property subrogates the secured creditor and the pledge passes to them, in which case the owner can personally request cancellation.

3.2. Invalid Pledge Contract

• Violation of Formal Requirement: The legal basis for establishing a voluntary pledge is generally the pledge contract. The validity of the pledge contract depends on it being made in an official form by a land registry officer. Pledge contracts made by notaries are invalid. Otherwise, the pledge contract is absolutely null and void, and a registration made based on a contract that violates the form requirement does not lead to the acquisition of the pledge right. The immoveable property owner can demand the rectification of the land registry from the court.
• Defects in Will and Legal Incapacity: If the pledge contract has been annulled due to error, fraud, duress, or excessive exploitation, the registration becomes unlawful and rectification of the pledge can be demanded. According to the Court of Cassation, if the pledge is invalid due to a defect in will, an action for cancellation of pledge can be filed. Lack of discernment capacity of the parties also invalidates the contract.
• Requirement of Legal Representative's Consent: If parents wish to establish a pledge over a child's immoveable property for their own debts, the establishment of the pledge is subject to the participation of a guardian appointed by the court and the approval of the judge. For persons under guardianship to establish a pledge, they must be represented by a guardian, and the transaction requires permission from the guardianship authority. If a pledge is established without permission, an unlawful registration occurs.

3.3. Lack or Restriction of Power of Disposition Over the Immoveable Property

• Unauthorized Representation or Forged Document: For the owner to establish a pledge over immoveable property, they must have the power of disposition. Requests to establish a pledge by persons without power of disposition should be rejected by the land registry officer. Otherwise, despite being registered in the land register, the pledge right does not arise, and the deletion of such a pledge from the land registry can be requested. For example, if a pledge is established with a forged power of attorney or a forged certificate of inheritance, cancellation of the pledge can be demanded.
• Pledge Over Family Home and Spousal Consent (TCC Art. 194): Pursuant to Article 194 of the Turkish Civil Code, one spouse cannot restrict rights over the family home without the express consent of the other spouse. This provision also covers the right of pledge. Therefore, the establishment of a pledge over a family home is subject to obtaining the express consent of the other spouse. Otherwise, the registration made is unlawful, and the non-owner spouse can file an action for cancellation of the pledge. Even if there is no family home annotation in the land registry, the fact that the residence is a family home and the lack of consent from the other spouse invalidates the pledge. The burden of proof for the existence of express consent lies with the party making the disposition. The General Assembly of Civil Chambers of the Court of Cassation has stated that even without an annotation in the land registry, consent is required and even the bank's claim of good faith cannot be heard. This situation demonstrates how strong the law's purpose is to protect the family unit and the right to housing. The strict application of pledge invalidity over a family home shows an important public order exception that property rights are not absolute and can be limited in favor of social and family interests. This also creates a serious risk management requirement for financial institutions; as they need to meticulously investigate whether the immoveable property is a family home and whether the other spouse's consent has been obtained when establishing a pledge.
• Power of Disposition Restricted by Judicial Decision: If the economic assets of the family need to be protected or a financial obligation arising from the marital union needs to be fulfilled, upon the request of one spouse, the other spouse's power of disposition over certain assets can be restricted by judicial decision (TCC Art. 199). Nevertheless, if a pledge is established without the consent of the other spouse, the registration is unlawful.
• Participation in Acquired Property Regime: The power of disposition regarding the share in property jointly owned by spouses in the regime of participation in acquired property can also be restricted (TCC Art. 223/II). A pledge cannot be granted over a share in jointly owned property without the consent of the other spouse.
• Restrictions Arising from Inheritance Law: In cases where an executor is appointed (TCC Art. 550 et seq.) or the estate is officially administered (TCC Art. 592 et seq.), an official inventory is kept (TCC Art. 619 et seq.), and official liquidation is carried out (TCC Art. 632 et seq.), the heirs' power of disposition over estate assets is also restricted. If a pledge is established over an immoveable property included in the estate contrary to these provisions, rectification of the land registry can also be demanded.

It should be noted that the concept of "unlawful registration" can stem not only from initial invalidity but also from subsequently arising situations (such as the termination of the claim). This shows that the concept of "unlawfulness" is a dynamic rather than a static process. Even if a pledge is initially established validly, its existence in the land registry becomes "unlawful" when the underlying claim terminates. This dynamic approach reinforces the principle that the land registry must continuously reflect the material truth. When an owner faces a pledge still registered in the land registry despite having paid their debt, this action demonstrates a fundamental right to seek legal remedy and is a reflection of the principle of legal certainty. This also highlights the importance of creditors' obligation to cancel the pledge when the debt terminates.

This table consolidates the concrete manifestations of the "unlawful registration" concept, which forms the basis of the action, in one place. It provides the reader with a quick and clear overview of the situations in which the action can be filed. By simplifying legal complexity, it helps categorize potential lawsuit situations. This serves as both a checklist for lawyers and a learning tool for general legal readers, as it clearly outlines which fundamental legal defects must be sought for the action to be filed.

4. Parties to the Action for Cancellation of Pledge Registration

Correct determination of the parties in an action for cancellation of pledge registration is of great importance for the procedural economy of the lawsuit.

4.1. Plaintiff Status

In an action for cancellation of pledge registration, the plaintiff is the owner of the pledged immoveable property. If the immoveable property has changed hands, the new owner also has the right to file this action. Especially in actions for cancellation of pledge over family homes, the non-owner spouse also has plaintiff status pursuant to Article 194 of the Turkish Civil Code.

The fact that the non-owner spouse has plaintiff status demonstrates how principles of property law are intertwined with the protective provisions of family law. While real rights actions are normally filed only by the owner, the exception introduced by TCC Art. 194 reflects the purpose of protecting the family unit. This shows that the legislator views the family home as a guarantee of housing rights not only for the owner spouse but for the entire family. This is an important example demonstrating that property rights are not absolute and can be limited in favor of social and family interests.

4.2. Defendant Status

The defendant is the secured creditor in whose favor the pledge is registered in the land registry. This creditor can typically be a bank or a real person. If the creditor has passed away, their heirs are designated as defendants.

5. Competent and Authorized Court

Correct determination of the competent and authorized court in an action for cancellation of pledge registration is critical for the healthy progress of the lawsuit.

5.1. Authorized Court (Venue)

Since the action for cancellation of pledge registration relates to the in rem right of the immoveable property, it is subject to the rule of exclusive jurisdiction pursuant to Article 12 of the Code of Civil Procedure. According to this rule, the court where the pledged immoveable property is located has jurisdiction. This rule of jurisdiction is a matter of public order, is observed ex officio by the judge, and cannot be altered by agreement of the parties.

5.2. Competent Court (Subject Matter Jurisdiction)

The competent court may vary depending on the nature of the debt relationship between the parties. The general competent court is usually the Civil Court of First Instance. This is because the cancellation of a pledge is a matter related to property rights. However, there are exceptions to this general rule:

• Consumer Court: The Consumer Court has jurisdiction in actions for cancellation of pledge filed due to housing loans and consumer loans. In such cases, there is no obligation to apply to the consumer arbitration committee.
• Family Court: If an action for release of pledge has been filed based on allegations that a pledge was established over immoveable property related to a family home without the consent of the other spouse, the Family Court has jurisdiction.
• Commercial Court: In pledges given based on commercial loans, the action for cancellation of pledge is heard in the Commercial Court.

The Court of Cassation has accepted that the competent court in an action for cancellation of pledge should be determined according to the nature of the contract that gave rise to the debt relationship. This situation is a reflection of the Turkish judicial system's legal policy aimed at specialization and assigning specific courts to particular areas of law. Correct determination of the competent court is vital to prevent the action from being dismissed on its merits or a decision of lack of jurisdiction being rendered. This complexity requires lawyers to meticulously analyze the legal nature of the underlying debt relationship before filing a lawsuit.

6. Burden of Proof and Time Limit for Filing an Action

6.1. Burden of Proof

In an action for cancellation of pledge registration, the burden of proof lies with the plaintiff. The plaintiff is obliged to prove that the pledge registration is unlawful. If the claim is that the claim terminated as a result of performance (payment), this must be proven with conclusive written evidence. Payment receipts, bank statements, and releases indicating that the debt has been paid are of great importance at this point. In pledges over family homes, the burden of proving the existence of the spouse's express consent lies with the party making the disposition (generally the owner-spouse who established the pledge or the creditor bank).

The burden of proof resting with the plaintiff demonstrates that proactive evidence management and professional legal advice are indispensable in legal proceedings. It is understood that the plaintiff must meticulously keep concrete and written evidence of having paid the debt, otherwise, even if they are in the right, they may have difficulty proving their case.

6.2. Time Limit for Filing an Action

There is no statute of limitations or forfeiture period for the action for cancellation of pledge registration. This action can be filed at any time. This is a general characteristic of land registry rectification actions; as an unlawful registration can always be rectified. Although the time limit for filing an action for the release of pledge starts after the debt has been paid, no forfeiture period has been determined. However, since the house can be sold due to the pledge, it is advisable to exercise legal rights immediately after the debt.

The fact that this action is not subject to a statute of limitations or forfeiture period shows that the right of ownership has perpetual protection against restrictions arising from an unlawful entry in the land registry. While many other claims or types of actions have a statute of limitations, the fact that such a rectification action based on a real right is perpetual reinforces that ownership is an absolute and strong right. This allows immoveable property owners to have the opportunity to remove erroneous or legally groundless pledges from land records even after many years. This is a consequence of property security and the principle of keeping the land registry accurate.

6.3. Cancellation Process and Time Limit Under Article 153 of the Enforcement and Bankruptcy Law

Pursuant to Article 153 of the Enforcement and Bankruptcy Law, if a debtor of a due and secured debt applies to the enforcement office, and the creditor is absent, unknown, or refuses to accept payment and release the pledge, the enforcement office grants the creditor 15 days to collect the money and release the pledge. If the creditor does not appear within this period, the enforcement office sends the file to the enforcement court. The enforcement court then decides to deposit the money in the creditor's name and cancel the pledge. This decision is notified to the land registry office and registered in the records of the pledged immoveable property.

Pursuant to Article 883 of the Turkish Civil Code, in fixed-term pledges, if the annotation specified in Article 150/c of the Enforcement and Bankruptcy Law is not entered within thirty days from the end of the term, the pledge is cancelled by the land registry directorate upon the owner's request.

7. Conclusion

The action for cancellation of pledge registration is a fundamental legal mechanism that protects the immoveable property owner's right of ownership against an unjust or legally groundless pledge annotation in the land registry. This action ensures that the land registry is brought into conformity with the truth, within the framework of the principles of reliability and public notice of the land registry. It functions as an exception to or a rectification mechanism for the principle of reliability of the land registry. Although the principle of reliance on the land registry protects the good faith of third parties, the need to protect the owner's right in case of unlawful registration emphasizes the necessity for the registry to conform to the material truth. This shows that legal certainty is achieved not only by relying on the registration but also by protecting the legal reality underlying the registration.

The precedents of the Court of Cassation play a decisive role in shaping the practice regarding conditions of the action, burden of proof, and competent and authorized courts. Especially in sensitive matters such as family homes, the protective approach of the Court of Cassation adds depth to the legal provisions.

This action, in addition to ensuring legal certainty, is an important tool for resolving disputes between parties through judicial means. The obligation of creditors to cancel the pledge when the debt relationship terminates is of great importance in preventing future lawsuits. This also increases the responsibility of creditors to cancel the pledge when the debt terminates, as an unlawful entry in the registry can be litigated indefinitely.