How Is the Sale Conducted in a Partition Lawsuit (İzale-i Şuyu)? The Occupancy-Permit Requirement and the Public-Auction Procedure

In real property registered in the name of more than one person, whether through inheritance or joint purchase (property subject to shared ownership), the most common remedy resorted to when a dispute arises among the co-owners is the partition lawsuit (ortaklığın giderilmesi / izale-i şuyu). However, the stage of this lawsuit that raises the most questions is how the property will be sold. In this article, we explain, in light of Court of Cassation decisions, the procedure by which the sale is carried out in a partition lawsuit and how the property's occupancy status (yapı kullanma izni / iskan) affects the process.

Summary of the Situation

Where the co-owners of property subject to shared ownership cannot reach agreement on use or sale, one of the co-owners may file a partition lawsuit. Mediation may first be attempted in this process; however, if the parties cannot reach agreement, the case proceeds to court. The court assesses whether the property can be physically divided; if division is not possible, it orders a sale. At this point two important questions arise: by what procedure will the sale be carried out, and how will the process proceed if the property lacks an occupancy permit?

The Legal Issue

In practice, the issues most frequently disputed among co-owners are:

• Will the sale be carried out by "sealed bid," by "negotiation," or by "public auction"?
• Can an agreement on the sale procedure be reached during mediation?
• If the property lacks an occupancy permit (yapı kullanma izin belgesi), can the court order a sale directly?

What Does the Court of Cassation Say?

The Basic Sale Procedure: Public Auction

According to Court of Cassation decisions, where partition of jointly owned real property cannot be achieved in kind, dissolution of the co-ownership by sale is ordered. In that case, the basic procedure for the sale is a "public auction."

• Numerous decisions have emphasized that the sale of the property must be carried out by way of "public auction open to all" (Court of Cassation, 14th Civil Chamber, E. 2016/8055, K. 2019/6233, 2019; Court of Cassation, 7th Civil Chamber, E. 2023/3678, K. 2024/2658, 2024; Court of Cassation, 20th Civil Chamber, E. 2019/2833, K. 2019/5068, 2019).
• The sale transactions are carried out under the provisions of the Enforcement and Bankruptcy Law (İİK), through a sales officer appointed by the court.
• None of the decisions examined contain any indication that the sale is to be carried out by a "sealed-bid procedure." On the contrary, a court decision ordering sale "by negotiation" or by a "closed" method is not upheld; it is instead held that the sale must be carried out through a general public auction (Court of Cassation, 14th Civil Chamber, E. 2016/8055, K. 2019/6233, 2019; Court of Cassation, 14th Civil Chamber, E. 2014/16213, K. 2016/2402, 2016).
• The sale may be conducted solely among the co-owners only where all co-owners consent, pursuant to the final paragraph of Article 699 of the Turkish Civil Code. If even a single co-owner does not consent, the sale must be conducted publicly (open to the public at large) (Court of Cassation, 6th Civil Chamber, E. 2012/17329, K. 2013/1050, 2013; Court of Cassation, 14th Civil Chamber, E. 2013/11090, K. 2013/11920, 2013).

The Sale Procedure Cannot Be Determined in Mediation

Where the parties fail to reach agreement during mediation, the matter proceeds to court. However, in its decision numbered E. 2024/1092, K. 2024/1275 (2024), the İzmir Regional Court of Appeal, 6th Civil Chamber, noted an important limitation: the parties cannot agree, during mediation, on the "sale of the property by public auction open to all"; this method is possible only through a court decision. In mediation, agreement can be reached only on partition of the property in kind, or on its sale to a specific person for a specific price.

Occupancy Status Is a Critical Obstacle to Sale

Whether the property has an occupancy permit, or is suitable for conversion to condominium ownership (kat mülkiyeti), is a matter the court must assess as a preliminary issue.

• Priority is given to condominium ownership: Before ordering a sale, the court must investigate whether the co-ownership can be dissolved by converting the property to condominium ownership. If the building is suitable for condominium ownership, the court cannot order a sale directly (Court of Cassation, 20th Civil Chamber, E. 2017/11086, K. 2018/1343, 2018).
• Time is granted to cure deficiencies: If the property lacks an occupancy permit, or if there are discrepancies from the approved project, the court must grant the parties time to cure these deficiencies and complete the conversion to condominium ownership (Court of Cassation, 20th Civil Chamber, E. 2019/2833, K. 2019/5068, 2019; Court of Cassation, 20th Civil Chamber, E. 2019/1769, K. 2019/3583, 2019).
• A sale decision is issued at the end of the period: If, despite the time granted, the occupancy permit cannot be obtained, compliance with the project cannot be achieved, or conversion to condominium ownership is not possible, the court orders dissolution of the co-ownership "by sale" (Court of Cassation, 20th Civil Chamber, E. 2019/2450, K. 2019/4655, 2019).

Points to Watch

• Identify any missing occupancy permit before filing suit. If the property lacks its occupancy permit, this can significantly prolong the litigation process. Where possible, it should be investigated before filing suit whether this document can be obtained from the relevant municipality or special provincial administration.
• Assess the possibility of conversion to condominium ownership. If it is possible to establish condominium ownership in a way that allocates an independent unit to each co-owner, this may be a more advantageous solution than a sale.
• Seek a realistic settlement in mediation. Since the public-auction procedure cannot be agreed upon in mediation, settlement can only be reached through partition in kind or sale to a specific co-owner at a specific price.
• Know your right to object to the sale procedure. A court decision ordering a sale by sealed bid or negotiation is unlawful; such a decision can be reviewed through an appeal to the regional court of appeal or the Court of Cassation.

Conclusion: What Should You Do?

In a partition lawsuit, if the property cannot be divided in kind, a sale is ordered, and as a rule this sale is carried out, under the provisions of the Enforcement and Bankruptcy Law, by public auction open to all; a sealed-bid or negotiated sale procedure is not lawful. In addition, before ordering a sale, the court must investigate whether the co-ownership can be dissolved by converting the property to condominium ownership; if there is a missing occupancy permit, the parties must be given the opportunity to cure that deficiency.

Disputes arising from shared ownership are sensitive processes that directly affect the value of the property and the rights of the co-owners. We recommend obtaining support from a real estate law attorney to manage the process as efficiently as possible and to correctly assess technical matters such as the occupancy permit and condominium ownership.