Preliminary agreement for the sale of immovable properties (real estate) is a type of agreement aimed at transferring a specific immovable property in the future, within the framework of previously agreed conditions, and imposes obligations on both parties. This contract is a preliminary agreement, wherein the seller promises to transfer the immovable property on a certain date, and the buyer promises to purchase the property. Essentially, it is based on one party committing to the sale of the immovable property, while the other party agrees to accept this commitment and purchase the property at a later date.

This contract is solely related to the future title deed transfer of the immovable property and creates a legal bond between the two parties. The ultimate goal of the Preliminary Agreement for the Sale of Immovable Property is to ensure the fulfillment of the necessary conditions for the transfer of the immovable property at the title deed office by the end of the contract period. The creditor and debtor status of the parties continues until the transfer of the immovable property is completed within the designated time frame. This contract serves as a preparatory step for the sale of the immovable property and typically aims to establish trust between the seller and buyer.

1. Preliminary Agreement for the Sale of Immovable Property for Property Owned by Another Person

Preliminary Agreement for the Sale of Immovable Properties can also be executed by individuals who do not have property ownership rights, not just by the owner of the immovable property. In this case, the ownership of the immovable property may not exist at the time the sale promise contract is signed. The sale promise contract contains a commitment that the title deed transfer and property ownership will occur at a later date. For example, if the person entering into the sale promise contract does not yet own the property, they can still promise to complete the transfer of ownership in the future.

In such cases, the party who made the promise is considered to have violated the contract if they do not complete the title deed transfer. This results in liability for compensation under the Turkish Code of Obligations (“TCO”). Even though the ownership right is not yet in place, such sale promise contracts still carry legal binding force for a future sales contract. Until the property is transferred at the title deed office, the buyer has the right to claim compensation from the seller based on the contract's provisions.

2. Conditions for Validity of Preliminary Agreement for the Sale of Immovable Properties

The validity of all contracts regarding the transfer of real estate ownership is subject to the fulfillment of legally prescribed formal conditions. According to Article 706 of the Turkish Civil Code (“TCC”), in order for contracts concerning the transfer of real estate ownership to be valid, they must be made in a formal manner. This applies in the same way to real estate sale contracts; if a real estate sale contract is not made formally, it is considered invalid, and no binding relationship exists between the parties.

3. Formal Requirements for a Preliminary Agreement for the Sale of Immovable Property

A Preliminary Agreement for the Sale of Immovable Property is a preliminary agreement containing a commitment for the future transfer of property ownership at the title deed office. In order for such contracts to be valid, they must be made in the presence of a notary and in the form of an official document, as specified by Article 29 of the TCO and Articles 60/3 and 89 of the Notary Law. The notarial procedure is a formal condition of the contract, which is related to public order and is legally required. Contracts that are only approved by the notary without being duly regulated are invalid. Therefore, it is a requirement that the Preliminary Agreement for the Sale of Immovable Property be made in the presence of a notary.

4. Requirement for the Property to Be Registered in the Title Deed

For a Preliminary Agreement for the Sale of Immovable Property to be valid, the property in question must be registered at the title deed office. According to Article 1008 of the TCC, the registration of the property in the title deed ensures the security of ownership rights. Sale promise contracts for properties that are not registered in the title deed are invalid and do not create any legal binding effect. Therefore, any sale promise contract made for an unregistered property is considered legally invalid.

5. Situations Involving Joint Ownership of the Property

If the property involved in the Preliminary Agreement for the Sale of Immovable Property is jointly owned, the sale promise contract is considered a debt-generating transaction. For example, in the case of a property inherited through joint (participatory) ownership, if one of the heirs promises to sell their share of the property, the contract will be valid as a commitment agreement. However, it is important to note that a Preliminary Agreement for the Sale of Immovable Property is not binding unless all heirs agree. If only one heir signs the contract, it does not bind all heirs. Nevertheless, the sale promise contract still functions as a commitment, and under the TCO, the parties are obligated to fulfill their duties. The party failing to meet their obligation will be in default.

6. Specification of the Payment Amount and Terms

In a Preliminary Agreement for the Sale of Immovable Property, the amount to be paid by the buyer must be clearly specified. In addition to the payment amount, the payment method (e.g., lump sum payment or installment payment) must also be clearly outlined in the contract. The specification of the payment method and timing is crucial to the validity of the contract and to protect the parties’ rights. The party committing to the purchase must fulfill their obligation to pay the specified amount, so determining the payment method and time is essential to avoid potential disputes.

7. Compliance with Zoning Legislation and Properties Without Zoning Plans

When entering into a Preliminary Agreement for the Sale of Immovable Property, it is important to consider whether the property in question complies with zoning legislation. According to the last paragraph of Article 18 of the Zoning Law No. 3194, a sale promise contract cannot be made for properties located in areas without a zoning plan. Additionally, properties inherited, co-owned, or designated for agricultural, livestock, tourism, industrial, or storage purposes, as well as properties sold through compulsory enforcement, cannot be the subject of a sale promise contract. Properties with special parceling plans are also excluded from such contracts under zoning regulations. This condition affects the validity of the contract, and any sale promise contract made for such properties will be considered invalid.

8. Obligations of the Parties in a Preliminary Agreement for the Sale of Immovable Property

The parties to a Preliminary Agreement for the Sale of Immovable Property are required to fulfill certain obligations. The party making the sale promise commits to transferring the property under the specified conditions and on the agreed date. Even if the seller does not own the property at the time the sale promise contract is made, they are expected to acquire ownership by the time the transfer is made. If the seller fails to transfer the property on the specified date, they are required to pay compensation to the buyer under the TCO.

The buyer, on the other hand, is obligated to pay the specified amount and adhere to the payment terms. The buyer must be ready to take possession of the property and pay the agreed amount according to the terms. These obligations clearly define the debt relationship between the parties, and any failure to fulfill these obligations may result in legal penalties under the TCO.

In such contracts, multiple sale promise contracts may sometimes be made. In this case, the first contract made takes precedence, and the other contracts may become invalid. This is referred to as the "priority" principle, which is important in determining the validity of the contracts between the parties.

9. Termination of the Preliminary Agreement for the Sale of Immovable Property

The termination of a Preliminary Agreement for the Sale of Immovable Property may occur in several different ways. The contract may end when both parties fulfill their obligations. Additionally, failure to meet the conditions specified in the contract or the unilateral termination of the contract may also result in its termination.

If the contract is not fulfilled on the agreed date and under the agreed conditions, the buyer or seller may unilaterally terminate the contract. Another termination scenario occurs when the actions specified in the contract are subject to the statute of limitations. In this case, the provisions of the contract will no longer be valid, and no debt relationship will continue between the parties.

The statute of limitations is an important factor in the validity of Preliminary Agreement for the Sale of Immovable Properties. The statute of limitations for such contracts is generally set at 10 years under the TCO. However, this period may be suspended if performance of the contract is prevented, and the statute of limitations will be recalculated accordingly.

10. Statute of Limitations in a Preliminary Agreement for the Sale of Immovable Property

The statute of limitations plays an important role in the validity and applicability of a Preliminary Agreement for the Sale of Immovable Property. To prevent any claim from falling under the statute of limitations, the parties must fulfill their contractual obligations within a specified time. This period is set at 10 years according to the relevant provisions of the TCO.

The statute of limitations begins when the conditions for fulfilling the obligations of the contract are met. However, if a legal obstacle, such as a precautionary measure during title deed transactions, arises, the statute of limitations will be suspended until the obstacle is lifted. Once the obstacle is removed, the statute of limitations will resume.

Waiver of the statute of limitations is also common. However, under the TCO, the parties cannot waive the statute of limitations in advance. Therefore, including a provision in the contract waiving the statute of limitations will be legally invalid.

11. The Annotation of the Preliminary Agreement for the Sale of Immovable Property to the Land Registry

In order to protect the rights arising from a Preliminary Agreement for the Sale of Immovable Property and ensure its validity against third parties, the agreement must be annotated to the land registry. Annotating the agreement ensures that the claim arising from the contract produces real (property-related) effects. This means that the rights of the parties to the agreement are recognized by others.

The annotation procedure is carried out by applying to the Land Registry Office after the notary's approval, and it remains valid for five years. If the transfer of the property does not occur within this period, the annotation becomes invalid. In this case, the annotation of the sale promise agreement loses its legal binding nature, and no claim arising from this agreement can be pursued by the parties.

12. Mortgage and Collateral in the Preliminary Agreement for the Sale of Immovable Property

In a Preliminary Agreement for the Sale of Immovable Property, the buyer or seller may request certain collateral or mortgages. These guarantees aim to compensate for potential damages in case the agreement is not performed. The buyer may establish a mortgage on the property if the seller fails to fulfill their obligations. This mortgage provides a security for the buyer's interests and facilitates the buyer’s claim for the property’s price if the sale promise is not executed.

On the other hand, the seller may retain the right to repossess the property in case the buyer fails to fulfill their payment obligations. This way, the seller ensures their interests by placing a mortgage on the property in case the buyer fails to make payment. Such collateral arrangements make the Preliminary Agreement for the Sale of Immovable Property more secure and grounded.

Additionally, if either party fails to meet their legal responsibilities, the mortgage or other collateral specified in the agreement may be used to recover the damages through the sale of the property or by selling it at a specified price. Mortgages and other guarantees play an essential role in resolving potential disputes related to real estate sales.

14. Legal Risks of the Preliminary Agreement for the Sale of Immovable Property

The Preliminary Agreement for the Sale of Immovable Property carries certain legal risks for both the buyer and the seller. The greatest risk is the failure to fulfill the terms of the agreement. For instance, if the seller does not transfer the property on the specified date, the buyer may demand compensation. However, there is also a similar risk for the seller. If the buyer does not make the payment on the specified date, the seller can seek compensation and potentially cancel the sale.

Another risk is the invalidity of the agreement. Preliminary Agreement for the Sale of Immovable Properties that are not notarized may be deemed invalid, preventing the parties from fulfilling their legal obligations. Moreover, if the agreement is not annotated to the land registry, its validity may be questioned and potentially invalidated.

15. The Transferability of the Preliminary Agreement for the Sale of Immovable Property

The transfer of a Preliminary Agreement for the Sale of Immovable Property is only possible if explicitly stated between the parties. The buyer may transfer their rights under the sale promise agreement to another person, depending on the conditions stated in the agreement. However, the transfer can only occur with the consent of the parties, usually with the seller's approval.

If the seller has not allowed the buyer to transfer their rights, the buyer cannot assert any claim over the transferred property. However, legal challenges regarding the transfer may arise if a dispute occurs between the buyer and seller. In such cases, the contract's terms can be clarified to determine whether the transfer is valid.

16. Clarification of Terms and Conditions in the Preliminary Agreement for the Sale of Immovable Property

It is critical that the Preliminary Agreement for the Sale of Immovable Property is clear, precise, and understandable for both parties. Ambiguities in such contracts can lead to disputes between the parties and jeopardize the validity of the contract. Carefully determining the conditions of the agreement plays a vital role in preventing potential legal issues. Therefore, every detail in the agreement must be defined clearly. These details may include the full address of the property, the sale price, payment terms, payment dates, the transfer date of the title deed, the contract duration, and the parties’ obligations.

Additionally, special provisions may be included in the agreement. For example, penalties for failure to make payments within a specified period, delays in delivery, and the responsibilities arising from these delays should be explicitly outlined. A detailed contract allows both parties to fulfill their obligations and helps resolve potential legal disputes.

17. Land Registry Procedures in the Preliminary Agreement for the Sale of Immovable Property

One of the most important steps in the Preliminary Agreement for the Sale of Immovable Property is the land registry procedures. During the period between the signing of the sale promise agreement and the transfer of the property title, the parties’ responsibilities and obligations should be clearly defined. After the agreement, the seller is obligated to transfer the property on the specified date. The title deed transfer process takes place when both parties visit the land registry office.

Another important issue during the property’s registration in the land registry is whether there are any mortgages or liens on the property. If legal obstacles exist on the property, the necessary actions must be taken to remove these encumbrances. Any delays in the land registry procedures may constitute a breach of the agreement, and the parties may seek legal remedies to assert their rights.

18. Conclusion

The Preliminary Agreement for the Sale of Immovable Property plays an important role in property transactions. This agreement represents a commitment by both parties to fulfill certain obligations for a future sale. The seller has the obligation to transfer the property on the specified date, while the buyer is obliged to make payment. If either party fails to fulfill these obligations, compensation, contract termination, and other legal sanctions may apply.

When structured accurately and in detail, the agreement provides a secure framework for the parties and facilitates more orderly property sales. However, considering the potential legal risks and obstacles is crucial to ensuring that both parties can protect their rights. A well-structured Preliminary Agreement for the Sale of Immovable Property provides a secure foundation for both the buyer and the seller and minimizes potential disputes between the parties.