1. The Constitution of Communal Living: The Management Plan

As defined in the first paragraph of Article 28 of the Condominium Law No. 634, the Management Plan is a contract that determines the administrative style, purpose and methods of use, fees for managers and auditors, and all other fundamental provisions related to the administration of a real estate (apartment building or site), binding all flat owners.

This document must be signed by all owners and registered in the land registry (CML Art. 12/b) at the time the property is established, i.e., when condominium ownership is constituted. Consequently, subsequent property owners are also subject to this plan. The primary purpose of the management plan is to minimize potential disputes arising from communal living, offer solutions to problems that emerge, and establish a transparent framework for the administration of the real estate. Pursuant to CML Art. 28/4, the management plan and any amendments made to it bind all flat owners, their heirs, their universal and particular successors, and the managers and auditors.

2. Can Site Managements Impose Monetary Fines?

One of the most frequently asked questions in practice is whether the site management or the manager can impose monetary fines on flat owners or other residents who do not comply with the rules. This issue must be evaluated within the framework of a significant principle in our legal system: "the principle of legality of penalties." According to this principle, for an act to be considered a crime or a misdemeanor, and for a penalty to be applied, this must be explicitly regulated by law.

The Condominium Law does not contain a provision that directly grants the site manager or the board of management the authority to impose monetary fines. Therefore, even if included in the management plan, the direct application of an administrative monetary penalty by the management is not legally valid.

For example, even if a management plan includes an article stating, "barbecuing in the common garden is prohibited, and those who do so will be fined X TL," the management does not have the authority to directly collect this fine.

However, this does not mean that non-compliant behaviors will go unpunished. Article 33 of the CML offers a solution for such situations. If a flat owner or someone benefiting from their unit (tenant, resident, etc.) fails to fulfill their obligations, the aggrieved flat owner(s) or the manager have the right to apply to the civil court of peace located where the main real estate is situated and request the intervention of the judge. After hearing the parties, the judge will render a decision in accordance with the law, the management plan, and principles of equity, granting a period for the rectification of the non-compliance. If the court order is not fulfilled within this period, the judge may impose an administrative monetary fine on the relevant person. As can be seen, the authority to impose monetary fines belongs to the judiciary, not directly to the management.

3. Sanctions in the Management Plan: The Concept of Penalty Clause

Although site management does not have the authority to impose monetary fines, "penalty clauses" in the form of certain financial obligations may be stipulated in management plans. A penalty clause in contract law is a form of compensation agreed upon to be paid in case of a breach of a contractual provision. Since the management plan is also a contract, a penalty clause can be foreseen in case of non-compliance with certain obligations (e.g., late payment of dues, damage to common areas, non-compliance with determined rules).

4. Can a Penalty Clause Be Added to the Management Plan? What are the Conditions?

Provisions in the nature of penalty clauses can be included in management plans, provided they do not contravene the mandatory provisions of law, public morals, and public order. Such provisions aim to secure the performance of "doing," "not doing," "giving," or "suffering" obligations that flat owners must comply with when using their independent sections and common areas.

For example, a management plan might include rules such as "no noise outside designated hours" or "no littering in common areas," and provisions stating that a certain amount of penalty will be paid in case of non-compliance with these rules.

5. Legal Validity and Limits of Penalty Clauses in the Management Plan

For penalty clauses added to the management plan to be valid, certain basic criteria must be met:

• Compliance with Law: Penalty clauses must not contradict the mandatory (compulsory) provisions of current laws, especially the CML.
• Clarity and Certainty: The obligation and the penalty clause to be applied in case of non-compliance must be defined clearly, precisely, and understandably.
• Binding Issue: According to the established jurisprudence of the Court of Cassation, penalty clause provisions in the management plan are fundamentally binding only for the flat owners who accepted and signed that management plan. This is an important detail. Although CML Art. 28/4 generally states that the management plan binds all owners and their successors, the Court of Cassation issues decisions indicating that especially subsequently added or purely contractual penalty clauses, rather than those based on a legal foundation, will not bind subsequent owners or tenants who did not sign the plan. This situation can also raise "equality principle" discussions, especially for older management plans and new owners.

For example, if a management plan contains a provision stating, "if pets are walked outside designated areas, an X TL penalty will be applied," and this plan was only signed by the initial owners, directly applying this penalty clause to a subsequent owner who did not sign the plan could be problematic in light of the Court of Cassation's jurisprudence.

6. The Court of Cassation's Approach: Evaluation in Light of a Precedent-Setting Decision

The decision of the 5th Civil Chamber of the Court of Cassation, numbered 2022/4871 E., 2022/9631 K., reflects an important precedent on this matter. In summary, the decision states:

• Flat owners are obliged to comply with rules of honesty, not to disturb each other, not to infringe upon each other's rights, and to abide by the provisions of the management plan, pursuant to CML Art. 18.
• It was emphasized that intervention by a judge can be requested concerning those who fail to fulfill their obligations, pursuant to CML Art. 33.
• It was stated that, according to CML Art. 28/1, the management plan has the force of a contract binding all flat owners.
• However, the Court of Cassation made an important distinction in this decision: It stated that arrangements in the management plan of the main real estate, which are outside the general obligations stipulated in the Condominium Law (e.g., a specific prohibition like not leaving shoes in front of the door with a linked penalty clause), are binding only for the flat owners who signed it. It was explicitly stated that contractual obligations such as penalty clauses under the Turkish Code of Obligations will not bind subsequent owners.
• The Court of Cassation recalled that the CML enumerates the obligations that flat owners are bound by, and CML Art. 33 specifies what should be done in case of non-compliance (i.e., judicial intervention).

This decision indicates that not every penalty clause in the management plan will automatically be binding, especially for subsequent owners and tenants who did not sign the plan, and that such requests should be carefully evaluated by the courts.

7. Conclusion

Site managements, lacking explicit authority in the Condominium Law, do not have the power to directly impose monetary fines on flat owners or other residents. The inclusion of such authority in the management plan does not change this situation. However, management plans can stipulate financial obligations in the nature of "penalty clauses," provided they are not contrary to the law. The applicability of these penalty clauses and who they bind must be evaluated on a case-by-case basis, especially considering the Court of Cassation's jurisprudence that such clauses may not be enforceable against subsequent owners who did not sign the management plan. The most sound and legal way for non-compliant residents is to apply to the civil court of peace for judicial intervention pursuant to CML Art. 33. If a court order is not complied with, an administrative monetary fine may then be imposed by the judge.