Introduction

One of the fundamental principles of the Turkish Civil Code ('TCC') is the principle of reliance on the land registry. This principle plays a decisive role in the acquisition and protection of real rights. In practice, land-for-construction agreements are frequently encountered. In such contracts, following the transfer of ownership (in simpler terms, the title deed) by the landowner to the contractor, the contractor often sells or encumbers the property to third parties. A recurring legal issue arises when the agreement is subsequently found to be invalid or retroactively terminated: whether such third parties could have acquired rights in good faith and whether such rights may be protected.

The Judgement of the Grand General Assembly for the Unification of Jurisprudence of the Court of Cassation, dated 16 May 2025 and published in the Official Gazette on 18 July 2025, constitutes a turning point that resolves this long-standing legal controversy. With this judgement, it was acknowledged that third parties who acquire rights relying on the land registry may benefit from protection pursuant to Article 1023 of the TCC, provided they acted in good faith. However, should it be proven on a case-by-case basis that good faiths was absent, the relevant property may revert to the landowner.

This article examines the legal reasoning underlying the judgement and its potential implications for legal practice.

The Subject of the Dispute

In these types of contracts, it is common for the landowner to transfer shares of the land to the contractor before construction is completed. The contractor then sells these shares or establishes real rights on them in favour of third parties. If the contractor fails to perform their obligations, the landowner seeks retroactive termination and institutes proceedings for cancellation and re-registration of the title.

Under the previously established jurisprudence of the Court of Cassation's 6th Civil Chamber (and the now-defunct 15th and 23rd Civil Chambers), such third parties were considered successors of the contractor. Consequently, they could not invoke good faith protection pursuant to TCC Article 1023. The transfer to the contractor was deemed to be in the nature of an advance, and the retroactive termination of the agreement would invalidate the legal basis for the transfer, rendering it null and void. In such cases, whether third parties acquired ownership or mortgage rights in good faith by relying on the land registry became the principal issue of dispute. Consequently, the 6th Civil Chamber requested unification of jurisprudence.

In the new judgement, however, this interpretation was set aside in favour of the principles of transparency and reliance inherent in the land registry system. It was held that acquisitions by third parties acting in good faith within the scope of TCC Articles 3 and 1023 must be protected.

Article 1023 of the TCC and the Principle of Reliance on the Land Registry

Pursuant to the TCC, the acquisition of immovable property requires registration with the land registry. Similarly, real rights are established through such registration and take effect in accordance with their rank.

It is universally accepted that the land registry reflects real rights truthfully and publicly. Pursuant to Article 1020 of the TCC, anyone with a legitimate interest is entitled to examine the land registry. Those who fail to do so are deemed to have acted without due diligence and cannot subsequently claim they were unaware of a recorded entry.

TCC Article 1023 provides that 'The acquisition of ownership or another real right by a third party who relies in good faith on a registered entry in the land register shall be protected.' This provision seeks to balance legal certainty in transactions and the protection of individual rights. A third party who believes, in good faith, that the person registered in the land registry is the true owner, and who could not have known otherwise even by exercising due care, shall have their acquisition protected.

According to the judgement, protection pursuant to Article 1023 is subject to the following conditions:

• Only third parties may benefit from this protection. The person in whose name a wrongful registration was made, and their universal successors, are excluded.
• The acquisition must be founded upon the registry.
• The right acquired must be a real (in rem) right.
• The third party must have acted in good faith at the time of registration (or, more precisely, when the application for registration was entered into the registry's daily journal).
• All other legal requirements for valid acquisition must be satisfied. If the legal basis for the transfer is invalid or the person requesting registration lacked legal capacity or authority, the acquisition is not protected.

As emphasised in the judgement, a third party who duly acquires property from a registered contractor—having relied on the registry and exercised the required diligence—must have their acquisition upheld.

The burden of proving bad faiths rests with the landowner. Whilst good faiths is presumed, the landowner may attempt to rebut this presumption by pointing to certain factual indicators—such as family or close ties between the contractor and transferee, suspiciously low purchase prices, or rapid successive transfers—to demonstrate the transferee acted in bad faith.

Change in Practice and Its Implications

The judgement clearly states that the previous jurisprudence of the 6th Civil Chamber—under which good faith claims of third parties were categorically dismissed and the property was returned to the landowner—was inconsistent with the principles of relativity of obligations, transparency of the land registry, and the protection of good faiths.

Consequently, if a contractor sells land shares or independent units to third parties or grants mortgages after having been registered as owner, and the contract is subsequently terminated or declared invalid, the good faith claims of third parties must be examined. Where good faiths is not disproven, the third party's acquired rights must be protected.

This marks a fundamental shift in legal practice. Landowners who institute cancellation and re-registration proceedings will now bear the burden of proving the transferee's bad faiths.

The Court also noted that landowners have other legal tools to protect their interests. For instance, they may secure their position by registering a mortgage over the shares transferred to the contractor or annotating the land-for-construction agreement to the registry. The Court emphasised the importance of legal certainty and public trust in transactions, upholding good faith acquisitions as a matter of social order and legal predictability.

Notably, the judgement extensively references academic opinion. Legal scholars such as Prof. Dr. Şahin Akıncı, Prof. Dr. Çiğdem Kırca, and Prof. Dr. Zafer Kahraman have long argued that the invalidity of the contract should not automatically affect third parties and that the doctrine of reliance on the registry must prevail.

Conclusion

The 16 May 2025 Judgement of the Grand General Assembly for the Unification of Jurisprudence introduces a significant shift in Turkish jurisprudence on land-for-construction contracts. It establishes that where such contracts are terminated or declared invalid, third parties who acquire rights from the contractor are not automatically required to return the property to the landowner. Instead, TCC Article 1023 protects their acquisition if they made it in good faith. Only if bad faiths is proven may the title revert to the landowner.

This approach aligns with contemporary legal systems that prioritise legal certainty and reliance on the land registry. It also reflects fundamental civil law principles, such as the relativity of obligations and the transparency of property records.

Whilst this new jurisprudence will alter the burden of proof in disputes between landowners and third-party transferees, it will also encourage greater diligence and foresight in contractual arrangements—without undermining the legal security of honest market participants.

Ultimately, the judgement constitutes a landmark development in both real property law and land-for-construction contract practice.