THE LEGAL MEANING OF THE RIGHT OF PREEMPTION (RIGHT OF PREEMPTION)

Regarding the "right of pre-emption";

One of the fundamental building blocks of Turkish property law is the principle that individuals should exercise their property rights not within a rigid, isolated framework, but by considering the balance of social relations and neighborhood law. In co-ownership (joint ownership) regimes, the fact that more than one person owns a share in the same property sometimes creates grounds for legal and practical conflicts among the co-owners. If one co-owner wishes to transfer their share to a completely unrelated third party, the most important legal instrument available to the other co-owners to prevent the alienation of the property and to protect the internal balance of co-ownership is the right of pre-, classically known as the right of shuf'a.

The right of pre-emption, formulated within the framework of the relevant provisions of the Turkish Civil Code (TMK), is a constitutive right that grants co-owners of jointly owned property the priority to purchase a share if it is sold to a third party. This right imposes a legal limitation on the principle of free transfer of ownership (the right of disposal); however, this limitation is considered legitimate in order to strengthen the community bond among co-owners, prevent the inclusion of outsiders in the partnership, and protect economic integrity. In this study, the right of pre-emption will be examined comprehensively, with academic depth but in a simple manner accessible to everyone, without the use of any tables, in the context of statutory pre-emption rights, contractual pre-emption rights, methods of exercising the right, lapse periods, litigation processes, and its relationship with other property law institutions.

1. LEGAL NATURE AND TYPES OF PREEMPTION RIGHTS

The right of pre-emption is a constitutive and innovative right that empowers the holder, through a unilateral declaration of intent, to register a share in their own name under the same terms as a sales contract made with a third party. In the Turkish legal system, this right has two main sources and types: statutory pre-emption and contractual pre-emption.

A. Legal Right of Pre-emption

The legal right of pre-emption, regulated in Article 732 of the Turkish Civil Code, is a right arising directly from the law that grants other co-owners the priority to purchase a share of jointly owned real estate if one co-owner sells their share to a third party.

• Purpose: To prevent co-owners in shared ownership relationships from becoming co-owners with an unwanted outsider, to protect the integrity of the property within the parcel, and to prevent potential disputes.

• Only to Joint Ownership: The statutory right of pre-emption applies only to joint ownership (co-ownership). In co-ownership (for example, in inheritance partnerships), the right of pre-emption does not apply because the co-owners do not have specific shares. Similarly, this right does not exist in properties owned by a single person.

B. Contractual Right of Pre-emption

The contractual right of pre-emption, regulated in Article 735 of the Turkish Civil Code, is a right established by registering a note in the land registry and based on a contract between the parties.

• Establishment and Registration: Shareholders or owners may agree on a right of pre-emption through a written contract. For this right to be enforceable against third parties and to be legally binding in the land registry, it must be registered in the land register.

• Time Limit: According to the law, a contractual right of pre-emption can be agreed upon for a maximum of ten years . Agreements made for periods longer than this are legally reduced to ten years.

• Scope of Application: The contractual right of pre-emption can be established by the will of the parties not only in jointly owned properties but also, if necessary, for properties owned by a single person. However, its most common application is still in real estate investment and partnership relationships.

2. CONDITIONS AND SCOPE OF THE LEGAL RIGHT OF PREEMPTION

For a legal right of pre-emption to arise and be asserted by a co-owner through legal action, all the strict material conditions required by law must be fully met.

A. The Existence of a Joint Ownership Relationship

It is a prerequisite that the property in question is registered in the land registry as co-ownership. In independent units that have been converted to condominium ownership or easement rights, the legal right of pre-emption over the share of the independent unit is generally not required; however, exceptional considerations may be made in construction contracts in exchange for land shares or in cases where the independent units are jointly owned. The essential point is that the co-ownership is clearly visible in the land registry.

B. Sale of the Share to a Third Party

The fundamental legal transaction that triggers the right of pre-emption a sales contract. The sale of a share to a third party directly gives rise to the statutory right of pre-emption.

• Transactions Other Than Sales: The right of pre-emption is an exceptional restriction and cannot be extended by analogy. Therefore, the statutory right of pre-emption does not arise in cases where the share is donated, exchanged, contributed to the company as capital, is the subject of a lifetime care contract , or transferred through inheritance .

• Sale by Forced Auction (Tuition): In sales by public auction (forced execution) conducted through enforcement offices or court sales officers, the exercise of the legal right of pre-emption by the co-owners is prohibited. The main reason for this is that forced auctions are already conducted through an open bidding process open to everyone's participation, and it is undesirable for the right of pre-emption to obstruct these processes.

C. Sale to a Non-Stakeholder (Third Party)

If a share is sold to one of the existing shareholders, the other shareholders do not acquire a right of pre-emption. Since the right of pre-emption exists to prevent a third party from entering the partnership, this right becomes ineffective if the share is transferred to another shareholder.

3. PROCEDURES AND TIME LIMITS FOR EXERCISING THE RIGHT OF PREEMPTION

The most critical elements in exercising the right of pre-emption are notification obligations and the strict limitation periods stipulated by law. Failure to meet these deadlines results in the complete lapse of the right, making it impossible to assert it again.

A. Notification (Reporting) Obligation

A shareholder who sells their share to a third party, or the third party who acquires the share, must notify the other shareholders of this sale through a notary public. This notification via notary is vital for initiating the period during which the right of pre-emption can be exercised.

B. Statute of Limitations

According to Article 733 of the Turkish Civil Code, two separate time limits are stipulated for the exercise of the statutory right of pre-emption:

• Three-Month Period: The right of pre-emption must be exercised through legal action within three months from the date the sale is officially notified to the rightful owner (other co-owners) via a notary public . This three-month period is a forfeiture period.

• One-Year Period: If the sale transaction has not been notified to the other stakeholders through a notary, one year . This two-year period also begins to run from the date of sale. Even if no notary notification has been made, a pre-emption lawsuit cannot be filed after the two-year period has expired.

C. Obligation to File a Lawsuit

The right of pre-emption cannot be exercised solely through a letter sent to the seller or buyer, or through an oral statement . For the right to be legally valid, a pre-emption lawsuit must be filed in the competent court within the legal time limits. The right exercised without filing a lawsuit has no legal effect.

4. PRICE AND JUDICIAL PROCEDURE IN EXERCISING THE RIGHT OF PREEMPTION

What price will the co-owner who exercises the right of pre-emption pay when acquiring ownership? The legislator has adopted a fair and balanced rule in this regard.

A. Discrepancy Between the Price Stated in the Title Deed and the Actual Price

The co-owner exercising the right of pre-emption the actual price . In practice, parties may declare a price much lower than the actual value in the official sales contract registered with the land registry in order to avoid land registry fees and taxes (collusion or undervaluation).

• If the plaintiff co-owner claims that the price stated in the title deed is not accurate and that a higher price was actually paid, they must prove this claim.

• Similarly, the defendant buyer may argue that the price stated in the title deed is too low and that they actually paid more, requesting that the court determine the true price. The court, through expert appraisers, investigates the market value and true value of the property at the time of sale and determines the amount that should be paid.

B. Payment of Expenses

The plaintiff exercising the right of pre-emption must deposit not only the sale price but also the title deed fees, expenses, and transaction costs paid by the buyer, along with legal interest, into the court's treasury within the period determined by the court. A registration decision cannot be issued without these expenses being paid.

5. CASES WHERE THE RIGHT OF PREEMPTION CANNOT BE EXERCISED OR HAS BEEN FORfeiTED

Although the statutory right of pre-emption provides a strong safeguard for shareholders, the legislator has restricted or eliminated the exercise of this right in some cases.

A. Waiver of Stakeholder Rights

A co-owner cannot make a general waiver in advance for potential future sales. However, other co-owners may waive. The co-owner who waives their right can no longer file a pre-emption lawsuit regarding that sale. For the waiver to be valid, it must be in writing; however, registering it in the land registry is important as evidence against third parties.

B. Actual Division (Sharing) Situation

One of the most debated issues in Supreme Court jurisprudence and legal doctrine of de facto partition . If a jointly owned immovable property (for example, a large plot of land or a field) has been de facto divided among the co-owners many years ago; if each co-owner has allocated a specific portion for their own use, demarcated its boundaries with fences or walls, and everyone uses their own portion independently, then the claim of pre-emption by the other co-owners when one of the co-owners sells their de facto portion to a third party contrary to the principle of good faith (Turkish Civil Code, Article 2) . The Supreme Court rejects the claims of pre-emption by other co-owners in cases of de facto partition where each party uses their own portion, on the grounds that it constitutes an abuse of rights.

6. RELATIONSHIP AND CONFLICT OF THE RIGHT OF PREEMPTION WITH OTHER LEGAL INSTITUTIONS

The right of pre-emption sometimes overlaps with other rights within the system of property law. The legal consequences of these overlaps have been clarified by laws and high court precedents.

A. The Relationship Between Pre-emption Rights, Possession, and Prevention of Interference

The right of pre-emption, being a constitutive right regarding the transfer of ownership, is based on a completely different legal foundation than actions to prevent interference or for possession arising from neighborhood law. The holder of the right of pre-emption claims ownership of a share upon its sale to a third party; therefore, they acquire ownership directly upon the registration decision issued as a result of the lawsuit.

B. Cases Where Multiple Stakeholders Exercise Their Right of Pre-emption

In jointly owned property, there may be more than one co-owner, and any of these co-owners may file separate pre-emption lawsuits within the prescribed time limit following a sale to a third party.

• If more than one shareholder wishes to exercise their right of pre-emption, the court will distribute the sold share among these shareholders in proportion to their shares .

• For example, if the share being sold is 30% and two shareholders have filed a pre-emption lawsuit with equal shares, this 30% share will be registered equally to both plaintiffs (20% each or according to their respective share percentages); no one will be given preferential treatment.

7. DUTIES, POWERS AND PROCEDURAL RULES

There are mandatory procedural rules that must be followed in the pursuit of the right of pre-emption before the judicial authorities:

• Competent Court: In disputes arising from pre-emption rights, the competent court is the Civil Court of First Instance, regardless of the value of the property in question . Civil Courts of First Instance generally have jurisdiction in such cases concerning property rights and the transfer of ownership.

• Competent Court: Since a pre-emption lawsuit is a lawsuit concerning a real right and directly affects the ownership of immovable property, it in the court of the place where the immovable property is located . Objections to jurisdiction will be considered in lawsuits filed in a different court.

• Burden of Proof: The plaintiff co-owner bears the burden of proving the existence of the co-ownership relationship, that the sale was made to a third party, and that the lawsuit was filed within the legal time limits (three-month notice period or two-year statute of limitations). The defendant third party may argue that proper notification was given or that the lawsuit was not filed within the prescribed time limit.

CONCLUSION

The right of pre-emption, one of the most strategic protection mechanisms in Turkish property law, is a vital instrument that protects the rights of co-owners in joint ownership relationships, balances external interference, and defends the integrity of the ownership structure. Adherence to the strict three-month and two-year forfeiture periods for the statutory right of pre-emption, the proper filing of a lawsuit for sale, and the determination of the true price are critically important for the success of these cases. Observing the principle of good faith in exceptional cases, such as de facto partition, prevents abuse of the right and establishes proportional distribution justice when multiple co-owners exercise the right. A correct analysis of these intricacies of the pre-emption institution directly ensures the equitable resolution of property disputes and the provision of legal certainty.