TÜRKIYE Law and Practice Contributed by: Serkan Gül, Nazım O Kurt and Türkay Avanaş, Hergüner Bilgen Üçer Attorney Partnership
3.4 Taxes or Fees Relating to the Granting and Enforcement of Security Stamp tax (0.948% of the amount subject to mortgage) and a mortgage fee (0.455% of the amount subject to mortgage) are paid for the establishment of a mortgage. Foreign finan - cial institutions are exempt from taxes and fees arising out of securities granted over real estate. The fee for enforcement proceedings is approximately 0.5% of the amount subject to mortgage. In accordance with a recent change in the legislation, there is now an exemption for half of the mortgage fee (0.227%) for mortgages established between companies. 3.5 Legal Requirements Before an Entity Can Give Valid Security Under Turkish law, target companies are pro - hibited from providing funds, loans, securities or guarantees to a buyer to facilitate the acqui - sition of their own shares, and such financial assistance transactions will be deemed null and void. This provision does not apply to (i) transac - tions conducted for the purpose of the activity of financial institutions and (ii) securities, advance payments and loans granted to employees of the target company or its parent company in order that they may acquire the shares of the company. When granting upstream security or guaran - tees for a parent company, it may be difficult for board members to specify a convincing rea - sonable cause for the subsidiary to enter into such an arrangement to the benefit of its holding company or other group companies. 3.6 Formalities When a Borrower Is in Default Under Turkish law, the creditor beneficiary of a mortgage must initiate an execution proceed - ing to liquidate the mortgage. Depending on the
Principal amount mortgages Principal amount mortgages are established to secure amounts that have already been lent to borrowers and contain the unconditional and absolute debt acknowledgement of the borrow - er. Although the amount of the mortgage only shows the principal amount of the loan lent, the lender may request: • the principal amount; • foreclosure expenses and default interest; • accrued contractual interest; and • expenses incurred by the mortgagee(s) that were mandatory to preserve the value of the mortgaged property (including disbursement of insurance premiums that were the mort - gagor’s responsibility). Maximum amount mortgages Maximum amount mortgages secure an amount that is higher than the principal amount, incor - porating in advance various expenses that may be incurred by the mortgagee, and do not permit the collection of any amounts above the ceiling amount. Other Structures Available Sale and leaseback structures can also be used for acquisitions of commercial real estate. Final - ly, Islamic finance-designed instruments such as sukuk may also be utilised. 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders Securities are granted over real estate to foreign financial institutions without any restrictions. Repayments to foreign lenders under a security document or loan agreement are made without any restriction unless repayment constitutes a criminal act (eg, money laundering).
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