The Regulation on Real Estate Trade ("Regulation"), establishing significant standards for real estate transactions, has been in force since June 5, 2018. The Regulation includes many provisions including principles and procedures regarding issuance, renewal, suspension and cancellation of the certificate of authorization, as well as real-estate-related consultancy and management services provided by real or legal person merchants, tradesmen and craftsmen.1 The most noteworthy matters introduced by the Regulation were the certificate of authorization and license, as they have a substantial amount of impact on real estate agents, and thus, on today's real estate environment.
In most countries, real estate agents and brokers are required to be licensed in order to conduct real estate activities. Some countries have specific requirements for becoming a real estate agent or broker, such as age limits, background checks, continuing education requirements, pre-licensing courses and exams. To streamline the operation and supervision of the real estate industry in accordance with international standards, the Regulation has imposed certain requirements for issuing authorization certificates and licenses.
Requirements for Granting Authorization Certificate
As per Article 6(ç) of the Regulation, in order to issue an authorization certificate to real person merchants, tradesmen and craftsmen, or representatives authorized by the commercial real estate companies and other legal entities to carry out real estate activities, or to the managers of such company branches, certain conditions are required, such as: (i) having reached the legal age of majority (18), (ii) having obtained a high-school degree at minimum, (iii) not having a record of bankruptcy or, if such a record exists, having been acquitted and discharged from bankruptcy pursuant to the Execution and Bankruptcy Code No. 2004, (iv) not having declared concordat in the past, and (v) not having been convicted of or prohibited from performing their trade or craft due to any criminal offences listed in the same article.
In addition to these requirements, Article 10(1) of the Regulation states that real estate agents, representatives and authorized agents of a real estate company or legal entity that is engaged in real estate trade, as well as branch managers of such entities, must obtain a "Professional Proficiency Certificate", which is based on national qualification standards for authorized real estate consultants (Level 5) and real estate agents (Level 4).
All these requirements are essential to protect the public and to increase the quality of services provided by a real estate agent. Similar to the certification and licensing rules in the U.S. and in European countries, the Professional Proficiency Certificate is mandatory and those who fail to receive this certificate within the required period will no longer be able to practice real estate activities pursuant to the Regulation.
Amendment to the Regulation
Amendment to the Regulation on Real Estate Trade ("Amendment") was published in the Official Gazette on December 11, 2019, extending the deadline for complying with the requirements set under Article 6 of the Regulation.2
Provisional Clause 1-(1) of the Regulation provides the following:
"Merchants, tradesmen and craftsmen who are not within the scope of Article 3 of the Regulation and who engage in real estate trade as of the effective date of this Regulation, must obtain a certificate of license within eighteen (18) months ("compliance period") from the date of entry into force of this Regulation in accordance with the provisions of the first paragraph of Article 6 of the Regulation."
Given that the effective date of the Regulation is June 5, 2018, the proposed eighteen-month (18) period ended on December 5, 2019. Accordingly, those who have failed to comply with the Regulation by this date would have been excluded from practicing real estate activities. However, the mass number of applications received by the Provincial Directorates of Commerce through the Real Estate Trade Information Systems, and significant delays in processing applications for various requirements (such as being registered in the professional chamber of the enterprises and possessing a professional qualification certificate) required extension of the compliance period. As a consequence, the Ministry of Trade has extended the compliance period to August 31, 2020, through the Amendment and granted merchants and real estate agents who carry out real estate trade activities additional time to obtain their certificates of license and professional proficiency in order to create an effective real estate environment.
This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in March 2020. A link to the full Legal Insight Quarterly may be found here
1. See https://www.mevzuat.gov.tr/Metin.Aspx?MevzuatKod=7.5.24645&MevzuatIliski=0&sourceXmlSearch=ta%C5%9F%C4%Blnmaz%20ticareti (last accessed on February 2, 2020)
2. The Official Gazette dated December 11, 2019, available at https://www.resmigazete.gov.tr/eskiler/2019/12/20191211-12.htm (last accessed on December 23, 2019).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.