Real Estate Preliminary Contract for Sale

Real estate (immovable) preliminary contract of sale; It is one of the contracts aiming at the transfer of an immovable at a future time with the conditions agreed in the contract and burdening both parties. In other words, it is a commitment to make an immovable sale contract, which must be formally made before the land registry officer in the future.

Validity Conditions of the Immovable Preliminary Sale Contract

• The validity of all contracts aiming at the transfer of ownership of immovable depends on their official execution (MK art. 706). Real estate sales contracts that are not formally concluded are invalid and are not binding between the parties.
• The real estate that may be the subject of the immovable promise contracts must be an immovable registered in the title deed. There must be a title granting registration as stipulated by 1008. It is not possible to make a preliminary sales contract for immovables without title deed, the contract made is not considered valid.
• The immovable promise to sell contract is also a preliminary contract that undertakes to transfer the immovable property to the deed in the future. Promising sales contracts for immovables are also valid if they are issued in the form of official promissory notes and signed by both parties in the presence of a notary public (BK art. 29, Notary public law art. 60/3, art.89). The form requirement of the contract is related to public order and must be made by a notary public. The real estate promise contract becomes invalid if it is made by the notary in the form of approval, not in the form of regulation.
• In real estate sales promise contracts, the price to be paid by the party promising to buy must be clearly stated in the contract. However, it is obligatory to have a clear provision regarding the payment method (in installments or cash) of the price to be paid.

What are the Obligations of the Parties in the Promising Real Estate Sale Contract?

The real estate is obliged to transfer the immovable subject to the contract to the promised sale on the date specified as the transfer date in the promised sale contract. It is not necessary for the party promising the sale to be the owner of the immovable at the establishment stage of the contract. It should only be owned at the transfer stage. In this case, if the promised sale does not own the immovable during the transfer, if he cannot fulfill his contractual debt, he is sentenced to compensation in accordance with the impossibility of performance and breach of debt provisions of the Code of Obligations. The point to be noted is that the damage to be compensated here is positive damage. In other words, it is the damage caused by not performing the contract at all or properly.

In practice, it is sometimes seen that more than one real estate sales promise agreement is made. In case of existence of more than one promise-to-sale contract, the earliest contract as of the date of the contracts is considered valid. This is also called the primacy (ancientity) principle.

The party promising to purchase the immovable is obliged to pay the price specified in the contract and in the form specified as the payment method. Since he has made the main contract and committed to take over the real estate, he must notify the promised sale that he is ready to conclude the main contract and take over the real estate on the specified date.

Termination of Promising Real Estate Contract

The real estate sales promise contract can be mutually terminated in any way with the will of the parties. As with other contracts, the real estate promise contract ends in the following cases:

• performance of the contract,
• The statute of limitations for the performance of the performance specified in the contract,
• Termination of the contract

Annotation of the Immovable Preliminary Sale Contract to the Land Registry

Claiming the right of receivable arising from the real estate sales promise contracts against third parties is only possible if the contract is annotated to the title deed (MK art. 1009). The right arising from the contract with its annotation in the title deed creates the same effect (reinforced personal effect). What is at issue here is not a right in rem, but a real effect due to the annotation of the contract. In other words, even if the real estate is sold to a third party, when the promise of sale contract is annotated to the title deed, the creditor of the promise of sale contract may also demand the right to claim from the third party who has taken over the real estate.

According to the Notary Law, real estate sales promise agreements and construction agreements in return for land share, drawn up by notaries, are annotated to the real estate registry if one of the parties requests it. One of the parties may apply to the title deed with a petition and annotate the real estate sales promise contract to the title deed (Deeds Law art. 26 and MK art. 1009).

The effect of the commentary is five years. In other words, if the real estate is not transferred to the title deed within 5 years from the annotation of the preliminary contract of sale, the effect of the annotation disappears. The annotation that transforms the relative effect of the right arising from the contract into the same effect must be made within five years from the moment the annotation is recorded in the title deed, otherwise the annotation will be lost. The fall of the annotation only transforms the same effect into a relative effect. The validity of the contract and the rights subject to the contract do not disappear.

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