Obligation to Contribute to Common Expenses in Condominium Ownership, Dues and Unpaid Dues

The Concept of Dues: Obligation to Contribute to Common Expenses in Condominium Ownership (Condominium Law Article 20)

The most fundamental financial obligation of living in a condominium is the "debt to contribute to common expenses." This payment, commonly known as "dues," finds its legal basis in Article 20 of the Condominium Law. This article is not only a payment obligation but also a financial demonstration of the property owners' commitment to the building as a whole. It is considered an "obligation" for an independent unit owner to contribute to the expenses arising from the maintenance, cleaning, security, and operation of the building's common areas.

Scope of Common Expenses

The maintenance fee is not limited to the janitor's salary or elevator electricity. According to Article 20 of the Condominium Law, it includes expenses for the janitor, heating technician, gardener, and security guard, along with their salaries, severance pay, and social benefits; building insurance premiums; maintenance, repair, reinforcement, and operating expenses for common areas; the manager's salary for common areas; and other expenses. Apartment owners are obligated to contribute to these expenses in proportion to their share of the land (unless otherwise stipulated in the management plan).

Prohibition against avoiding membership fee payment obligation

The common defense of "I don't use this service, so I won't pay the fee" is completely invalid under the law. For example, a homeowner living on the ground floor has no right to say, "I don't use the elevator, so I won't pay the elevator fee." This is because the elevator is a common area, and protecting the building's value is in the common interest of the homeowners. Even if a homeowner does not use their independent unit or keeps it empty, this does not exempt them from paying their share of the common expenses.

A Critical Detail for Investors and Foreign Owners

For foreign nationals who purchase real estate in Türkiye for investment purposes, unpaid maintenance fees represent a significant risk that is often overlooked but could later lead to foreclosure on the property. Even if a foreign owner does not reside in Türkiye or rent out their property, they are still responsible for any outstanding maintenance fees. The management has the authority to initiate enforcement proceedings against owners who fail to pay their fees. This could result in unexpected foreclosure on the foreign investor's property in Türkiye, potentially hindering sales processes.

The Importance of the Business Project

The amount of the maintenance fees is determined by the "operating budget" prepared by the building manager. This budget must be communicated to the homeowners. Once communicated and not objected to (or objected to and rejected), the operating budget becomes final and forms the legal basis for the maintenance fee debt. Based on this budget, the manager can initiate enforcement proceedings against homeowners who fail to pay.

Maintenance fees are the lifeblood of a building. When this lifeline is blocked, the building's safety and comfort are compromised. Managing legal processes with professional management and a transparent operational project protects the rights of property owners and ensures the long-term sustainability of the building's value (and the security of investment for foreign investors).

 Unpaid Dues: Late Payment Penalties and Enforcement Proceedings

In condominium buildings, the regular payment of dues is vital for the building's operational continuity. However, the failure of one or more condominium owners to pay creates a domino effect that disrupts the building's overall budget. The Condominium Law provides the building manager with a highly effective and swift enforcement mechanism in such cases. In this section, we will examine the sanctions applied against owners who fail to pay their debts and the legal workings of the enforcement process.

Late Payment Penalties: The Cost of Debt

According to Article 20 of the Condominium Law, a homeowner who fails to pay their dues on time a late payment penalty of 5% per month . This rate is considerably higher than other types of interest in Turkish law (legal interest or default interest). This 5% penalty, far more deterrent than legal interest rates, is the strongest tool for management in debt collection. The homeowner's defense that "interest cannot be charged" is not legally accepted; as it constitutes a penalty clause.

Enforcement Proceedings Process: A Fast and Effective Method

The building manager can initiate direct enforcement proceedings against a homeowner who fails to pay their dues, in accordance with the provisions of the Enforcement and Bankruptcy Law (EBL).

• Execution Proceedings Without a Court Judgment: Based on a finalized management plan or a decision of the homeowners' association, the manager initiates execution proceedings without a court judgment against the homeowner through the enforcement office.
• Payment Order: The payment order sent to the debtor property requests that they pay the debt or object within 7 days.
• Cancellation of Objection: If the debtor property owner unjustly objects to the enforcement proceedings, the administrator can continue the proceedings by filing a "cancellation of objection" lawsuit. If the debtor fails to present concrete evidence that the debt does not exist, they will also be ordered to pay a 20% "enforcement denial compensation".

Limits of Administrative Authority

The building manager is not required to obtain a separate "authorization document" from the homeowners' association to file a lawsuit or initiate enforcement proceedings against a debtor who owes dues. They can carry out these actions directly under the authority granted to them by law. However, it is mandatory that the money obtained as a result of enforcement proceedings be recorded in the building's operating account and transparently documented in the ledgers.

The Path to Selling the Property

Enforcement proceedings don't just involve wage garnishment or blocking bank accounts. If outstanding dues, late payment penalties, and court costs have accumulated and the owner fails to pay, the management the seizure of the property and its forced sale through enforcement proceedings. This is the most severe sanction allowed by the Condominium Law. The sale of the property through enforcement proceedings will be for an amount sufficient to cover the debt.

Warning for Investors: Buying a Property with Outstanding Maintenance Fees

Foreign investors purchasing real estate in Türkiye must obtain written confirmation from the management regarding any outstanding past dues for the property they intend to buy. According to the Condominium Law, both the new and previous owners may be jointly and severally liable for any accumulated dues from the time they took over the property. Therefore, obtaining a "certificate of no outstanding debt" before the transfer of title prevents the investor from facing unforeseen legal burdens.

Unpaid dues directly affect the quality of life in a building. The management's prompt and decisive handling of these processes within the legal framework protects the rights of homeowners who pay honestly and ensures the institutional discipline of the complex.

Difficulties in Serving Notices and Collecting Debts from Foreign Property Owners

In condominium buildings, collecting outstanding dues becomes a more complex and sensitive legal process when the indebted owner is a foreign national. While notification procedures are quite simple and fast for Turkish owners residing in Türkiye, "international notification" procedures come into play for foreign owners residing abroad or whose addresses cannot be precisely determined in Türkiye. This is the biggest obstacle faced by management in collecting dues.

Notification Law and Foreign Owners

For an enforcement proceeding or lawsuit to be legally valid, notification to the debtor is mandatory. According to the Notification Law, notification to individuals located abroad can be done through diplomatic channels or directly by post. However:

• Process Length: Serving notices abroad can take months, depending on the country. This delays the finalization of enforcement proceedings.
• Translation Requirement: Notification documents may need to be translated into the official language of the foreign owner's country or into English, the common diplomatic language. These costs are generally covered by the administration budget.

Mernis and Residence Address Problem

Foreign property owners typically declare an address in Türkiye when acquiring their property. However, this address often becomes invalid for a foreigner who purchases the property for investment purposes and then returns to their home country. The failure of a foreign owner to provide a reachable "official notification address" (or an address for a representative in Türkiye) when renting out or keeping their property vacant presents a significant handicap for the management. If the management is unaware of the owner's address, they may be forced to resort to "public notification," which makes the legal process quite costly.

Solution for Foreign Property Owners: "Legal Representative"

To avoid these difficulties, the most reliable approach for foreign investors when purchasing properties is to appoint an agent or a real estate management office/law firm to represent them in Türkiye. Having a registered address or the name of the legal representative on the title deed allows the management to send notifications directly to that address. This ensures that in the event of unpaid dues, notifications are delivered immediately and the enforcement process is carried out without delay.

The "Information Lack" Problem Faced by Administrations

When authorities initiate debt collection proceedings against foreign property owners, they may have difficulty obtaining the debtor's passport information or current contact details. At this stage, lawyers can expedite the legal process by conducting address checks using information from the Land Registry Office and records from the Immigration Administration.

Communication Strategy in the Collection Process

In disputes over dues with foreign property owners, the first step should always be to attempt direct communication. Before resorting to legal action, an informative email sent in English or the property owner's native language can facilitate payment of the dues. Many foreign property owners delay payments because they are unaware of the legal consequences of unpaid dues or the 5% late payment penalty in Türkiye. A professional management team can avoid court and enforcement costs by prioritizing transparency and information at this stage.

The risk of foreclosure on properties owned by foreigners directly threatens the value of real estate investments in Türkiye. Therefore, it is essential for foreign investors to work with a "Turkish legal partner" (lawyer or financial advisor) regarding fee collection to ensure the security of their property.

 Mediation and Litigation Processes in Membership Fee Disputes

Tensions between homeowners and building managers over unpaid dues often escalate to court cases. However, recent reforms in the Turkish legal system have given "mediation" a central role in many legal disputes, including those related to dues. This section examines the resolution of dues disputes through litigation and the advantages offered by the mediation process.

Mandatory Pre-Litigation Mediation

Under Law No. 6325 on Mediation in Legal Disputes, disputes arising from membership fee receivables may not be directly subject to mediation as a prerequisite to litigation unless they are deemed to be of a "commercial nature"; however, disputes arising from the Condominium Law fall within the jurisdiction of the "Civil Court of Peace". In the case of collection of membership fee debts, if the debtor objects after enforcement proceedings, a "Cancellation of Objection" lawsuit must be filed, making it mandatory to resolve the dispute before the court.

Action for Annulment of Objection (Article 20/2 of the Condominium Law)

If a homeowner who owes money objects to the enforcement proceedings initiated by the management within 7 days by stating "I do not owe any debt" or "the amount of the dues is excessive," the enforcement proceedings are suspended. To reactivate this suspended process, the manager must file a "Lawsuit for Annulment of the Objection" in the Civil Court of Peace. The primary purpose of this lawsuit is to prove before the court that the dues debt actually exists and that the amount is in accordance with the management plan/operational budget.

Matters Examined by the Court

During the legal proceedings, the court requests the following from the manager:

• Management Project: A document showing how the amount of the membership fee is determined.
• Notification Records: Evidence that the management project was duly notified to the property owner.
• Minutes Book: The minutes of the homeowners' association meeting and election documents.
• Accounting Records: Whether membership fee payments are recorded transparently in the ledgers.

If the court determines that the fee was properly determined and that the owner has failed to fulfill their payment obligation, it will dismiss the objection and order the continuation of the enforcement proceedings.

Advantages of Mediation

While litigation can take months or even years, mediation can resolve disputes within days. Particularly in disputes over maintenance fees with foreign property owners, mediation allows the parties to come together and create a payment plan.

• Payment Convenience: In mediation, "settlement" methods such as installment payments for membership fees or partial reductions in late payment penalties may be preferred.
• Cost Savings: Court costs, expert witness fees, and attorney fees make litigation expensive. Mediation relieves parties of these costs.
• Suspension of Enforcement: The agreement signed as a result of mediation has the nature of a "judgment"; that is, it has the same force as a court decision. If the agreement is not complied with, collection can be carried out directly by the enforcement office.

Tips for Foreign Investors

As a foreign investor, when faced with a fee dispute, you should view mediation as an opportunity to “sit down at the table” rather than directly becoming a defendant. A mediation request submitted to the management through your law firm in Türkiye demonstrates your good faith and minimizes legal costs.

Property fee disputes are subject to "simplified procedural rules" in courts. While this allows the process to proceed relatively quickly, obtaining professional legal support at every stage can help you avoid the risky process, including the forced sale of your property, from the outset.

Condominium Ownership within the Framework of the Enforcement and Bankruptcy Law

The Condominium Law grants the building manager very strong authority against owners who fail to pay their dues. If the unpaid dues, along with late payment penalties and legal costs, accumulate and remain unpaid despite all warnings and enforcement attempts, the legal system prescribes a compulsory enforcement process that can extend to the sale of the property. This is the harshest sanction aimed at protecting the "common interest" of the building in a conflict between the "property rights" of the condominium owner and the "common interest" of the building.

Forced Execution Process: From Seizure to Sale

Once the enforcement proceedings initiated by the building manager are finalized, the assets of the debtor property owner are seized. Initially, the debtor's salary, bank accounts, or other movable property are garnished. However, if this is insufficient, or if the debtor property owner does not have an active presence in Turkey, the management a lien on the debtor's independent unit (house/office).

Once the seizure order is registered in the land registry, the debtor's right to dispose of the property is restricted. If the debt remains unpaid, the process moves to the "sale of the property" stage through the enforcement office

1. Valuation: The true market value of the property is determined by expert appraisers.
2. Auction Notice: The property will be announced for sale by public auction on a date and time determined by the enforcement office.
3. Auction: The property is sold by open auction at a price that starts at a specific percentage of its estimated value (usually with bids beginning at 50% of the estimated value).

Revenue from the Sale of Real Estate

The proceeds from the sale are first used to cover enforcement costs, outstanding building maintenance fees, and any other preferential creditors. Any remaining balance is returned to the indebted owner. This process is the final and most painful for the homeowner, as they risk losing their property simply due to unpaid maintenance fees.

Foreign Owners and Sales Risk

Foreign property owners who have purchased property in Türkiye and then moved abroad or neglected their property are particularly at risk during this process. Delays in delivering notifications can delay the debtor's awareness of the enforcement proceedings. If a foreign property owner only becomes aware of the enforcement proceedings upon seeing the "sale notice for their property," the situation may have reached a point of no return.

To manage this risk:

• Regular Debt Inquiry: Foreign owners are required to periodically confirm their debt status with the management.
• Legal Representative: Having a representative in Turkey ensures that the owner is informed of such notification and enforcement proceedings.
• Rights to Appeal: If there is an irregularity in the sales process (for example, incorrect notification), lawsuits can be filed for "bid rigging" or "annulment of the auction due to irregular notification." However, these lawsuits are subject to very strict time limits.

Final Grade

While unpaid dues may seem like a simple debt, they are a serious matter that can lead to the loss of property, thanks to the special protections provided by the Condominium Law. To ensure the security of your real estate investment in Türkiye, complying with the building's management plan, paying dues on time, and managing the process transparently with professional legal support are the only ways. The management's enforcement authority exists to protect the peace and financial stability of the building; resolving disputes through mediation or direct settlement before reaching the final stage (sale) is always the most rational and protective approach.