The Constitutional Court (AYM) has annulled an important regulation regarding the exercise of the right of first refusal in shared real estate. The High Court found that the provision, which stipulated that the price to be paid by a shareholder wishing to exercise the right of first refusal upon the sale of a share to a third party should be determined by the court based on fair market value, was unconstitutional.
The decision has opened a new area of debate regarding the right of first refusal, which comes into play when a share is sold in real estate owned by multiple people. The right of first refusal grants other shareholders the opportunity to purchase the same share with priority if one of the shareholders sells their share to a third party.
The regulation evaluated by the Constitutional Court had entered into force in 2025 with the amendment made to Article 734 of the Turkish Civil Code via Law No. 7571. According to this, instead of the sale price agreed upon by the buyer and seller in the contract, the fair market value of the real estate share could be taken as a basis; this value was determined by the court.
The regulation was brought to the Constitutional Court's agenda following objections in various cases and an application by the Republican People's Party (CHP). Examining applications from 13 separate civil courts of first instance, the Court concluded that the rule could create problems regarding property rights.
The decision stated that replacing the price determined by the parties' free will in the sales contract with another amount could, in some cases, lead to financial loss for the buyer or debates over unfair gain. Furthermore, it was assessed that the price could become uncertain for the shareholder wishing to exercise the right of first refusal.
DECISION TO TAKE EFFECT IN 2027
The Constitutional Court decided that the annulment provision would take effect nine months after its publication in the Official Gazette. Since the decision was published in the Official Gazette dated November 6, 2026, the annulment provision will enter into force on August 6, 2027.
The current practice will remain in effect until this date. Therefore, the publication of the decision does not mean that all ongoing right of first refusal cases will automatically revert to the old system.
Along with some provisions related to the fair market value rule, the Constitutional Court also annulled the transitional provision that stipulated the regulation's application to previously filed cases. It is possible for the Grand National Assembly of Turkey (TBMM) to make a new legal arrangement before the date the annulment decision takes effect.
How ongoing cases will be affected will be determined according to the legislation in force on August 6, 2027, and the specific legal status of each file. New regulations that may be made during the process are important for shareholders planning to sell shared real estate or those involved in a right of first refusal lawsuit.
News Source: 12punto
