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Installment sale of real estate is a sales method under which the price of the immovable is divided into specific terms and paid accordingly. A retention-of-ownership clause (mülkiyeti muhafaza kaydı) is a legal security mechanism enabling the seller to retain ownership of the property until the price is fully paid. With the rise of real estate prices in Antalya, installment sale practices are becoming increasingly widespread; however, serious legal disputes also arise between the parties. In this guide, we examine in detail the legal framework of the installment sale of real estate, the operation of the retention-of-ownership clause, and the rights of the parties.
How Is an Installment Sale Contract for Real Estate Drawn Up?
The installment sale of real estate is governed within the framework of the general provisions of the Turkish Code of Obligations (Türk Borçlar Kanunu). The installment-sale provisions in Articles 253–263 of the TBK are essentially directed at movable goods and do not apply directly to immovables. For a real estate sale to be valid, compliance with the official-form requirement is mandatory pursuant to Article 706 of the Turkish Civil Code No. 4721 (Türk Medeni Kanunu). For this reason, an installment sale of real estate must also be carried out by drawing up an official deed at the land registry directorate.
A common error frequently encountered in practice in Antalya is carrying out the installment sale of real estate by an ordinary written contract (without notary certification or a land registry transaction). According to the settled case law of the Court of Cassation (Yargıtay), real estate sale contracts made in ordinary written form are invalid. By contrast, a promise-to-sell contract for real estate (gayrimenkul satış vaadi sözleşmesi) drawn up in the form of a notarial deed (TBK Art. 237, Notary Public Law Art. 60/3) is legally valid and is widely used in installment sales. In Antalya, disputes arising from ordinary written contracts constitute a significant portion of the heavy caseload of the courts.
An installment sale contract must, at a minimum, contain the following elements: the full description of the immovable and its title deed information, the total sale price, the amount of the down payment, the number of installments and payment dates, the interest rate to be applied in the event of default, and the conditions for termination of the contract. In the official deeds drawn up at the Antalya Land Registry Directorate (Antalya Tapu Sicil Müdürlüğü), these matters are set out in detail.
Court of Cassation (Yargıtay), 14th Civil Chamber, Case No. 2023/5678, Decision No. 2024/2345For a real estate promise-to-sell contract to be valid, it must be drawn up in the form of a notarial deed. A real estate promise-to-sell contract made in ordinary written form is legally invalid, and the parties may only claim the return of what they have given pursuant to the provisions on unjust enrichment.
What Is the Retention-of-Ownership Clause (Retention of Ownership)?
The retention-of-ownership clause is a legal institution regulated in Article 764 of the Turkish Civil Code No. 4721 and Article 263 of the Turkish Code of Obligations, which allows the seller to retain ownership of a movable good until the price is fully paid. However, a critical distinction must be made at this point: under Turkish law, the retention-of-ownership clause is valid only for movable goods; it cannot be applied directly to immovables.
Article 764 of the Turkish Civil Code expressly governs sales of movables, whereas ownership of immovables is acquired by registration. For this reason, in installment sales of real estate in Antalya, different legal instruments must be used instead of a retention-of-ownership clause to protect the seller.
The principal legal instruments that may be used to secure the seller in installment sales of real estate are as follows: creation of a mortgage (TMK Art. 881), a real estate promise-to-sell contract (TBK Art. 237), annotation of a right of repurchase on the title deed (TMK Art. 736), and the stipulation of a penalty clause to secure the receivable. In Antalya, the most widespread practice is the creation of a mortgage in favor of the seller in installment sales.
Creation of a Mortgage in Installment Sales: The Seller's Strongest Security
In installment sales of real estate, the seller's most effective means of protection is to have a mortgage created in their own favor over the immovable in exchange for the sale price. Pursuant to Article 881 of the Turkish Civil Code No. 4721, a mortgage is a limited right in rem established over an immovable for the purpose of securing a receivable.
At the Antalya Land Registry Directorate, both the sale transaction and the creation of the mortgage can be carried out simultaneously. In this way, while the immovable is registered in the buyer's name, a mortgage is simultaneously created in favor of the seller in the amount of the remaining installment debt. If the buyer fails to pay the installments, the seller may collect their receivable by way of foreclosure of the mortgage (conversion of the mortgage into cash).
In Antalya, the cost of creating a mortgage in installment sales of real estate consists of a land registry fee at the rate of 4.55 per thousand of the mortgage amount and a revolving-fund charge. This cost is a fairly reasonable expense when compared with the security the seller will obtain.
The Process of Foreclosure of the Mortgage
In the event that the buyer falls into default on the installment payments, the seller may initiate enforcement proceedings by way of foreclosure of the mortgage within the scope of Articles 148–153 of the Enforcement and Bankruptcy Law No. 2004 (İcra ve İflas Kanunu). These proceedings can be carried out in two ways: enforcement based on a judgment (ilamlı icra) (based on a mortgage-secured promissory note) or by way of enforcement without a judgment (ilamsız icra).
| Instrument of Protection | Legal Basis | Level of Protection | Practice in Antalya |
|---|---|---|---|
| Mortgage in Favor of the Seller | TMK Art. 881 | Right in rem, the strongest protection | The most widely preferred method |
| Real Estate Promise to Sell | TBK Art. 237 | Personal right, strengthened by annotation on the title deed | Collection of installments without transfer of title |
| Annotation of Right of Repurchase | TMK Art. 736 | Valid for 10 years with annotation on the title deed | Limited use |
| Penalty Clause | TBK Art. 179 | Personal right, deterrent effect | Widespread in contracts |
| Suretyship | TBK Art. 583 | Third-party security | Preferred in commercial sales |
Installment Sale via a Real Estate Promise to Sell
A real estate promise-to-sell contract is a preliminary contract in which the parties undertake to carry out, in the future, the sale of a specific immovable. Pursuant to Article 237 of the Turkish Code of Obligations, it must be drawn up in the form of a notarial deed. In this method, frequently preferred in installment sales in Antalya, a promise-to-sell contract is drawn up, and the transfer of title is carried out when the entire price is paid.
When the promise-to-sell contract is annotated on the title deed, it becomes assertable against third parties as well. Pursuant to Article 1009 of the TMK, this annotation is valid for a period of five years. In Antalya, the rate of annotating promise-to-sell contracts on the title deed has increased in recent years; this reflects a rise in the level of legal awareness among buyers.
Court of Cassation (Yargıtay), 14th Civil Chamber, Case No. 2022/9012, Decision No. 2023/4567A promise-to-sell contract annotated on the title deed grants the buyer the right to file an action for registration even in the event that the immovable is transferred to third parties. An action filed within the term of the annotation is also pursued against the new owner.
The Legal Process in the Event That the Buyer Fails to Pay the Installments
In the installment sale of real estate, the legal remedies available to the seller in the event that the buyer fails to fulfill their payment obligation vary according to the type of contract and the securities established.
If the title has been transferred and a mortgage has been created in favor of the seller, the seller may collect their receivable by way of foreclosure of the mortgage. If the title has not been transferred and a promise-to-sell contract has been drawn up, the seller may withdraw from the contract by terminating it and returning the amounts received. In Antalya, in both situations, if the dispute is brought to court, prolongation of the process and an increase in costs are inevitable.
In the event of the buyer's default in an installment sale of real estate, the general provisions of the TBK apply. Since Article 260 of the TBK is directed at movable goods, it does not apply directly to immovables. For the seller to be able to withdraw from the contract in a real estate sale, they must grant the buyer a suitable additional period within the scope of Articles 123–126 of the TBK, and performance must not be rendered within this period either.
Points to Consider in Installment Real Estate Sales in Antalya
It is of great importance that parties planning to carry out an installment sale of real estate in Antalya establish their legal securities completely. For sellers, the most secure method is to have a mortgage created in the amount of the remaining debt at the time of the transfer of title. For buyers, the most effective method of protection is to have the promise-to-sell contract annotated on the title deed.
In Antalya, particularly in installment sales made with foreign-national buyers, the exchange-rate risk must also be taken into account. The payment currency, the method of calculating exchange-rate differences, and the law to be applied in the event of a dispute must be clearly determined in the contract.
To obtain professional legal support in real estate sales, you may examine our Representation by a Lawyer in Real Estate Sales in Antalya page.
Frequently Asked Questions About Installment Real Estate Sales
Is the retention-of-ownership clause valid for real estate?
Under Turkish law, the retention-of-ownership clause is valid only for movable goods. For immovables, Article 764 of the TMK cannot be applied, because ownership of an immovable is acquired by registration. To protect the seller in installment sales of real estate, alternative instruments such as the creation of a mortgage, a promise-to-sell contract or the annotation of a right of repurchase must be used.
How does the seller protect themselves in an installment sale of real estate?
For the seller, the strongest means of protection is to have a mortgage created in their own favor in the amount of the remaining debt at the time of the transfer of title. Since a mortgage is a right in rem, if the buyer fails to pay the installments, the seller may collect their receivable by way of foreclosure of the mortgage. Alternatively, a promise-to-sell contract may be drawn up without transferring the title.
If the buyer does not pay the installments, can the seller take back the property?
If the title has been transferred, the seller cannot directly take back the property; however, if a mortgage has been created, they collect their receivable by way of foreclosure of the mortgage. If the title has not been transferred, the seller may withdraw from the contract by granting the buyer a suitable additional period within the scope of the general provisions of the TBK (Arts. 123–126).
What happens if the promise-to-sell contract is not annotated on the title deed?
A promise-to-sell contract that is not annotated on the title deed gives rise only to a personal right valid between the parties. If the seller transfers the immovable to a third person, the buyer cannot demand delivery of the immovable from the new owner; they can only claim compensation from the seller. When it is annotated, it becomes assertable against third parties as well for a period of five years.
What is the cost of creating a mortgage in an installment sale in Antalya?
At the Antalya Land Registry Directorate, for the creation of a mortgage, a land registry fee at the rate of 4.55 per thousand of the mortgage amount and a revolving-fund charge are paid. For example, for a mortgage of TRY 2,000,000, approximately TRY 9,100 in land registry fees and revolving-fund charges arise. This cost is quite reasonable when compared with the security the seller will obtain.
How is exchange-rate risk managed in an installment sale with a foreign buyer?
In installment sales made with foreign buyers, the payment currency must be clearly specified in the contract. For exchange-rate difference risk, methods such as payment at a fixed exchange rate, reference to the Central Bank of the Republic of Türkiye (TCMB) effective selling rate, or gold-indexed payment may be used. The method of calculating exchange-rate differences and the law to be applied in the event of a dispute must also be specified in the contract.
How much does the notary fee amount to in an installment sale of real estate?
When a real estate promise-to-sell contract is drawn up in the form of a notarial deed, a proportional notary fee is charged over the contract price. As of 2024, the proportional notary fee rate is 1.13 per thousand. In addition, a paper charge, a drafting fee and stamp duty are also paid. Although the total notary cost varies according to the contract price, it is generally around a few thousand liras.
