Property Transfer and Collusion Cases: Rights, Disputes, and Solutions

Entrance

The transfer of ownership refers to the transfer of ownership rights of immovable or movable property from one person to another. This process usually occurs through sale, donation, exchange, or inheritance. However, collusion (fraudulent transaction) can sometimes occur in ownership transfer transactions between parties. Collusion is defined as agreements made by parties that do not reflect their true intentions and are intended to deceive third parties. Claims of collusion during the transfer of ownership can lead to legal disputes between the parties and third parties. This article will discuss the legal framework of ownership transfer and collusion cases, types of collusion, court decisions, and methods of resolving these cases.

1. Transfer of Ownership and Legal Basis

The transfer of ownership is subject to different procedures and rules for immovable and movable property. The Turkish Civil Code (TMK) and the Turkish Code of Obligations (TBK) regulate the procedures and principles of ownership transfer

• Transfer of Real Estate Ownership: The ownership of real estate is transferred through official registration in the land registry. According to Article 706 of the Turkish Civil Code, real estate sales contracts must be drawn up before a notary public and registered in the land registry.
• Transfer of Movable Property: The ownership of movable property is transferred through delivery. According to Article 763 of the Turkish Code of Obligations, the ownership of movable property passes to the new owner at the time of delivery.
• Definition and Legal Basis of Collusion: Collusion is when parties perform a legal transaction that appears to have different purposes but actually serves another purpose. Article 19 of the Turkish Code of Obligations regulates collusion and stipulates that the transaction shall be deemed invalid in cases of collusion.

2. Types of Collusion and Legal Consequences

Collusion is divided into various types, and each type has different legal consequences:

• Absolute Simulation: These are agreements made solely to deceive third parties, where the parties intend no legal consequences. For example, a person transferring their assets to another to avoid seizure could be an example of absolute simulation.
• Relative Simulation: This is a situation where the parties intend to perform a different legal transaction in reality, while appearing to carry out one transaction. For example, if it has been decided that the real estate will be donated instead of sold, but this is presented as a sale, this is a case of relative simulation.
• Conditional Simulation: This is a type of simulation where the parties plan for the legal transaction to become valid only when a specific condition is met. However, if the condition is not met, the transaction is considered invalid.

Collusive transactions are unlawful and deemed invalid because they do not reflect the true intentions of the parties. If collusion is detected, the apparent transaction is canceled, and the true relationship between the parties is taken into consideration.

3. Collusion Cases and Burden of Proof

In lawsuits filed on the grounds of collusion, the party making the claim must prove the collusion. However, due to the difficulty of presenting evidence in these cases, the Supreme Court accepts recourse to witness testimony. In collusion cases, the following points are particularly considered:

• Invalidity of the Apparent Transaction: An apparent transaction alleged to be fraudulent is deemed invalid, and the true intention is revealed. For example, if it is determined that a property has been transferred fraudulently, the land registry record is canceled and corrected to reflect the true situation.
• Determining the True Legal Relationship: In a collusion lawsuit, after the apparent transaction is annulled, the true legal relationship between the parties is determined. For example, in a real estate sale presented as a donation, if it is determined that the parties did not actually intend to make a donation but sold the property for consideration, this fact is taken into account.
• Rights of Third Parties: In collusion cases, the vested rights of third parties may be protected if they act in good faith. For example, if a property is transferred to another person through a collusive transaction, and a third party purchases that property in good faith, that third party's ownership rights may be protected.

4. Supreme Court Decisions and Precedents

The Supreme Court has issued various rulings regarding collusion cases. These rulings serve as an important guide in identifying collusive transactions and determining their legal consequences

• Invalidity of Collusive Transactions: The Supreme Court has ruled that collusive transactions have no legal effect and are considered invalid. For example, if sales made with the aim of defrauding heirs are found to be collusive, these transactions are annulled.
• Protection of Bona fide Third Parties: The Supreme Court has emphasized that the vested rights of bona fide third parties must be protected in collusive transactions. It has been stated that the rights of individuals who acquire property in good faith should not be violated.
• Freedom of Evidence and Witness Testimony: The Supreme Court has accepted that witness testimony can be used to determine collusion. This is particularly important in uncovering collusive relationships between parties.

5. Solutions in Collusion Cases

In resolving collusion cases, both judicial processes and alternative dispute resolution methods can be used:

• Court Process: Collusion cases are heard in civil courts. The parties may request the annulment of the transaction they claim is collusive. The court examines the collusion claim by evaluating the evidence and makes a decision.
• Mediation: Mediation can be used to resolve disputes between parties without going to court. However, mediation may have limited effectiveness in cases involving fraudulent transactions such as collusion.
• Expert Opinion for Detecting Collusion: Especially in real estate valuations, expert opinions can be sought to determine collusion. Experts can assess whether the transaction reflects market value and submit a report to the court.

Conclusion

Allegations of collusion during the transfer of ownership can lead to serious legal disputes between the parties. Collusive transactions are considered unlawful and invalid because they do not reflect the true intentions of the parties. Supreme Court rulings provide guidance in resolving collusion cases and allow the use of witness testimony in identifying collusive transactions. For the protection of the parties' rights and the fair resolution of disputes, it is crucial that ownership transfer transactions are conducted openly, transparently, and in accordance with legal regulations. Preventing collusion contributes to the protection of the rights of both the parties and third parties, and serves to establish legal certainty.