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The Turkish Civil Code ("TCC", "Law") defines the legal property regime to be applied between the spouses as the regime of participation in acquired property. However, it is also possible for the spouses to choose another property regime other than the legal property regime through an agreement. In this article, it will be analysed the conditions for the spouses who do not wish to continue with the legal property regime to conclude a transition agreement to the separation of property regime.
What is the Property Regime?
The subject of the property regime is the management of all of the property values of the spouses, such as the property of the spouses before marriage, the property acquired after marriage, the property inherited to the spouses within the marriage union, and how the property will be divided and liquidated when the marriage ends. Spouses may agree on how their property will be managed and liquidated by choosing a property regime before or after marriage. If the spouses have not adopted a property regime by agreement, they are deemed to have accepted the legal property regime regulated in the Law. The property regimes defined in the Law are the regime of participation in acquired property, the regime of separation of property, the regime of separation of property with sharing and the regime of partnership of property.
Legal Property Regime According to Turkish Civil Code
In the 1926 Turkish Civil Code, separation of property regime was adopted as the legal property regime. It was thought that this regime created a grievance between the spouses, especially for women. The need for a new regime emerged based on the acquisition of property within the marriage union with the understanding of life partnership. With the Turkish Civil Code that entered into force on 1 January 2002, the legal property regime of separation of property was abolished and replaced by the regime of participation in acquired property.
Regime of Participation in Acquired Property
According to Article 218 of the TCC, the regime of participation in acquired property consists of the acquired property and the personal property of each spouse. Acquired property is the property acquired by the spouses within the scope of this regime by giving in return within the marriage union. Acquired property items are listed one by one in the Law, and these are the income of personal property, compensation paid due to loss of earning capacity, acquisitions in return for work, and payments made by social security or social welfare institutions and organisations or funds and similar funds established for the purpose of assisting the personnel. As for personal property, the assets belonging to each of the spouses before the beginning of this regime can be counted as personal property, moral compensation receivables, and personal use items.
The Law has characterised the property owned by both spouses in detail, and in order to comply with the principle of equality, it has also introduced values that both spouses can claim from each other, such as residual value receivable and value increase share receivable.
Separation of Property Regime
The separation of property regime has separated the assets of the spouses in such a way that they are the personal property of both parties separately. In this regime, since the spouses have only personal assets, the earnings obtained from these personal assets are also recognised as their own. In this context, the debts of the spouses are also considered as personal debts and can only be paid from their personal assets.
Property Regime Agreements
As regulated in Article 203 of the Law, spouses may execute a property regime agreement before or after marriage. Within this scope, the parties may choose, abolish or change the property regime they want only within the framework of the limitations written in the Law.
The Law stipulates that the spouses may agree in the property regime agreement that the assets that should be included in the acquired property arising from the practice of a profession or the activity of a business shall be considered as personal property, and that the income of personal property shall not be included in the acquired property. Again, as stated in the Law, the spouses may waive the value increase share existing within the regime of participation in acquired property with a written agreement and may also change the share ratio. Finally, another principle may be accepted by the property regime agreement for the spouses' participation in the residual value.
Post-marital property regime agreements can be made by issuing or approving them at a notary public. Before the marriage, the choice of property regime can be made in the same way with an agreement at the notary public or by notifying in writing which property regime the parties have chosen during the marriage application.
Agreement on Transition to Separation of Property Regime
With the new Civil Code issued on 1 January 2002, the separation of property regime is no longer the legal property regime. For this reason, the evaluation will be made by taking into account the date of marriage of the spouses in making a transition agreement to the separation of property regime.
- Date of Marriage to be before 1 January 2002
- Conclusion of a property regime agreement within 1 year
from the effective date of the Law
With the introduction of the new legal property regime, the Applicable Law brought convenience to the spouses who were already married. Namely, with Article 10 of the Effective Law, the spouses were given the right to choose the property regime of their choice between 1 January 2002 and 1 January 2003 to be effective from 2002, or to adopt the legal property regime to be effective from the beginning of their marriage.
According to the relevant article, "Unless the spouses choose another property regime within one year starting from the date of entry into force of the Law, they shall be deemed to have chosen the legal property regime effective from this date. However, the spouses may agree that the legal property regime shall be valid from the date of marriage with the property regime agreement within the one-year period stipulated in the paragraphs above."
In line with the issues explained above, if the transition agreement to the separation of property regime was executed within 1 year from the date of entry into force of the Law, it would be effective as of 1 January 2002. The spouses could only conclude a transition agreement to the regime of participation in acquired property, which is accepted as the legal property regime, to be valid from the beginning of their marriage.
- Concluding a Property Regime Agreement After 1 Year
Period Has Elapsed
A property regime agreement may be executed after the expiry of the 1-year period specified in the Applicability Law, but the agreement will be valid prospectively from the date of the agreement.
For instance, let's assume that a couple who got married on 1 January 1999 had the legal property regime of separation of property in their marriage. This couple intends to conclude a separation of property agreement on 1 January 2022. In that case, the separation of property regime will be valid for the 3-year period from the date of marriage until 1 January 2002. When a separation of property agreement is concluded on 1 January 2022, the regime of participation in acquired property will be valid for the 10-year period between 1 January 2002 and this date, and the separation of property regime will be valid from the date of the agreement to the present.
- Date of Marriage to be After 1 January 2002
Couples who will marry after the entry into force of the Law may conclude a property regime agreement before marriage or may choose a property regime with a written notification during the marriage application. Spouses who wish to choose a property regime after marriage may conclude a transition agreement to the separation of property regime as explained above in section I. part ii.
It should be noted that the transition to the separation of property regime may be possible not only by agreement but also by the decision of the judge. According to Article 206 of the TCC, in the presence of a just cause, the judge may, upon the request of one of the spouses, decide to convert the existing property regime to separation of property. The relevant article lists the cases that may be considered as just cause, but the judge may also accept the existence of another just cause other than these cases.
Is It Possible to Conclude a Retroactive Property Regime Agreement?
In the decision of the 8th Civil Chamber of the Court of Cassation numbered 2012/13166 E., it is ruled that the spouses cannot make an agreement to adopt another optional property regime other than the regime of participation in acquired property with retroactive effect. According to the relevant decision, "...When Article 10/I and III of Law No. 4722 are evaluated together, it is clear that the spouses can only choose the regime of participation in acquired property, which is the legal property regime, with retroactive effect. In other words, the spouses cannot choose and determine another optional property regime (one of the regimes of community of property, separation of property or separation of property with sharing) other than the regime of participation in acquired property with retroactive effect to be valid from the date of marriage. Therefore, even if there is such a determination, such a determination is null and void, and this restriction on public order cannot be overcome based on the rules of freedom of agreement...".
In Conclusion
Spouses who do not want to continue the legal property regime of participation in acquired property may switch to the separation of property regime within the scope of freedom of agreement. Property regime agreements can be made at any time within the limits set out in the Turkish Civil Code.
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.
