Background
A bank extended credit to a construction company and secured the loan with a mortgage over a plot of land, registering the full mortgage amount as a charge against the parcel. After the loan was made, the construction company built a multi-unit building on the land and converted it to condominium ownership (kat mülkiyeti) under Law No. 634 (the Condominium Ownership Act, “KMK”). During that conversion the mortgage was carried over to all 16 independent units in the building; however, instead of distributing the total mortgage debt among the units in proportion to each unit’s allocated land share, the full mortgage amount was registered separately against every unit. The plaintiff subsequently purchased Unit No. 12 on the third floor, allegedly on the seller’s promise that the mortgage would be discharged within two months.
When the original construction-company debtor defaulted, the bank launched enforcement proceedings against the debtor and all unit owners. During the litigation the bank assigned its entire claim — together with the mortgage and all other security interests — to a third party (the “assignee”) pursuant to Article 183 of the Turkish Code of Obligations. The plaintiff redirected the lawsuit against the assignee under Article 125 of the Code of Civil Procedure and continued proceedings. The plaintiff, who had no personal liability for the underlying construction-company debt, sought a court ruling under Turkish Civil Code Article 884 allowing discharge of the mortgage on their unit by depositing only the share of the mortgage debt proportionate to their unit’s land-share ratio.
The Gaziantep 2nd Commercial Court of First Instance accepted the claim. It held that the plaintiff’s responsibility — for both the mortgage principal and the enforcement costs — was limited to the proportion corresponding to their unit’s land share, calculated that amount, and ordered the plaintiff to deposit it for payment to the mortgage creditor. The assignee (additional defendant) appealed to the Gaziantep Regional Court of Justice.
The Court’s Holding
The 11th Civil Chamber dismissed the appeal on the merits. The court grounded its decision in the interplay of three statutory provisions. KMK Article 5/V provides that rights registered or annotated on a land-registry page before condominium ownership is established automatically attach to the independent units in proportion to their land-share ratios when condominium status is created. KMK Article 13/III reinforces this by requiring that, at the moment of condominium registration, any existing rights recorded on the main-property page be transferred to each unit’s individual condominium-register page. The court also referenced the Land Registry Regulation (Articles 66 et seq., including Articles 68–70 on transfer of mortgage rights), which govern how encumbrances follow partition or conversion of registered parcels.
Applying those rules, the court found that once condominium ownership was established over the land, the mortgage liability attached to each unit only to the extent of that unit’s land-share ratio — not for the full mortgage amount. Because the disputed unit had subsequently changed hands twice before reaching the plaintiff, the court further confirmed that no “collective mortgage” (toplu rehin) arrangement remained; only the proportionate land-share liability survived. The expert reports on file had already computed the plaintiff’s share on that basis, and the court saw no deficiency in that methodology.
The assignee’s central appellate argument — that prior mortgage releases obtained on other units in the building must be tracked and deducted from a running balance before the plaintiff’s liability can be fixed — was expressly rejected. The court held that the plaintiff’s obligation is determined solely by the ratio of their unit’s land share to the total, irrespective of what happened on other units; a separate banking-expert report on overall debt reduction was therefore unnecessary.
Key Takeaways
- Under KMK Article 5/V, a mortgage placed on bare land automatically converts — upon establishment of condominium ownership — into proportionate charges on each unit, measured by that unit’s land-share ratio; a creditor cannot hold every unit liable for the full original mortgage amount.
- A unit owner who bears no personal liability for the underlying debt may discharge the mortgage on their unit under Turkish Civil Code Article 884 by depositing only the proportionate share of the debt, without regard to payments made or releases granted on other units in the same building.
- An assignment of the secured claim to a third party mid-litigation does not alter the plaintiff’s proportionate liability; the lawsuit continues against the assignee under the same legal framework.
- Courts are not required to commission a banking expert report on the global balance of a multi-unit mortgage where the applicable legal standard — proportionate land-share liability — is clear and the expert evidence already addresses that ratio.
Why It Matters
This decision provides important guidance for purchasers of condominium units burdened by pre-conversion land mortgages, a common situation in Turkey’s active residential construction market. It confirms that a buyer who takes a unit subject to a legacy mortgage cannot be required to satisfy the entire original debt — only the fraction reflecting their unit’s land share — and that this rule operates as a matter of statutory law regardless of how the creditor originally registered the encumbrance or what enforcement steps have occurred against co-owners.
For lenders and assignees of secured portfolios, the ruling underscores the need to track land-share allocations at the time of condominium conversion and to adjust their enforcement exposure accordingly. Attempting to hold individual unit owners liable for the aggregate mortgage balance — or demanding proof of payments on other units before releasing a single unit — will not succeed under Turkish law as interpreted here.