At Bayraktar Attorneys, we specialize in assisting foreigners with legal matters in Turkey. One area of interest for our clients is real estate transactions, and within that, the Real Estate Brokerage Agreement (Emlak Komisyonculuğu Sözleşmesi) is a crucial legal tool governed by the Turkish Code of Obligations (No. 6098). Specifically, Articles 520 and following outline the regulations on brokerage agreements, a type of contract closely tied to the provisions of agency agreements.
What is a Real Estate Brokerage Agreement?
A Real Estate Brokerage Agreement is essentially a contract where a broker (commonly referred to as an intermediary) agrees to facilitate the formation of a real estate transaction between a buyer and seller. The broker earns a commission if the transaction is successful. According to Turkish law (Article 520), this agreement grants the broker the right to receive payment for their services once they’ve helped the parties reach an agreement.
Key Formal Requirements
To ensure legal validity, several formal conditions must be met when drafting a Real Estate Brokerage Agreement:
- Written Form: The agreement must be in writing and signed by both the property owner and the broker.
- Specific Dates and Details: The agreement should outline specific dates for its execution and the handling of related tasks.
- Clear Financial Terms: The total price of the property and the broker’s commission must be clearly stated.
- Deposit Conditions: The contract should specify what happens to the deposit in case the sale doesn’t go through. If the buyer or seller withdraws, the deposit might be considered a forfeit, also known as a penalty.
- Penalty Clause: A penalty clause can be added if one party unjustifiably cancels the agreement. The amount cannot exceed 4% of the property sale price.
- Broker Commission: Typically, the broker’s commission is 2% from both the buyer and seller, based on the property’s sale price.
- Exclusive Rights: To prevent the sale of the property through another broker, an exclusivity clause may be included. This guarantees the broker their commission if the sale occurs through another party.
- Breach of Contract: The withdrawing party is responsible for paying the full commission to the broker if they back out without a valid reason.
Legal Precedents
A case example illustrates the importance of upholding the terms of a Real Estate Brokerage Agreement. In one instance, a broker successfully facilitated a meeting between a buyer and seller, with an agreed-upon commission of 3% of the sale price. However, when the buyer backed out, the broker initiated legal proceedings to claim their commission. The court ruled partially in favor of the broker, awarding them a portion of the requested amount, reinforcing the validity of such agreements under Turkish law.
This ruling highlighted a critical aspect of brokerage contracts: while brokers are entitled to their fee upon successful mediation of a deal, the court can intervene and adjust the penalty if it is deemed excessively high. This ensures that both parties are treated fairly within the confines of the law.
Conclusion
Understanding the legal intricacies of real estate transactions is essential for both buyers and sellers in Turkey, particularly when working with brokers. At Bayraktar Attorneys, we provide expert guidance on drafting and negotiating Real Estate Brokerage Agreements, ensuring that your rights are protected and your transactions proceed smoothly.
For more details or assistance with real estate matters in Turkey, like real estate investment legal consultancy or property title deed transfers in Turkey, don’t hesitate to contact us.
