The Law on the Amendment of the Law on Judges and Prosecutors and Certain Laws (“Law“) published in the Official Gazette dated 28 June 2022 and numbered 31880 made significant amendments to Notary Public Law No. 1512 and enabled public notaries to execute real estate sales contracts. You may access our legal alert dated 29 June 2022 on this development here.
This regulation authorizing public notaries to execute real estate sales contracts, which has been on the agenda for a long time, was expected to enter into force on 1 January 2023. However, the Presidential Decision (“Decision“) on the Extension of the Period of Provisional Article 21 of the Notary Public Law until 1 July 2023 was published and the Decision postponed the deadline for the completion of the installation of the system required for the sale of real estate by public notaries until 1 July 2023.
In line with these developments, it was expected that the Ministry of Justice would regulate the relevant procedures and principles. In this context, the Regulation on the Procedures and Principles Applicable to Real Estate Sales Contracts Issued by Public Notaries (“Regulation“) was published in the Official Gazette dated 11 January 2023 and numbered 32070 and entered into force on the same date. The provisions of the Regulation will be applied as of the date the establishment of the information system is announced on the official website of the Ministry of Justice.
What does the Regulation introduce?
The main provisions envisaged in the Regulation are as follows:
- Applications regarding the issuance of real estate sales contracts will be made through the Notaries Union of Türkiye’s e-appointment tab available on the e-Government portal.
- The documents requested during the application will be uploaded to the Notaries Union of Türkiye Information System (“TNBBS“), and the originals of the documents will be required to be submitted at the public notary’s office by the parties on the date and time of the appointment.
- The application document will be issued through TNBBS and by a public notary. If the public notary is unable to issue the application document due to a legal or actual obstacle, the application will be rejected by the public notary and the parties will be provided the opportunity to update the public notary information from TNBBS. The parties will be notified of this situation by text message.
- The public notary will use the contract sample prepared by the Notaries Union of Türkiye and registered in TNBBS by considering the form and content of the contract in the Land Registry and Cadastre Information System (“TAKBIS“). Taking this into consideration, together with the provisions of the Regulation that we mentioned regarding the conditions subsequent, it is understood that the provisions of the official deed may be specially regulated by the parties, except for the regulations prohibited in the official deed.
- The real estate sales contract shall not contain any terms and conditions that may impair or nullify the registration.
- The public notary will notify the parties via text message of the e-collection serial number and payment method for the service fee and title deed fee for the transaction, along with the date and time of the appointment for signing the contract. Parties who are not present at the public notary on the appointment date and time will be informed via text message on the day that the transaction can be carried out if they apply to the public notary within 10 days; otherwise the application will be canceled.
- The procedures related to the contract will be carried out by the public notary in person. Accordingly, any restrictions on the real estate, the procedures and principles regarding the restrictions in the legislation on the sale of real estate, the identity of the right holder and whether there is a legal obstacle to the sale of the real estate will be evaluated by the respective public notary.
- Following this evaluation, the contract will be signed by the parties and the contract and related documents will be registered in TAKBIS by the public notary with the document number obtained from TAKBIS and the registration of the real estate in the land registry by the directorate of land registry.
- The title deed will be issued by the public notary following the completion of the registration after the contract is signed.
The amendments to the Notary Public Law and the Regulation aim to finalize the sale of real estate property transactions in a faster and easier manner, and the Regulation sets out the procedures and principles applicable to the real estate property sale contracts to be executed by public notaries. Those who wish to carry out real estate sale transactions before public notaries should follow the announcements regarding the installation of the relevant information system on the official website of the Ministry of Justice.
The Amendments to the Communiqué on Debt Securities No. VII-128.8 (”Debt Securities Communiqué”) and the Communiqué on Asset-Backed and Mortgage-Backed Securities No. III-58.1 (”ABS Communiqué”) entered into force through their publication in the Official Gazette No. 31154 dated June 13, 2020.
The Amendments are in line with the amendments made in the Covered Bonds Communiqué No. III-59.1 on May 14, 2020 (Changes to the Covered Bonds Communiqué), which reflects the approach set forth by the 11th Development Plan for 2019-2023 and the Presidency Annual Program for 2020 for issuances made by mortgage finance institutions (”MFIs”).
Issuance Ceiling Limits
- The issuance ceiling limit in the Debt Securities Communiqué will not be applicable to the debt securities issued by MFIs.
- The limits applicable for the calculation of the issuance ceiling under the ABS Communiqué will not be applicable to the asset-backed and mortgage-backed securities (”ABS” and ”MBS”, respectively) issued by MFIs or funds established by MFIs.
CMB Fee Rates
- The Capital Markets Board (”CMB”) fee rates set forth in the Debt Securities Communiqué will be zero until December 31, 2021 for debt securities issuances to be made by MFIs. As of January 1, 2022, half of the CMB fee rates set forth in the Debt Securities Communiqué will apply for these issuances.
- In ABS and MBS issuances to be made by MFIs, half of the CMB fee rates set forth in the ABS Communiqué will apply. However, the CMB fee rates will be applied as zero per thousand until December 31, 2021.
Considering the potential economic effects of the COVID-19 outbreak, the CMB reduces MFIs’ issuance costs and lifts ceiling to further incentivize their issuances. In this respect, while the CMB invites MFIs to take a more active role in vulnerable economic conditions, it also provides them with a functional support mechanism through the abovementioned exemptions.