Musa Karabacak (1)
1. Introduction and Scope
A lawsuit for the elimination of joint ownership (In Turkish: Ortaklığın giderilmesi / izale-i şuyu) refers to the termination of joint ownership of movable or immovable property and the division of the relevant property or right among the co-owners or partners.
In disputes over the elimination of joint ownership, the parties primarily attempt to divide the property in kind, to the extent permitted by legislation. If an agreement cannot be reached, the parties may resort to legal remedies, requesting division either in kind or through liquidation. In practice, due to the frequent impossibility of division in kind, such disputes are often resolved through the sale of the property.
As of September 1, 2023, mediation has been designated as a precondition for filing lawsuits in disputes regarding the elimination of joint ownership (2). Accordingly, lawsuits filed for the elimination of joint ownership without initiating the mandatory mediation process may be dismissed on procedural grounds.
In this article, we will briefly explain the concept of dissolving co-ownership and the mediation process, outline the rules and consequences of mandatory mediation in such disputes, and address ambiguous aspects of mediation in these cases.
2. Methods of Dissolving Co-Ownership
2.1 Division in Kind
Co-owners may divide the jointly owned property in kind either through mutual agreement or by court order. If the parties cannot agree, a court may order division in kind through a lawsuit for the dissolution of co-ownership.
Division in kind requires the absence of obstacles such as:
- An agreement to maintain co-ownership,
- The property being permanently allocated for a specific purpose, or
- Restrictions arising from zoning laws.
2.2 Transition to Condominium Ownership
If the dispute involves real estate suitable for condominium ownership, one of the co-owners may request the establishment of condominium ownership and allocation of independent units as a means of division. The court may decide on the transition to condominium ownership based on documents specified in Article 12 of the Condominium Law (Law No. 634, Article 10/6).
2.3 Division Through Sale
Articles 699 and 703 of the Turkish Civil Code (TCC) provide for division through sale if division in kind or transition to condominium ownership is not possible.
Jointly owned property may be sold through negotiation or public auction. In practice, sales through negotiation are rare. If the property cannot be divided without a significant loss in value, the court may order a sale by public auction. This auction may be open to all bidders or restricted to co-owners only.
3. Who Can File a Lawsuit?
As a rule, the right to file a lawsuit is granted to all co-owners or joint owners. However, decisions by the Court of Cassation’s General Assembly on Civil Law and its 6th Civil Chamber have established that creditors may also file a lawsuit for the dissolution of co-ownership.
“…When Articles 94 and 121 of the Enforcement and Bankruptcy Law (EBL) are evaluated together with the relevant provisions of the Turkish Civil Code, it is evident that creditors may file a lawsuit for division, particularly when they have acquired or attached a share in an inheritance or hold a certificate of insolvency against an heir…” (Court of Cassation General Assembly on Civil Law, 02.04.2003, 6-253/270)
“…Pursuant to Article 121 of the EBL, creditors are explicitly entitled to file such a lawsuit…” (Court of Cassation 6th Civil Chamber, 01.02.2005, 9679/351)
As indicated in the above decisions, creditors of one of the heirs may also have the right to file a lawsuit. However, for a creditor to initiate such a lawsuit, they must obtain a certificate of authority from the Enforcement Court, which is a specific procedural requirement set forth in the law.
4. Mediation Mechanism
4.1. Definition of Mediation
In its simplest terms, mediation is a process where a dispute is resolved based on the voluntary participation of the parties, facilitated by a neutral and reliable third party known as the “mediator.” The resolution is achieved through mutual communication, adhering to principles and methods agreed upon by the parties, and focusing on their shared interests.
Parties can choose mediation voluntarily (Optional Mediation) as a faster, more efficient, and easier alternative to litigation. Alternatively, the law may stipulate that mediation is a precondition for filing a lawsuit (Mandatory Mediation).
For detailed information on mediation, please refer to our article linked here.
4.2. Consequences of Not Applying for Mandatory Mediation
In some cases, mediation is mandated by law as a prerequisite for initiating legal proceedings. In such instances, parties must first apply to a mediator before filing a lawsuit. Failure to do so can result in the dismissal of the case.
If the parties fail to reach an agreement during mediation, they may proceed to litigation. However, the mediation report must be attached to the lawsuit petition. If missing, the court will request its submission. Lawsuits initiated without prior mediation in cases where it is mandatory will be dismissed procedurally.
4.3. Duration of Mediation
For disputes related to the elimination of joint ownership, the mediation process is governed by HUAK Article 18/B-9. The mediator must conclude the application within three weeks from the date of their appointment. This period may be extended by the mediator for a maximum of one additional week in compelling circumstances. In practice, the mediation process typically lasts up to four weeks.
5. Mandatory Mediation in Elimination of Joint Ownership
In practice, lawsuits for the elimination of joint ownership can be challenging for parties due to factors such as the large number of parties involved, high legal costs, and lengthy litigation periods. Resolving the dispute through mediation offers significant advantages, including savings on the cost of litigation and the value of the property subject to the dispute. Mediation also allows disputes to be resolved much faster.
Given that such disputes often involve family members, the lengthy judicial process can lead to family tensions and lasting conflicts. Mediation helps resolve disputes more quickly, potentially preventing or mitigating these issues.
Another advantage of mediation is the avoidance of selling assets with sentimental value, often regarded as “family heirlooms,” through auction or other means.
Lastly, in lawsuits for the elimination of joint ownership, the parties act as both plaintiff and defendant, which can create uncertainty regarding their claims. Mediation eliminates this uncertainty by simultaneously addressing the requests of all parties without distinguishing between plaintiffs and defendants. This feature makes mediation particularly suitable for resolving such disputes.
6. Annotations in the Mediation Process
6.1. Annotation Under HUAK Article 17/B
During the mediation process, parties can request, in writing, to have the mediator record their agreement to restrict the right of disposition. The mediator then applies to the land registry office to place an annotation on the property, limiting the parties’ right of disposition. This annotation, governed by HUAK Article 17/B, is effective for the duration of the mediation process and, at most, for three months from the date it is entered. The scope of this annotation is determined by the written agreement submitted by the parties to the mediator. The annotation restricting disposition rights is automatically removed upon the parties’ agreement or at the end of the three-month period.
6.2. Enforceability Annotation
If the parties reach an agreement during mediation, they sign a document specifying the terms of the agreement together with the mediator. This document, known as the “settlement agreement,” constitutes a private contract. However, it can acquire the force of a court order in two ways:
1. By obtaining an enforceability annotation.
2. When signed jointly by the parties, their attorneys, and the mediator in cases where such a requirement is not stipulated by law.
According to HUAK Article 18/B (3), an enforceability annotation is mandatory for agreements reached during mediation in disputes concerning the dissolution of joint ownership. This ensures the settlement agreement has the legal effect of a judgment, making it suitable for enforcement.
For disputes regarding the elimination of joint ownership, the enforceability annotation for property-related agreements is obtained from the civil court of peace where the property is located. For other agreements, it is obtained from the court where the mediator operates. The court reviews whether the agreement complies with the mediation process, is suitable for enforcement, and adheres to legal limitations and principles related to the property.
7. Questions and Answers
• Is it mandatory to apply to a mediator before filing a lawsuit for elimination of joint ownership?
Yes, with the regulation introduced under Article 18/B of the HUAK on September 1, 2023, parties are required to bring the dispute before a mediator as a precondition before filing a lawsuit. Thus, applying to a mediator has become obligatory.
• Who pays the mediation fee?
No fee is charged when applying for mandatory mediation. If the parties reach an agreement during the sessions, they are generally equally responsible for the fee. However, the parties may agree otherwise, such as having one party bear the entire fee. The mediator’s fee is determined based on the Mediation Minimum Fee Tariff. If no agreement is reached, the state may cover the cost for up to two hours of mediation sessions.
• Am I obligated to attend the mediation session if I am a party to the dispute? What happens if I do not attend?
As a general rule, parties are not obligated to attend mediation sessions. The consequence of non-attendance is that the dispute cannot be resolved through mediation. However, if a party fails to attend without a valid excuse, they may be held responsible for the entire litigation costs if a lawsuit is subsequently filed, even if they are partially or wholly successful in the case. Additionally, attorney fees will not be awarded in favor of the absent party.
• Can parties exercise their rights over the disputed property during the mediation process?
If parties have disposal rights over the property in question, they may continue to exercise these rights during the mediation process. However, they may mutually agree to restrict such actions and request an annotation to that effect. The right to claim mesne profits (ecrimisil) remains reserved for the parties.
• Can I initiate enforcement proceedings with the mediation agreement document?
According to Article 18/B of the HUAK, the mediation agreement document signed after the mediation session is not directly enforceable. To make it enforceable, a separate annotation of enforceability must be obtained from the competent civil court of peace.
• What should I do if we fail to reach an agreement in mediation?
If the parties cannot agree during mediation, they may then bring the dispute before the competent civil court of peace and proceed through litigation.
(1) Final-year student at Istanbul University Faculty of Law
(2) With the addition of Article 18/B to the Law on Mediation in Civil Disputes (HUAK) by Article 37 of Law No. 7445, applying to mediation before filing a lawsuit for the elimination of joint ownership has been made a precondition.
Note: For the sources and legal references of the article, please check Turkish version.
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