In real estate sales, the parties may give the seller the opportunity to repurchase the real estate if certain conditions are met. The question of what is the right of fidelity is among the topics that are wondered especially by those who want to buy back their real estate under certain conditions after selling it. The right of fidelity, also known as the right of repurchase, is a right agreed upon by contract and the exercise of which is subject to certain conditions.
The right of fidelity, in simplest terms, is the right that allows the person who sells a good to repurchase that good under certain conditions. This practice, also known as the right of repurchase, occurs especially in real estate sales. During the sale, the parties can make an agreement so that the seller can take back the real estate in the future.
The important point here is that the right of fidelity does not automatically invalidate the sale. In other words, the seller cannot re-own the property simply by saying "I want to buy back the house I sold." For this, there must be a valid right of fidelity and the conditions specified for repurchase must be met. Therefore, how the right is established and under what conditions it can be used is important for both the buyer and the seller.
How to Establish the Right of Fidelity?
In order for the right of redemption to arise, the buyer and seller must agree on repurchase. In other words, this right does not arise automatically with the sale of the real estate. The parties can determine in their contract under what conditions and within what period of time the seller can take back the real estate.
In order for the right of fidelity agreement regarding real estate to be valid, it must be drawn up in accordance with the formal conditions prescribed by law. At this stage, the parties can agree on the repurchase price, the period for which the right will be exercised and other conditions. Thus, it becomes clearer which conditions apply in case the right is wanted to be used in the future.
The issue of annotation on the title deed is also important in terms of asserting the right of fidelity against third parties. Annotation of the right in the land registry ensures the protection of the right owner in case the real estate is transferred to another person later.
How to Use the Right of Fidelity?
In order for the right of fidelity to be exercised, a valid right of redemption must first be established between the parties. According to the Turkish Code of Obligations, the validity of the repurchase agreement in terms of real estate sales depends on its official regulation. For this reason, a verbal agreement between the parties alone is not sufficient to establish a valid right of fidelity on the real estate.
The right holder can exercise his right by notifying the other party of his will to repurchase when the conditions specified in the contract are met and the right's usage period continues. At this point, if the repurchase price, payment terms or other conditions regarding the exercise of the right are specified in the contract, these should also be taken into account.
Exercising the right of fidelity does not mean automatic cancellation of the previous sales transaction. When the right is exercised, the process of transferring the real estate back to the right owner begins, in accordance with the conditions agreed in the contract. If the parties cannot agree on the validity of the right, the price or the transfer, the dispute may be referred to the judiciary.
How long does the right of fidelity last?
The right of fidelity cannot be established indefinitely. According to Article 238 of the Turkish Code of Obligations, the right of repurchase can be agreed for a maximum of 10 years. The parties may specify a period shorter than 10 years in the contract, but this period cannot exceed the upper limit specified in the law.
For example, if the parties have agreed on the right of fidelity for 5 years, the beneficiary must exercise his right of redemption within this period. When the period expires, the contractual repurchase opportunity also disappears.
The 10-year limit is also important when it comes to annotating the title deed. According to Article 736 of the Turkish Civil Code, if the right of redemption is annotated in the land registry, the effect of this annotation may continue for 10 years from the date of the annotation. Therefore, when evaluating the duration of the right of fidelity, it is necessary to look at both the period determined by the parties in the contract and the status of the annotation in the land registry.
Can the Right of Fidelity Be Annotated on the Title Deed?
The right of fidelity can be annotated in the land registry if the necessary conditions are met. Annotation in the land registry is especially important for the protection of rights. Because, while the right of fidelity is a personal right only when agreed upon between the parties, its annotation in the title deed enables the right to be asserted against persons who subsequently gain rights on the real estate.
According to the Land Registry Regulation, the documents that must be submitted in the annotation of the right of redemption may vary depending on how the right is established. If the right of repurchase is established together with the sale transaction, the official deed, if it is established separately from the sale, the contract drawn up by the notary public forms the basis for the annotation process.
This distinction becomes even more important if the real estate is transferred to a third party while the right of fidelity continues. A right of redemption annotated in the title deed does not automatically disappear when the real estate changes hands. The right owner may also assert his right against the new owner during the period during which the annotation and the right of redemption are valid. For this reason, annotation on the title deed provides stronger legal protection to the rights holder, especially in long-term repurchase agreements.
In Which Situations Does the Right of Fidelity End?
Since the right of fidelity can be exercised for a certain period of time and under the conditions agreed in the contract, it is not a permanent right. The most basic reason for termination is the expiration of the period determined by the parties without exercising the right. The maximum period stipulated by law for the right of redemption cannot be exceeded.
Apart from this, when the right holder uses his right of fidelity properly, the existing right ends and the process of re-transferring the real estate comes to the fore. Removing the right of repurchase by mutual agreement of the parties may also cause the right to expire.
Regarding fidelity annotated in the title deed, it is necessary to distinguish between the right itself and the effect of the annotation. Expiration of the annotation period is important in terms of ending the protection provided by the right against third parties. For this reason, when evaluating whether there is a right of fidelity in a real estate, in addition to the contract, the duration of the right and the current records in the land registry should also be examined.
What is the Fidelity (Repurchase) Right Fee?
When it comes to the right of fidelity, it is not possible to talk about a fixed repurchase price that is valid for everyone. The price at which the real estate will be taken back can be determined in the contract made by the parties. This price may be the same as the initial sales price, or it may be a different amount agreed upon by the parties.
However, the buyback fee is not the only cost that may be incurred. Additional expenses such as title deed fees and revolving fund fees may also arise when the right of fidelity is annotated in the title deed or when the real estate is re-transferred. Since these amounts vary depending on the type of transaction and current tariffs, it would not be correct to give a fixed figure from the beginning. When calculating the total cost of the right of fidelity, it is necessary to look not only at the repurchase fee to be paid for the real estate, but also at other expenses that may arise during the title deed transactions.
The right of fidelity is an important legal right that allows you to repurchase your real estate under certain conditions. However, in order to exercise this right, you must take into account the conditions, period and title deed records specified in the contract. For this reason, it is important to carefully review your existing documents and current title deed information during the repurchase process.
Frequently Asked Questions
Can I Buy Back the House I Sold?
You do not have the right to take back a house you sold just because you are the previous owner. However, if a valid right of fidelity has been established during or after the sale, you can take back the house within the specified period and conditions. Therefore, you need to check whether you have the right to buyback and the terms of the contract.
Does the Right of Fidelity Pass to the Heirs?
When evaluating whether the right of fidelity will pass to the heirs, the content of the contract and the provisions regarding the transfer of the right should be taken into consideration. Unless otherwise agreed in the Turkish Code of Obligations, it is accepted that the right of repurchase arising from the contract cannot be transferred, but can only be passed on by inheritance. For this reason, when the beneficiary dies, the right of fidelity, which continues to be valid, may also come to the fore for the heirs.
Can a house with right of fidelity be sold?
The existence of the right of fidelity does not alone prevent the sale of the real estate to another person. However, if the right of redemption has been annotated in the land registry, it may also have consequences for the new owner who purchases the real estate. For this reason, it is important to examine the title deed records and the scope of the annotation, if any, before purchasing a real estate with the right of redemption.
