How to Recover a Property Transferred on the Basis of Mutual Trust in Türkiye

In Türkiye, it is not uncommon for individuals to transfer ownership of property to someone they trust, often a relative, friend, or business partner, believing that the property will later be returned to them. Such arrangements, based purely on good faith, are known as fiduciary transfers in Turkish law and are referred to as inançlı işlemler.

Although these transactions are common, they involve significant legal risk. In many cases, the transferee refuses to return the property or acts in violation of the agreement, leaving the original owner in a difficult position. At Bayraktar Attorneys, we frequently represent clients who wish to reclaim their property transferred under mutual trust, guiding them through the procedural and evidentiary challenges that such cases entail.

What Is a Fiduciary Transfer?

A fiduciary transaction occurs when a person transfers ownership of an asset to another individual for a specific reason, with a mutual understanding that the transferee will return it once that purpose is achieved. Although the official records may show a sale, both parties privately agree that the transfer is temporary.

For example, an individual may transfer a property to a trusted acquaintance to provide collateral for a loan or to protect an asset during a period of financial uncertainty. The parties may sign a written declaration that once the debt is paid or the specific goal is reached, the property will be re-transferred to the original owner.

The Court of Cassation (Yargıtay) defines fiduciary transfers as arrangements in which the transferor gives ownership of an asset for management, security, or debt satisfaction, while the transferee holds and later returns it in line with the fiduciary purpose. This combination of legal transfer and private agreement makes fiduciary transactions legally complex and highly dependent on proper documentation.

Who Are the Parties and What Types of Fiduciary Transactions Exist?

Every fiduciary transaction involves two main parties:

• Transferor (inanan):The person transferring ownership with the intention of reclaiming it.

• Transferee (inanılan):The person temporarily receiving ownership and agreeing to return it later.

Turkish law distinguishes between two types of fiduciary transactions depending on whose interests are prioritized.

1. Basic Fiduciary Transactions

These transactions are primarily for the benefit of the transferor. The transferee acts as a custodian or manager, handling the property in accordance with the transferor’s instructions. This is similar to a mandate (vekalet) relationship, meaning the transferee must act with care, keep proper records, and return the property when requested.

For example, a property owner may transfer a title to a family member so they can manage it or handle legal proceedings on their behalf. Once the management task is completed, the transferee must transfer the property back.

2. Mixed Fiduciary Transactions

In these transactions, the transferee benefits more directly. This type usually arises when property is transferred as security for a debt. Here, the transferee (often a creditor) holds the asset until full repayment and may even sell it if payment is not made. The provisions governing pledges and mandate agreements apply to these arrangements as long as they are compatible with the fiduciary nature of the relationship.

Why Are Fiduciary Agreements Common in Türkiye?

In daily life and business, fiduciary arrangements are often used to:

• Provide collateral for loans,

• Protect assetsfrom creditors,

• Manage real estateor investments on behalf of another person,

• Facilitate the collection of debts, or

• Avoid formal legal restrictions or time-consuming procedures.

One common example is when an individual transfers property to a creditor to secure a personal loan. The transfer appears as a sale in the land registry, yet the parties agree in writing that the property will be returned after repayment. While this arrangement may seem practical, it also exposes the transferor to major legal risks if the transferee breaches the agreement or sells the property to a third party.

Are Fiduciary Transfers Legally Valid in Türkiye?

According to settled Court of Cassation jurisprudence, fiduciary transfers are valid between the parties as long as they reflect the genuine intentions of both sides. However, transactions involving immovable property require particular attention due to the formal registration requirement in the Land Registry Law.

Because Turkish land registry offices are not allowed to record conditions such as “this property will later be returned,” parties often register the transaction as a standard sale. While this satisfies the formal requirement, it creates a legal risk: the transferee becomes the official owner in the land registry, even if the real intention was only to hold the property temporarily.

To overcome this, the Court of Cassation recognizes that a fiduciary agreement that is not recorded in the land registry may still be valid, provided it can be proven by written evidence.

What Are the Legal Risks of Fiduciary Transactions?

While these transactions are based on trust, they carry serious legal risks. Once ownership is transferred, the transferee legally becomes the property owner, and any action they take can affect the transferor’s rights.

1. Unauthorized Sale to a Third Party
   The transferee may sell the property to someone else. If the buyer acts in good faith, the sale is legally protected. In such cases, the original owner’s only remedy is to seek damagesfrom the transferee.

2. Seizure for the Transferee’s Debts
   The property may be seized for the transferee’s personal debts since it legally belongs to them. The fiduciary agreement does not protect against enforcement actions initiated by good-faith creditors.

3. Death of the Transferee
   If the transferee dies, ownership passes to their legal heirs. Unless the heirs acknowledge the fiduciary arrangement, recovering the property may become extremely complicated.

4. Proof of the Agreement
   The burden of proof always lies with the transferor. Without proper written evidence, courts are unlikely to accept that the property was transferred merely on trust.

How Can the Original Owner Recover the Property?

When the transferee refuses to return the property, the correct legal action is a lawsuit for registration (tescil davası) based on Article 716 of the Turkish Civil Code. This lawsuit aims to compel the transferee to transfer the title back to the rightful owner.

Although some legal opinions argue that a claim for correction of wrongful registration may also be filed, this approach is controversial. Because fiduciary transactions are valid, the land registry entry is not technically “wrong.” Therefore, the most reliable and accepted method is the compel registration lawsuit.

How to Prove a Fiduciary Transaction

The 1947 Unification of Judgments Decision of the Court of Cassation established that a fiduciary relationship must be proven through written evidence. This may include:

• A written fiduciary agreement signed by both parties,

• Correspondence or documents showing the purpose of the transfer, or

• A written acknowledgment by the transferee.

If such written evidence exists, witness testimony may also be accepted under Article 202 of the Code of Civil Procedure.

There is no specific limitation period for these cases, so the general 10-year limitation period in the Turkish Code of Obligations applies to all related claims.

Practical Tips to Prevent Legal Problems

• Always document the agreement in writing, even if it involves family or close friends.

• Avoid oral agreements, as they are almost impossible to prove.

• Include clear terms about when and how the property will be returned.

• Seek legal advice before transferring titleto ensure that your arrangement can be enforced in court if needed.

• If you already transferred property, act promptly to collect evidence such as written messages, bank receipts, or notary statements that indicate the true purpose of the transaction.

Conclusion

Fiduciary transactions are often entered into with good intentions but can easily lead to serious disputes. The transferor legally loses ownership while relying solely on the transferee’s goodwill. Once a conflict arises, the recovery process becomes challenging and highly dependent on written evidence.

For this reason, anyone considering a fiduciary transfer should consult an attorney, prepare formal written documentation, and understand all possible legal consequences before proceeding.

Bayraktar Attorneys Can Assist You

At Bayraktar Attorneys, we provide legal assistance to individuals who have lost property through fiduciary transfers or wish to reclaim real estate transferred under mutual trust. Our experienced lawyers prepare and file lawsuits for registration (tescil davaları), conduct title investigations, and represent clients in complex disputes involving hidden agreements, inheritance complications, and bad-faith transferees.

Our firm delivers strategic legal advice and court representation for both Turkish citizens and foreign nationals. We ensure your property rights are fully protected under Turkish law, from the initial consultation to the final land registry correction.

📞 Contact us: [email protected] | www.bayraktarattys.com
📍 Kolektif House Levent, Talatpaşa Cd. No: 5/1, 34394 Şişli / İstanbul, Türkiye