Turkey offers an attractive real estate market for international investors and foreigners looking to own property due to its unique geographical location, rich cultural heritage, and rapidly growing economy. Foreigners prefer to own property in Turkey for both vacation and investment purposes. Key factors that attract investors include Turkey’s strategic location bridging Europe and Asia, its climate, and quality of life. Additionally, purchasing real estate above a certain value in Turkey provides the right to obtain Turkish citizenship, which creates an extra incentive for investors.
However, alongside these enticing opportunities, there are also risks of fraud in the real estate market. Such risks can lead to significant financial losses, especially for foreign buyers who may be more vulnerable due to language barriers, regulatory differences, and lack of market knowledge. This guide will discuss the practices of real estate fraud targeting foreigners in Turkey and how you can protect yourself from these risks.
Prevalent Practices of Real Estate Fraud Targeting Foreign Nationals
Illegal sales transactions: Real estate transactions, including sale contracts, construction agreements, and promises of sale, are subject to formal requirements mandated by Turkish law. Contracts executed without adhering to these formalities are legally problematic. The Turkish Supreme Court has established precedents indicating that real estate sales contracts failing to meet formal requirements generally do not permit the transfer of property, except in exceptional circumstances. In such cases, judicial authorities typically order the refund of the purchase price rather than facilitating property transfer. Fraudsters may obstruct the return of funds by liquidating assets or falsely declaring bankruptcy. Consequently, it is imperative for purchasers to verify the legal status of the property and conduct all transactions through notaries and land registry offices to ensure legal protection.
Fraudulent ownership claims: Real estate fraudsters may employ forged identification documents and powers of attorney to falsely represent themselves as property owners. This practice is commonly utilized to deceive property buyers. It is crucial for buyers to authenticate the identity and authority of individuals claiming to be property owners and to review land registry records through legal counsel.
Sales promising citizenship: Acquiring property of a certain value in Turkey entitles the purchaser to apply for Turkish citizenship. Fraudsters exploit this provision by offering properties under the pretense that they will grant citizenship, despite the buyer’s inability to secure citizenship.
Inflated pricing: Fraudsters may list properties at prices significantly exceeding their market value to mislead buyers. This practice involves inflating the property's actual worth. Obtaining an independent appraisal report to ascertain the true market value of the property is essential for protecting buyers from such fraudulent schemes.
Nonexistent entities and unauthorized representatives: Some fraudsters may conduct property sales through entities not registered in official records or through unauthorized representatives. It is necessary to verify the registration and licensing of companies and representatives with a specialized attorney to confirm their legitimacy.
Unrealistic return promises: High-return and rapid-profit promises can be indicative of fraudulent schemes. Fraudsters may provide misleading information regarding potential investment returns to deceive buyers. Evaluating the veracity of such promises and obtaining independent assessments are crucial.
Sales based on construction plans: Selling properties that are still under construction or merely in the planning stage is a common tactic used by fraudsters. It is imperative to review construction plans, parcel information, and verify the seller and construction company. Visiting the site and conducting transactions through a legal representative are essential steps.
Protective Measures Against Fraud
Engage specialized legal counsel: Throughout the real estate acquisition process, it is advisable to seek assistance from a specialized attorney to ensure compliance with legal procedures and to verify the accuracy of documents. Attorneys can assess the legal status of the property and the legitimacy of the seller or company, investigate any prior litigation or criminal records, ensure compliance with formal requirements, and safeguard buyers against fraud.
Conduct due diligence on the seller and property: Verifying the identity of the property seller and reviewing the property’s legal documents with the assistance of a lawyer is critical. Additionally, checking the trade registry records of companies and representatives is necessary to confirm their credibility.
Follow official procedures: Real estate transactions should be conducted exclusively through the Land Registry Office or notary public. These institutions ensure that property transfers are executed legally and minimize the risk of fraudulent activity.
Secure payment methods: Payments for property purchases should be made through bank channels, and receipts or invoices should be obtained for each transaction. Avoid cash payments and ensure that all financial transactions are documented. This practice provides legal protection and reduces the risk of fraud.
File complaints and pursue legal action: If defrauded, it is essential to seek support from a specialized attorney to file a formal complaint and initiate legal proceedings. Legal processes allow for the pursuit of rights and address issues related to formal deficiencies and other fraudulent practices. These steps are critical for ensuring justice and mitigating the impact of fraud.