Foreign buyers to get title to property in ONE day
A recent revision to Turkish real estate registration process applicable to foreign nationals purchasing property in Turkey will cut the time it takes to obtain Turkish title deeds (TAPU) to just one day. This long awaited amendment to foreign nationals property acquisition law is expected to further boost Turkish real estate investments from around the globe.
Current law dictates that when a foreign national purchases land and property in Turkey, they should be subjected to military clearance. Effectively, this is whereby the Aegean Army department certifies that the foreign national in question can indeed purchase the property concerned. This is not so much of a check on the credentials of the foreign national but instead a check to ensure that the land upon which the property sits is not located in a military zone. Military zones are restricted to foreign ownership, thus foreign nationals can't register TAPU in a military zone. Effectively, foreign nationals can't purchase land and property in zones declared as military zones in Turkey.
The difficulty arises due to the time it takes to clear a purchase. Certain map and parcel documents need to be collated and married to the details of the foreign national seeking to buy the land and/or property. These details are then sent on to the Aegean military department's foreign nationals' clearance office, which then conducts the necessary parcel and land check and verifications. This process, from submission of clearance application to receiving the clearance, generally takes around 6-8 weeks, during which time the buyer can't register title to property. Implications of this 'delay' in registering title are many. To name just a few -
- it makes mortgages more difficult to obtain
- raises security issues from the time a reservation deposit is lodged on a property to the time the property legally converts to the buyer
- and also at times causes issues with exchange rate fluctuations.
The new law aims to address these issues and simplify the purchase clearance process. Instead of each foreign buyer making a separate military application for each and every land and/or property they purchase in Turkey irrespective of where they are located, the revision looks at the essence of 'parcel clearance' and suggests that if a parcel has previously been cleared for a foreign buyer, then it stands to be clear for all future foreign buyers. Simply put, it moves the clearance from the foreign buyer to the very parcel (land plot) that the property is located on.
To give an example - say Mr. X purchases an apartment or a villa in a complex that is located on a parcel of land and obtains his military clearance, then that parcel (and all properties built on it) will be deemed as cleared for all foreign buyers to come. If there are say 100 units in the complex, then only one military clearance will be sufficient. Once the land is cleared as 'non military zone' then foreign buyers will be able to register title deed to their new homes in just one day exactly the same as Turkish nationals do.
What are the implications of the new amendment to foreign nationals military clearance process?
Simply put it will make it much easier to buy property in Turkey. It will remove unnecessary protocols (and associated costs) that some buyers are advised to follow in order to safeguard sizeable holding deposits prior to obtaining legal title. It will make it easier for banks and other lenders to survey properties being acquired and provide finance on the spot.
Overall, this will increase the appeal of Turkish real estate globally and make the market far more transparent. It will open up new opportunities for foreign investors to participate in property auctions, bank repossessions and similar distressed sales that currently almost fully block them out due to their inability to obtain legal ownership straight away.
When is the effective date for the new method of military clearance?
Effective as of 14 October 2013, no military clearance will be required for land and properties, whose parcels have previously been cleared (as explained above) after 5 May 2011.