Lawsuit for Cancellation and Registration of Title Deed Based on Trust Agreement in Turkish Law

LAWSUIT FOR CANCELLATION AND REGISTRATION OF TITLE DEED DUE TO TRUST AGREEMENT AND TRUST TRANSACTION

Before addressing the lawsuit for cancellation and registration of title deed based on a trust agreement, we would like to touch upon what a trust transaction is, the parties involved, its scope, proof, and the validity conditions of the trust transaction and the trust agreement.

WHAT IS A TRUST TRANSACTION?

Trust transactions are operations where the trustor transfers a property or right within their assets to the trustee for management or as collateral, and the trustee is obliged to use the trust subject matter in accordance with the terms of the trust agreement and return it to the trustor when the purpose is achieved. In a trust transaction, the trustor transfers ownership or a claim right to the trustee with a constructive transaction and binds them with certain obligations through a binding contract. Although trust agreements are not regulated by law, they are frequently used in practice, such as in the transfer of ownership and claims, and their place in our legal system has developed through doctrine and judicial precedents. The obligations of the parties in a trust agreement can be summarized as follows: the trustor transfers a right to the trustee for a specific purpose or period, and the trustee must use this right in line with the purpose set by the trustor, adhere to their commands and instructions, and return the right to the trustor once the purpose is achieved or the period ends. In this context, it can be said that the debtor aims to provide more comprehensive protection by transferring ownership rather than granting a limited real right, such as a pledge, to the creditor on the subject matter of the transaction.

WHO ARE THE PARTIES TO A TRUST TRANSACTION?

The parties to a trust transaction are the trustor and the trustee. The person who transfers a right or asset to a trusted individual under trust is called the “trustor.” The person who uses the transferred right or asset as their own, directly or indirectly, is referred to as the “trustee.” The right or asset transferred by the trustor to the trustee is termed the “trust subject matter.” In a trust transaction, the parties to the constructive transaction and the binding agreement are the same.

WHAT IS THE SCOPE OF A TRUST AGREEMENT?

In a trust transaction, the trustee is obliged to comply with the agreed conditions while using the right and to transfer the right or asset back to the trustor (or a third party designated by the trustor) when the purpose is achieved or the period ends. A trust transaction is a contract that grants the trustor the right to request the return of the transfer once specific conditions are met. If this obligation is not fulfilled, it can be enforced through litigation.

HOW IS A TRUST AGREEMENT PROVEN?

According to the Court of Cassation’s Unification of Judgments Decision dated 05.02.1947 and numbered 20/6, a trust agreement can only be proven by written evidence. This written evidence must be a document signed by the parties. Even if there is no written evidence of the stated nature, if there is a document in the possession of the opposing party (such as a handwritten but unsigned note or letter by the trustee, a document typed or written by computer with the trustee’s initials, or an unsigned note with a fingerprint or seal not properly notarized) that indicates the occurrence of the dispute, it can be considered as “initial evidence” under Article 202 of the Code of Civil Procedure No. 6100, and the trust agreement can be proven by any means, including witnesses.

VALIDITY OF TRUST AGREEMENTS

Trust agreements are valid contracts that impose mutual obligations and rights on the parties, as they are based on the mutual consent of the parties. In these agreements, the parties can determine the reasons for the termination of the trust transaction, the conditions and period for the return of the transferred right by the trustee, and the sanctions for breach of contract. As long as they do not contravene mandatory legal provisions, morality, public order, personal rights, or are not impossible to perform, they are considered valid.

LAWSUIT FOR CANCELLATION AND REGISTRATION OF TITLE DEED DUE TO TRUST AGREEMENT

If the trustee does not return the trust subject matter property after the trustor fulfills their obligation, the trustor has the right to reclaim the trust subject matter through litigation. The lawsuit for cancellation and registration of title deed based on a trust agreement is a performance lawsuit filed by the trustor against the trustee, requesting the transfer of the ownership of the property in question to their name.

PARTIES TO THE LAWSUIT

The right to reclaim the trust subject matter is a personal right based on the trust agreement, which can generally be asserted against the other party to the contract, i.e., the trustee. However, if the trustee transfers the trust subject matter property to another third party who cannot be considered bona fide, the lawsuit can also be filed against this third party.

In general, in lawsuits for cancellation and registration of title deed based on a trust agreement, the plaintiff is the trustor or their heirs. The lawsuit for cancellation and registration of title deed based on a trust agreement will be directed against the trustee who has gained the title of owner in the land registry by transferring the ownership of the property, or their heirs in case of their death, who will be the defendants in the lawsuit.

WHAT IS THE TIME LIMIT FOR A LAWSUIT FOR CANCELLATION AND REGISTRATION OF TITLE DEED BASED ON A TRUST AGREEMENT?

As previously mentioned, lawsuits for cancellation and registration of title deed based on a trust agreement are not regulated in our legislation. Therefore, the statute of limitations for these lawsuits will be determined according to general provisions. Based on Article 146 of the Turkish Code of Obligations No. 6098, which states that unless otherwise provided by law, every claim is subject to a ten-year statute of limitations, a ten-year statute of limitations will apply to these lawsuits. Trust agreements are binding contracts that create an obligation to transfer ownership on the one hand and include transactions of transfer on the other. Therefore, for the statute of limitations to start, the trust relationship must end, and the claim must become due. As long as the trust subject matter property remains with the trustee and the money received remains with the trustor, the statute of limitations will not start. However, if the parties have agreed on a period and the debt has not been paid within this period, it is evident that the trust relationship will continue. The start of the period begins from the date the trustor loses hope and belief that the trustee will return the title deed, and the right to file a lawsuit arises when it becomes clear that the trustee will not comply.

COMPETENT AND AUTHORIZED COURT FOR LAWSUITS FOR CANCELLATION AND REGISTRATION OF TITLE DEED BASED ON A TRUST AGREEMENT

Lawsuits for cancellation and registration of title deed based on trust agreements are property-related lawsuits, and as there is no contrary provision for lawsuits related to property rights, the competent court is the civil court of first instance, regardless of the value and amount of the subject matter of the lawsuit.

In lawsuits related to real rights on immovable property or causing a change in real rights ownership or related to the possession or retention of the immovable property, the court of the location of the immovable property has absolute jurisdiction. Therefore, in a lawsuit for cancellation and registration of title deed based on a trust agreement, the court of the location of the immovable property has absolute jurisdiction.

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