TÜRKIYE Law and Practice Contributed by: Serkan Gül, Nazım Kurt and Türkay Avanaş, Hergüner Bilgen Üçer Attorney Partnership
and repurchase, must be registered to ensure validity. Given the definitive authority carried by title records, which are open to the public for inspection, title insur - ance is not at all prevalent with virtually no risk to insure against. 2.4 Real Estate Due Diligence When purchasing real estate, buyers generally engage lawyers for due diligence purposes. Lawyers inspect the land registry records and the usage restrictions included in the zoning plans for the particular locality through the relevant municipalities. As the land reg - istry records are authoritative, a thorough inspection of these public records generally suffices to provide assurance to purchasers in terms of the property rights of the seller and any encumbrances over the target property. In addition, a review of the municipal - ity files reveals any non-compliance with the zoning plans and the relevant construction and occupancy permits determined by the relevant municipality. Specifically for real estate used for tourism activities, agreements and deeds establishing the relevant inves - tor’s right to enjoy shores and forests are reviewed as well. Additionally, technical consultants are appointed for environmental and technical due diligence matters. 2.5 Typical Representations and Warranties The types of representations and warranties given in real estate sales differ significantly depending on how the sale is structured. Asset sales typically entail very limited representations and warranties, given that comprehensive and definitive information about the encumbrances on land, including granted ease - ments, established security and pre-emptive rights, are all revealed in public records. On the other hand, if the deal is structured as a share sale, with the enti - ty holding the asset changing hands rather than the underlying asset itself, extensive representations and warranties are generally demanded. Customary buyer’s remedies include compensation or purchase price adjustment, and a letter of guarantee from the seller or retention of a part of the purchase price typically act as security for the enforcement of these remedies. It is customary for the seller’s rep - resentations and warranties to expire after two to three years, and in the case of tax obligations, after
six years. There is typically a cap on the seller’s liabil - ity in the amount of 15–30% of the purchase price. However, for some important representations and warranties, eg, relating to the ownership rights of and encumbrances on the target property, this cap can increase to up to 100% of the purchase price. Envi - ronmental representations and warranties are occa - sionally demanded but are seldom granted. 2.6 Important Areas of Law for Investors Real estate law sits at the crossroads of constitutional law, private law and administrative law. As noted in 1.1 Main Sources of Law , property rights are guaran - teed by the constitution and international treaties. At a more local level, the most important area of law for a purchaser to keep in mind is property law, given that it determines the rights and obligations conferred to owners of real property. The Turkish Code of Obliga - tions is also important in that it defines the rules and principles governing contracts related to real property (sale agreements, lease agreements, etc). Next, the Zoning Law should be kept in mind as this determines the uses to which real estate can be put. A purchaser should also be mindful of secondary rules govern - ing the issuance of construction and usage permits. Lastly, land registration laws are also fairly important, given that they determine what information about real property can be gleaned from land registry records. 2.7 Soil Pollution or Environmental Contamination The obligation to comply with environmental regula - tions is generally imposed on owners of real property rather than the property itself. As such, a buyer of real property is in principle not responsible for any contamination that took place prior to their taking ownership. However, contamination may carry with it the presumption that the current occupant caused the contamination, and in such an event, the occupant may need to defeat that presumption by proving that it was an earlier occupant who caused the contami - nation. This is one area where due diligence findings may prove useful. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law A buyer can ascertain the permitted uses of a par - cel of real estate by consulting the zoning plans, the
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