Brokerage agreements are governed by Articles 520-525 of the
Turkish Code of Obligations ("Code"). Brokerage
agreements are the agreements where a broker prepares an
environment to enable the parties to reach an agreement, and
undertakes to be the intermediary for the execution of an
agreement, and qualifies for a fee after the execution of such
agreement. Real estate brokers, employment offices, exchange
brokers, financial brokers (eg: persons connecting the seller of a
company and buyers) are what constitutes brokers.
Persons who are considered as brokers provide an opportunity to
parties to reach an agreement and acts as intermediates between
those persons who are to execute an agreement, and/or directs and
leads the negotiations of this agreement.
may be the lead in identifying persons who seek to reach an
agreement in accordance with the request, needs, terms and
conditions of the principal under the brokerage agreement, and
suggesting those people to the principle contact, and may gather
the parties together, and assist them in connecting with each
may be actively involved in the negotiation process of the
parties, prepare or comment on the main agreement, and thus, may
play an active role in the execution and signing of such
The principal may appoint more brokers. Those brokers may have
differing duties under the main brokerage agreement, or may be
appointed to act in concert with the existing broker(s).
There is no precedent form with respect to brokerage agreements
except for real estate brokerage agreements. However, having a
written form of brokerage agreements is important for the purposes
of evidence and future disputes. Real estate brokerage agreements,
wherein the broker connects the buyer/tenant and the lessor/seller
of a certain real estate, must be in writing. Provisions under the
Code with regard to representation shall apply to brokerage
Rights and Obligations of the Broker
In principal, brokers are entitled to a fee when the parties
reach an agreement, and upon the execution of the final and main
agreement. However, the principal and the broker may agree on the
payment of a fee (a portion or full payment thereof) even if the
agreement is not executed. If there is no agreement, the brokerage
fee may be determined according to the tariff, or upon private
agreement, if there is no tariff according to the practice. (Code
If the parties agree on the payment of the broker's expenses
as set forth in the brokerage agreement, then the expenses of the
broker shall be paid, even if the main agreement is not executed
and signed. In practice, brokerage agreements determine the payment
of the documented expenses of the brokers within a limited capped
amount, and for any overage expenses, the broker shall obtain the
prior consent of the principal.
The broker, in principal, shall fulfill his duties in person;
however, as per Article 507 of the Code, he may delegate his duties
to a third person; in such case, he shall be responsible for the
acts of such third person.
The broker shall report to the principal with regard to his
actions, and act in accordance with the instructions given by the
principal. The broker shall be loyal, and shall fulfill the duty of
care. In the case of a breach of his duty of care, he may forfeit
his right to claim the payment of the fee. As per Article 23 of the
Code, if the broker acts in favor of the counterparty and not the
principal, in breach of his duty, or acts contrary to good faith
and agrees on a payment of a fee from the counterparty, then he
forfeits his right to claim the payment of the fee and the
Obligations of the Principal
The main obligation of the principal is the payment of the fee
of the broker, if and when the parties reach a final agreement, and
upon execution of the agreement. If the payment of the expenses is
agreed to between the broker and the principal, then the principal
shall pay all agreed expenses even though the main agreement is not
executed and signed. The broker may request ordinary expenses, and
expenses which are reasonably considered mandatory in the due
fulfillment of his duties.
The principal may not appoint another broker if there
exclusivity exists between the broker and the principal. The broker
may claim indemnity in the event of a breach of an exclusivity
Brokerage appears as the legal basis for real estate brokers,
employment offices, exchange brokers, and financial brokers under
the Turkish Obligations Law. Brokers bring together parties and
provide an opportunity to parties to reach an agreement, and then
acts as intermediary between those persons who are to execute an
agreement, and/or direct and lead the negotiations of agreement.
Therefore, brokers play a significant role in ordinary and
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.
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