Expropriation System in Turkish Law: Theory, Application and Judicial Review

THE EXPROPRIATION REGIME IN TURKISH LAW: THEORY, APPLICATION, AND JUDICIAL REVIEW

I. INTRODUCTION: THE LIMITS OF INTERFERENCE WITH THE RIGHT TO PROPERTY AND CONSTITUTIONAL GUARANTEES

The right to property is protected by Article 35 of the Constitution and Article 1 of Protocol No. 1 to the European Convention on Human Rights (ECHR). Expropriation is one of the most severe interferences with this right. For this reason, in accordance with the rule of law principle, expropriation may only be carried out for the purpose of "public interest," "by law," and "in accordance with the principle of proportionality." According to the established case law of the Constitutional Court, the authority to expropriate is not unlimited; a "fair balance" must be established between the purpose of public interest and the individual's right to property.

II. ANALYSIS OF THE ADMINISTRATIVE PROCESS: PREPARATION AND DECISION STAGES OF EXPROPRIATION

Although the expropriation process begins with the unilateral will of the administration, it is balanced by stages such as judicial review and purchase procedure. This process is a chain of administrative procedures with intensive technical details.

A. Public Interest Decision and Approval Mechanism

The first and constitutive element of expropriation is the "public interest decision." Articles 5 and 6 of Law No. 2942 determine, in a hierarchical manner, which authorities will make this decision and approve it.

• Authority Element: The authority that will make the public interest decision is enumerated exhaustively in the law. A decision made by an unauthorized authority results in the vitiation and annulment of the administrative act in terms of the authority element.
• Reason Element (Justification): The Council of State does not accept a public interest decision based on abstract reasoning; it seeks the existence of a concrete, project-based, studied, and specifically budgeted need. For example, expropriations made "for future needs" are generally annulled by the Council of State 6th Division.

B. Commencement of Expropriation Procedure and Entry in Land Registry (Article 7)

After the expropriation decision, the administration makes a scaled plan of the real property, identifies the owners, and requests that an "expropriation entry" be made in the land registry. This entry is valid for 6 months. If a price determination action is not filed within 6 months, the entry automatically becomes void (Article 7/3). This provision is an important guarantee that prevents the right to property from remaining indefinitely in abeyance.

C. Mandatory Priority of the Purchase Procedure (Article 8)

The legislator has provided for the "purchase procedure" (negotiation) as a mandatory preliminary stage to resolve disputes without bringing them to court.

• Valuation Committee: This committee, established within the administration, determines the estimated price of the real property.
• Conciliation Committee: Conducts negotiation discussions with the owner.
• Purchase Procedure as a Condition of Action: According to the established case law of the Court of Cassation General Assembly and 5th Civil Chamber, if the administration opens a registration action directly without properly attempting the purchase procedure (for example, without properly inviting the owner), the action should be dismissed for "lack of a condition for an action." This stage is not a formal procedure but a substantively effective obligation.

III. JUDICIAL STAGE: PRICE DETERMINATION AND REGISTRATION ACTION (ARTICLE 10)

With the amendment made by Law No. 4650 in 2001, the administration's authority to unilaterally determine the price and take possession was eliminated; a system of price determination by the court and advance payment was introduced. This action is the most technical and most frequently encountered type of action in expropriation law.

A. Legal Nature and Parties of the Action

An Article 10 action is an action filed by the administration, aiming at the determination of the price of the real property and its registration in the name of the administration. The plaintiff is the administration, and the defendant is the land registry owner. In this action, the court is obliged to find the true price in accordance with the "principle of ex officio investigation"; it is not bound by the evidence presented by the parties.

B. Valuation Criteria (Article 11) and Court of Cassation Case Law

The heart of expropriation law is how the value of the real property will be determined. The Court of Cassation 5th Civil Chamber has established an extremely strict and mathematically formulaic jurisprudence on this matter. Real properties are evaluated in two main categories:

1. Real Properties with the Character of Land:

For a real property to be considered land, it must either be within the municipal zoning plan and benefit from municipal services or be within a populated area and actually benefit from these services (Court of Cassation Decision to Unify Case Law dated 17.04.1998, 1996/3 Case, 1998/1 Decision).

• Method: "Comparable Sales Method" (Article 11/1-g).
• Comparable Criteria: The comparable must have; a sale date close to the expropriation date (preferably the same year), not be a special-purpose sale (between relatives, fraudulent, etc.), have characteristics similar to the real property in question, and be an officially registered sale in the land registry. Property tax returns or real estate advertisements cannot be used as comparables.
• Calculation: The value of the comparable real property is updated to the date of action with the PPI (Producer Price Index) and, by proportioning the cadastral differences between the real properties (location, zoning status, etc.), the value of the real property in question is found.

2. Real Properties with the Character of Land (Agricultural Land):

Every place that does not have the character of land is land.

• Method: "Net Income Method" (Capitalization) (Article 11/1-f).
• Data Source: Official data from the District Agricultural and Forestry Directorate is used as the basis.
• Calculation: The annual gross income of crops grown on the land (crop rotation plan) is found, production costs are deducted from this, and the resulting "Net Income" is divided by the capitalization interest rate to find the bare value of the land.
• Capitalization Interest Rate: According to Court of Cassation practice, a rate between 3% and 6% is applied, varying according to the region where the land is located, whether it is irrigated/non-irrigated, and population density. As the rate decreases, the value of the land increases.

3. Objective Value Increase:

The Court of Cassation applies the concept of "objective value increase" in limited circumstances. Increases between 50%-300% determined by experts due to factors such as the location of the real property, road frontage, and proximity to settlements must be based on concrete reasons. Excessive increases made with abstract statements are grounds for reversal.

C. Registration and Payment

The price determined by the court is blocked in a bank by the administration. Once a receipt showing that the price has been deposited is submitted to the court, the court decides on the registration of the real property in the name of the administration and the payment of the price to the owner. Following the annulment decisions of the Constitutional Court, legal interest must now be applied after 4 months from the date of determination have passed.

IV. URGENT EXPROPRIATION (ARTICLE 27): AN EXCEPTIONAL PATH

Urgent expropriation is a temporary measure that allows the administration to "take possession" of a real property in view of the possibility that the ordinary expropriation process (particularly the purchase procedure and registration action) may take a long time.

• Conditions: Cases in which Law No. 3634 on National Defense Obligation will be applied, cases where the President has decided on the urgency, or extraordinary situations provided for in special laws.
• Procedure: The administration applies to the Court of First Instance. The court, within 7 days (in practice, it takes longer), determines the value of the real property through an expert. Once this value is deposited in a bank, the administration takes possession of the real property.
• Legal Nature: The urgent expropriation decision is not a "registration" decision; it only grants the authority to "take possession." Ownership still belongs to the owner. The administration must then necessarily file an Article 10 action to determine the final price and effect registration.
• Council of State Review: The Council of State 6th Division has in recent years subjected urgent expropriation decisions to strict review. It does not consider the administration's mere desire for the "quick completion of the project" sufficient; it seeks the urgency situation to be concrete, necessary, and unavoidable in terms of public interest. Urgent expropriation decisions given on matters other than energy projects (hydroelectric plants, renewable energy facilities) are frequently annulled.

V. EXPROPRIATION WITHOUT LEGAL PROCEDURE: UNLAWFUL INTERFERENCE

The interference of the administration with private property without following the procedures in the Expropriation Law is an unacceptable situation in a state ruled by law. This situation is divided into two categories:

A. Factual Taking of Possession

The administration physically entering the real property, building a road, constructing a park, and establishing a facility.

• Competent Court: Civil Courts (Court of First Instance).
• Nature of Action: The Court of Cassation General Assembly views this situation as "tort." The owner may file an action for "prevention of interference" or "price compensation." In practice, a price action is generally filed, and the price of the real property is collected from the administration and the land registry is transferred to the administration.

B. Legal Taking of Possession

Although the real property is designated in the zoning plan for public purposes such as a school, park, or road, the administration does not expropriate for a long period of time (according to Court of Cassation General Assembly decisions, the reasonable period is 5 years) and restricts the zoning rights of the real property.

• Competent Court: Administrative Courts (Administrative Court).
• Process: With the principle decision of the Court of Conflicts of Jurisdiction dated 2013, it was accepted that these actions should be viewed as "full jurisdiction actions" in administrative courts. The owner seeks compensation for the damage suffered due to the restriction of his property rights.

VI. CONCLUSION AND EVALUATION

Turkish expropriation law is the field of conflict between the administrative power privilege and the individual's right to property. Judicial review operates through "conformity of the action with law" (reason element) in administrative courts and through "payment of the true equivalent (price)" in civil courts.

Critical points for law practitioners are as follows:

1. Valuation: Correct distinction between land and land (agricultural land) and the quality of comparables determine the outcome of the action.
2. Procedure: It must not be forgotten that the purchase procedure is a condition for an action.
3. Urgent Expropriation: It must not be overlooked that this path is exceptional and does not transfer ownership but only grants the authority to take possession.
4. Interest: In light of Constitutional Court decisions, attention must be paid to the dates on which interest begins to apply so that the expropriation price does not suffer value loss.