Real Estate and Commercial Lease Services in Turkey:

Foreign Individuals: Foreign nationals can acquire commercial property in Türkiye provided they hold citizenship in one of the countries specified by Presidential Decree, under the framework where strict reciprocity requirements have been waived for listed countries.

Foreign Legal Entities (Foreign Companies): Commercial companies incorporated abroad under their own national laws can only acquire real estate in Türkiye if allowed under specific statutory provisions, such as the Turkish Petroleum Law No. 6491, the Tourism Incentive Law No. 2634, or the Industrial Zones Law No. 4737. Foreign companies operating outside these specialized statutory frameworks cannot directly hold title deeds (tapu).

Foreign-Capitalized Turkish Companies: Companies established in Türkiye that have foreign shareholders, where foreign investors hold 50% or more of the shares or control the management rights, can acquire real estate to carry out the business activities listed in their articles of association, subject to review and clearance by the local Governorate under Law No. 4875 and its implementing regulation.

• Acreage Limits for Individual Buyers: A foreign individual can acquire a maximum of 30 hectares of real estate nationwide. Total foreign ownership cannot exceed 10% of the private land area in any given district.
• Military and Security Zones: Property acquisitions in military forbidden zones and security zones are prohibited or subject to specialized military and administrative clearances.
• Project Approval for Undeveloped Land: Foreign individuals acquiring undeveloped land, such as plots or farmland, must submit an intended project for approval to the relevant Ministry within two years of acquisition.
• Governorate Clearance: Acquisitions by foreign-capitalized Turkish companies are reviewed for military and security zone compliance by a commission operating under the local Governorate’s Department of Provincial Planning and Coordination.

Administrative Approval: Individual acquisitions generally proceed directly to title deed transfer, subject to standard country-list and military-zone checks. Acquisitions by foreign-capitalized companies require formal Governorate commission review and clearance.

Tax Liabilities: For individual buyers, capital gains from selling real estate held for more than five years are exempt from Income Tax. For corporate acquisitions, gains are subject to Corporate Income Tax, and VAT or withholding tax exemptions are strictly conditional.

Liability and Risk Management: Purchasing through a corporate entity limits ownership liabilities and legal risks to the company’s legal person. Individual acquisitions expose the buyer directly to personal, financial, and legal liabilities.

• Parties and Property Identification: Full corporate or personal identification details, notification addresses, and official title deed and address details of the leased property.
• Rent Amount and Payment Terms: Net or gross rent amounts, payment schedules, bank account details, and designated payment currency.
• Term and Renewal Conditions: Start and end dates of the lease, together with explicit renewal terms.
• Rent Escalation Formula: Adjustment rates and calculation mechanisms that comply with statutory limits.
• Permitted Use and Subleasing: The permitted commercial use of the premises and rules regarding subleasing or assignment rights.
• Taxes and Operational Expenses: Allocation of withholding tax (stopaj), VAT, common area maintenance fees, property taxes, and maintenance or repair duties.
• Security and Termination: Security deposit conditions, contractual penalties (cezai şart), and grounds for early termination.

Implementation: Turnover-based rent is common in shopping centers and retail locations. It can be structured as turnover-only rent, minimum base rent plus a turnover percentage, or base rent versus turnover percentage, whichever is higher.

• Definition of Turnover: The agreement should specify the treatment of VAT, product returns, discounts, e-commerce sales processed on-site, and shipping fees.
• Audit Rights: The landlord should have express rights to inspect financial records, point-of-sale terminal data, and independent audit reports.
• Thresholds: The agreement should set clear sales-volume thresholds and monthly or annual evaluation periods for applying turnover percentages.

Law No. 805 on Mandatory Use of Turkish: Turkish companies and corporate entities must execute agreements among themselves or with Turkish citizens in Turkish.

Dual-Language Contracts: When a foreign party is involved, agreements can be drafted in a dual-language format, such as English and Turkish. Before Turkish courts and enforcement offices, the Turkish text controls or a certified Turkish translation will be required. A clause stating that the Turkish text prevails in the event of discrepancies is standard practice.

Statutory Cap: Under Article 344 of the Turkish Code of Obligations, rent escalation for renewed commercial lease periods cannot exceed the preceding lease year’s 12-month average Consumer Price Index rate.

Negotiation Limits: Parties may agree to a lower adjustment rate, but a contractual increase above the statutory CPI cap is void to the extent of the excess.

Foreign Currency Leases: Foreign-currency or currency-indexed commercial leases cannot be increased for five years, subject to exceptions under Presidential Decree No. 85 and Decree No. 32 on the Protection of the Value of the Turkish Currency.

• Ownership and Title Deed Audit: Land registry entries, encumbrances, annotations (şerh), declarations, easements, mortgages, and attachment orders (haciz).
• Zoning and Permitting: Zoning plans, building permits (yapı ruhsatı), occupancy permits (iskân), unauthorized construction, and zoning violations.
• Lease and Occupancy: Existing leases, rental yields, validity of eviction undertakings, and unauthorized occupants (fuzuli işgal).
• Taxes and Municipal Liabilities: Outstanding property taxes, environmental taxes, and administrative fines.
• Historical Site and Pre-emption Rights: Conservation-board restrictions and statutory pre-emption (şufa) rights affecting the property.

Mortgages and Attachments: A buyer can theoretically purchase property subject to existing encumbrances. Standard commercial practice, however, requires the seller to clear the debt and discharge the mortgage or attachment before closing. Alternatively, the relevant amount can be deducted from the purchase price and paid directly to creditors at closing.

Registered Annotations: Personal rights registered on the title deed, such as leasehold rights or promises of sale, bind the new owner. Their duration, terms, and cancellation mechanisms must be audited before transfer.

• Title deed (tapu senedi) or property registration details.
• Identity documents and certified passport translations for foreign buyers.
• For corporate entities, a certificate of authorization (yetki belgesi), signature circular, tax registration plate, and commercial registry gazette.
• Municipal Fair Market Value Certificate (Emlak Vergisi Rayiç Değer Belgesi).
• Real Estate Valuation Report for transactions involving foreign parties.
• Mandatory Earthquake Insurance (DASK) for qualifying independent building units.
• Governorate clearance letters where foreign legal entities or foreign-capitalized companies are involved.

Rent Determination Lawsuit under TCO Article 344/3: For leases exceeding five years or renewed after five years, either party can request judicial redetermination of rent based on market comparables, equity, and CPI rates without being bound by the annual CPI cap.

Contract Adaptation under TCO Article 138: If unforeseen and extraordinary developments, such as severe economic crises, warfare, or natural disasters, make performance excessively burdensome after signing, a party can request adaptation before the five-year threshold.

• 10-Year Extension Period: For roofed commercial leases, after the initial term plus 10 extension years, the landlord may terminate without cause by giving written notice at least three months before the end of a subsequent extension year.
• Written Eviction Undertaking: If signed after possession for a specific vacation date, proceedings must be initiated within one month after that date.
• Two Justified Written Warnings: Where rent is unpaid twice in one lease year and two justified notices are served, an eviction lawsuit must be filed within one month after that lease year ends.
• Landlord’s Personal or Business Need: If the landlord requires the premises for their own business or for the qualifying needs of their spouse, children, parents, or dependents, the action must be filed within one month after the lease term ends.
• Payment Default: If a formal notice granting the applicable 30-day cure period remains unpaid, the landlord may seek cancellation and eviction.

• Missed Deadlines: Failure to satisfy statutory notice or filing windows can result in procedural dismissal.
• Defective Eviction Undertakings: Undertakings signed with the lease may be invalid due to presumed coercion, and signatures may be contested.
• Invalid Warning Notices: Demands based on increases above statutory limits can invalidate a default notice or the two-warning route.
• Protracted Proceedings: Mandatory pre-litigation mediation and court timelines can create extended financial delay for owners.

Cash Deposit Cap: Under Article 342 of the Turkish Code of Obligations, cash deposits for residential and roofed commercial leases cannot exceed three months’ rent and must be deposited into a joint savings account.

Bank Letters of Guarantee: A commercial guarantee letter should be unconditional, irrevocable, and payable on first demand. It should also include an adjustment mechanism that increases the guarantee amount in line with annual rent escalations.

Mortgage Registration: A mortgage is established through an official contract between the property owner and creditor at the Title Deed Registry and registration in the land register.

Other Rights in Rem: Usufruct, easement, and construction rights are established through official deeds registered at the Title Deed Registry.

• Priority Risk: Mortgage rank is critical; a lower-ranking mortgagee may not recover if higher-ranking claims consume the foreclosure proceeds.
• Foreclosure Risk: Enforcement and auction procedures can be lengthy and may produce a sale price below market value.
• Prior Encumbrances: Existing public claims or senior mortgages reduce the security value of a newly registered mortgage.