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MEMORANDUM ON THE LAW REGARDING THE AMENDMENTS ON THE ENFORCEMENT AND BANKRUPTCY LAW NUMBERED 7343 AND OTHER LAWS *

Atty. Ramazan AKINCI & Legal Intern Gizem KOPYA *

In this memorandum, the comprehensive amendments to the Enforcement and Bankruptcy Law dated 09/06/1932 and numbered 2004 (hereinafter referred to as “Law”) with The Law Regarding The Amendments On The Enforcement And Bankruptcy Law Numbered 7343 And Other Laws have been evaluated by considering their order in the Law that constitutes the basis for the amendment.

ESTABLISHMENT OF THE CHIEF ENFORCEMENT DIRECTORATE

With the amendment to the Article 1 of the Law; it has been regulated that in the enforcement offices where the workload or the number of personnel is high, a chief enforcement director with the powers of an enforcement director may be appointed by the Ministry of Justice among the enforcement directors and assistant directors in order to ensure the regular, harmonious and efficient operation of the office. Although the enforcement director, enforcement assistant and enforcement secretary were mentioned as a personnel in the enforcement offices in the first state of the Law, with the amendment; it is stated that a chief enforcement director may be appointed and that the procedures and principles related to the before mentioned will be regulated with by a regulation.

ESTABLISHMENT OF THE HEAD OF THE ENFORCEMENT OFFICESS

With the amendments to the Articles 2, 3 and 4; it is stated that the administrative procedures of the Enforcement and Bankruptcy Offices will be carried out by the Head of the Enforcement Offices. Despite the fact that the Enforcement Courts are the administrative chief of the Enforcement and Bankruptcy Offices, with the aforementioned amendment, the administrative procedures of the Enforcement and Bankruptcy Offices were left to the Head of the Enforcement Offices in places where the Head of the Enforcement Offices were established.

IN REGARDS TO DECISION OF POSTPONEMENT OF EXECUTION

Although the decision of postponement of execution was requested from the authority which was sent to review the decision in the repealed law, it has been decided that this request will be directed to the enforcement court with the amendment to Article 5 of the Law. However, it would not be appropriate to leave the decision of postponement of execution to the enforcement court, which is not authorized for examining the merits of the disputed case file.

In case the application for appeal is definitively rejected by the Regional Court of Justice, it has been clearly decided that the amount of money subject to the guarantee will be paid upon the request of the creditor. In addition, if the decision made by the Regional Court of Justice is subject to appeal, the decision to postpone the enforcement until the appeal period will continue to exist.

IN REGRDS TO APPRAISAL

With the amendment to the Article 87; while the officer could directly make the appraisal of the goods that are not registered, it can be requested from the legal experts to make an appraisal if needed. The appraisal of the goods registered will be exclusively made by the legal experts. This regulation is quite appropriate since the values of the goods registered are generally high and it involves leaving the appraisal of these goods only to legal experts in order to prevent the parties’ any possible loss of rights.

With the amendment to the Article 88; without prejudice to the provisions of Article 106 of the Law regarding registered motor vehicles, the seized goods will be kept or made ready for the tenderer.

THE CLAIM OF RATION OF THE THIRD PARTIES

With the amendment to the Article 97/a; in case the third party claims rights on the seized property and accepts the trusteeship, the said property will not be preserved until the decision to continue the enforcement proceedings is made by the Court.

REQUEST OF SALE AND COSTS

With the amendment to the Article 106; the distinction between movable and immovable property has been abolished and the request of seizure period for all goods has been amended to 1 (one) year. In the case that the seized property cannot be sold in the bidding, the creditor is given an extra year to request a sale.

In case of a sale request, it is regulated that the appraisal advance and all sales expenses are paid in advance in line with the tariff that is determined by the Ministry of Justice every year, in case of incomplete costs or advances, the missing expense/advance should be paid within 15 days upon the enforcement officer decision, otherwise the sale request will not be valid.

COMMITMENT TO PAY:

With the amendment to the Article 111; a special arrangement has been made in accordance with the Stamp Tax Law Numbered 488 that the documents related to the commitment to pay will be exempted from the stamp duty.

GRANTING THE DEBTOR THE RIGHT TO SELL:

With the addition of the Article 111/a; the debtor is given the power to make an appraisal of the attached property and to ask for the sale of the property. In this case, it will be possible to sell the attached property either with 90% of the appraisal price or the subscription price, whichever is higher and not less than the determined price and the total of the expenses incurred from the requested sale’s case. Whether this sale to be made externally by the debtor, fulfills the conditions sought in the law, must be approved by the enforcement court. This addition is very appropriate since it is aimed to conclude the procedures in a shorter time and to make less expense by granting the debtor the right to sell the attached property.


ELECTRONIC AUCTION SALES

With the addition of to the Article 111/b; it has been decided that all physical auctions are removed and all the auctions from now on will be made electronically. In addition, in accordance with the Turkish Civil Code, the ownership of the sold property will be transferred to the buyer in the ending date of the auction. The form of the sales announcement and whether it will be made with the newspaper will be determined by the executive officer in line with the interests of the parties. In addition, it has been regulated that 10% of the estimated value of the properties to be sold will be deposited from those who want to participate in the sale.

OBJECTION TO THE APPRAISAL REPORT

With the amendment to the article 128/a; if the complaint regarding the appraisal is made to the unauthorized Enforcement Court, the Court will make a decision of non-jurisdiction over the case and send the case file to the authorized Enforcement Court without any request. Thus, malicious requests for prolongation of the finalization of the appraisal report and of the sales procedures will be prevented.

PAYMENT OF THE TENDER FEE AND TERMINATION OF THE TENDER

With the amendment to the Article 118; even if a lawsuit for termination of the tender is filed, the tenderer will have to pay the tender price within seven days from the announcement of the auction report, and the sold goods will be delivered to the tenderer and registration procedures will be carried out with the finalization of the tender.

With the amendment to the Article 134; upon the request of the tenderer, a memorandum will be sent to the person using the immovable that is sold, stating that he/she shall pay the monthly usage fee determined by the legal expert to the enforcement office, otherwise it will be collected from him/her by compulsory enforcement.

Those who want to file suit for the termination of the tender; the creditors who want the sale, debtors, registered persons and limited right in rem holders’ will pay the fixed fees, other than those mentioned will pay proportional fees and pay 5% of the tender. If the termination of the tender request is rejected due to procedural grounds, this decision could be made over the related case. In the event that a lawsuit is filed for termination of the tender by someone other than the creditor, debtor, registered persons and limited right in rem holders’ who requests the sale; a fine of 10% of the tender price will be imposed if the lawsuit is waived or the lawsuit is dismissed. In addition, the tender price will not be paid to the creditor before the tender is finalized and the subject matter of the tender is not delivered to the buyer/made ready for delivery. The person who bought the immovable property from the buyer is also granted the privilege of evacuating the person/s in the immovable.

PAYMENT FOR THE GUARANTEE

With the amendment to the article 142/a; the person who appears as a creditor in the list of creditors will be able to submit the final and indefinite bank letter of guarantee to the enforcement case file and request the payment of the receivable written in the list of creditors.

REGULATION ON THE ENFORCEMENT DATE OF THE LAW

Regulation on the implementation of article 111/b on sales through electronic auction, the tariff to be determined annually by the Ministry of Justice for the appraisal advance and all sales costs, in case of a sale is requested, will be regulated within six months from the effective date of the Law establishing this article. Articles 87, 88, 106, 110, 111/b, 114, 115, 118, 124, 126, 127, 129, 130, 133, 242 and 244 and the ninth and tenth paragraphs of Article 134, the implementation of the amendments begins in the provinces or districts determined by the Ministry of Justice, from the date of entry into force of the regulation on the implementation of Article 111/b, and these changes will be implemented throughout the country within a year at the latest. The provinces and districts chosen will be announced on the official website of the Ministry of Justice

It has been decided that the Law will enter into force as of 30/11/2021, the date of publication. However, by making an exception to this rule, it has been decided that the amendments to the above articles will be implemented as of the effective date of the regulation to be issued by the Ministry of Justice. Until the aforementioned regulation comes into force, the provisions of the abrogated law will be applied in cases where the regulation is referred.

Respectfully submitted. 14/12/2021

Yüksel / Yerkel & Partners Law Office

Yol Tarifi