December 8, 2021

Authors: Merve Gündeş, Berfu Yalçın, Serdarhan Güler

Amendments have been made to Law No. 2004 on Enforcement And Bankruptcy (“İİK”) and some other Laws with Law No. 7343 “Law On The Amendment Of The Enforcement And Bankruptcy Law And Some Other Laws” published in the Official Gazette on November 30, 2021 and entered into force on the same date. Pursuant to the amendments on İİK, a couple of new regulations have been provided regarding the structure of enforcement institutions, suspension of execution, confiscation, sale and tender transactions and matters about the delivery of child.

When the amendments regarding the suspension of execution are examined; it will be seen that, in enforcement proceedings with judgment, in the event of an appeal or appeal against the judgment, the suspension of execution decision will be made by the Enforcement Court where the execution proceeding is commenced, not by the Court of Cassation or the Regional Court of Appeals. Again, the same article stipulates that in the event that the appeal is open against the decision rejecting the appeal on the merits, "the effect of the suspension of execution decision will continue until the expiration of the period for filing an appeal". As it is seen, with this amendment, it is clearly regulated that, in the event of an appeal against the decision of the Regional Court of Justice; the suspension of execution decision issued by the Court of Execution during the application of the appeal will continue to be effective until the expiration of the appeal period.

Regarding the presumption of ownership in the action of replevin; it is regulated that, when the property is possessed by a third party and debtor together, if the third party accepts trusteeship, the property may not be taken under custody. However, it is stipulated that the property may be taken under custody if the Court of Execution decides to continue the execution proceeding upon the objection made by the debtor or creditor against the claim of replevin.

Regarding the attachment proceeding and protection procedures of property; under the amendment made to Article 88 of İİK, it is regulated that the properties that have been confiscated but not taken under custody yet, shall be taken under custody or made ready for delivery to the tender buyer upon the sale demand, otherwise the sale shall not be possible.

When the amendments regarding the duration of the sale demand are examined; it is understood that Article 106 of the İİK titled “Sale Demand” has been completely amended, including its title. With the new regulation, the debtor, as well as the creditor, has also been given the opportunity to demand the sale of the confiscated property, and therefore to request a value appreciation. Moreover, the differentiation made according to whether the property is movable or immovable regarding the period of sale demand has been abolished and the sales period has been set as one (1) year for both moveable and immovable properties.

In addition, the period for demanding the sale of the confiscated property, whose sale was demanded in one (1) year but couldn’t be sold, shall lengthen out for one (1) more year as of the expiration date of the first period. Within this framework, it should be noted that in order for the sale to be carried out quickly, it has been made mandatory to deposit all of the value appreciation and sale expenses in advance together with the sale request.

With the new regulations regarding the debtor’s demand for consensual sale, the debtor may be able to demand the authorization of sale within seven days from the notification of the value appreciation. Compulsory sale actions shall stop with this demand and a fifteen-day period shall be given to the debtor by the execution officer for sale with this demand. In this period, the period for demanding the sale shall not continue.

In the consensual sale, the sale price shall not be less than the sum of 90% of the previous value appreciation and the sum of the receivables of the secured and preferential creditors secured by that property, whichever is higher, and the sum of the execution proceeding expenses incurred up to that stage.The file shall be submitted to the Execution Court by the execution office to be decided for approval of the sale and the handover transactions of property to be done if the sale would be made duly and the sale price determined by the parties would be deposited in the file within the given fifteen-day period. The court shall make a final decision on the approval or refusal of the sale by examining the file within a maximum of ten days. The ownership of the property will be transferred to the creditor with approval, and in case of refusal, the price he paid will be returned to the buyer.

When the amendments regarding online sales by auction are examined; pursuant to Article 111/b of İİK, it is seen that the sale of the confiscated property will be made by auction on the electronic sales portal integrated with UYAP from now on. Thus, sales made by compulsory enforcement will now be conducted through an online sales portal instead of a physical environment.

Online sales by auction, will be held on the day and time period specified in the announcement through tendering. The tendering period in the auction is set as seven days. Furthermore, it is understood that the transfer to online sales by auction will be made gradually with the regulation in the temporary article 8 of the İİK. 

With the amendment made to Article 134 of the İİK regarding the termination of the tender, the persons in the land registry who are listed among the persons who can file a lawsuit for termination of the tender, have been expanded as the persons in the official registries, and limited real rights owners have also been allowed to file this lawsuit. With the other third and fourth paragraphs added to the same article, the lawsuits for the termination of the tender to be filed by persons other than creditors, debtors, interested parties registered in the official registry and limited real rights owners; it is conditioned to pay a proportional fee over the tender price and it is stipulated that half of this fee must be paid in advance when demanding the termination of the tender.

Regarding the drafting of the order list; with the amendment made to Article 142/a of the İİK concerning payment on guarantee it is regulated that the right holder creditor, can collect his receivables with a guarantee letter without finalization of the order list. Thus it is allowed that the creditor can collect his receivables through a finalized and indefinite guarantee letter even if the application for complaint or objection has been made against the order list.

Regarding the payment by installments is a tax exception; with the amendment made to Article 111 of the İİK, the official reports or papers to be issued at the execution office due to the commitment of the debtor to pay the debt in regular installments or the agreement conducted between the creditor and debtor before or after the confiscation for the installment of the debt are exempt from stamp duty.

As Article 106 of the İİK is reserved for the motor land vehicles registered in the official registry, it is required that the guarding, value appreciation and sales demands to be done together and the expenses regarding these to be paid in advance. Furthermore, the new amendment stipulates that in the event that deficiency in the expenses which are required to be paid in advance the execution office grant a delay of fifteen days for the deficiency to be done and in case of non-payment the sale will be regarded as not demanded.

When the regulations made regarding the delivery of child are examined; it is understood that Articles 25, 25/a, and 25/b regulating the delivery of child under the İİK have been totally abolished from the law and the duty to fulfill the verdict or injunctions has been taken from the Execution Office. The issues of the delivery of child and establishing a personal relationship with child have been regulated with the additional provisions made to the Child Protection Law numbered 5395.