I. WHAT IS USUFRUCT RIGHT?
The usufruct right is a right of easement (irtifak hakki) that grants the broadest utilisation authorisation among the limited real rights (aynî hak). It is regulated in detail between Articles 794 and 822 of the Turkish Civil Code numbered 4721 ('Civil Code'). When we examine the relevant provisions, usufruct right may be established on movable or immovable rights. Unless otherwise agreed by the parties, the usufructuary may fully use the subject matter of the right, as well as benefit from its natural and legal products (Civil Code, Article 794).
It should be noted that with the establishment of the usufruct right, the owner retains the intrinsic value of the property or right but allocates the benefits that can be obtained from them to a certain person.1 The usufructuary shall be authorised to use and benefit from the movable or immovable which is subjected to usufruct but the owner of the movable or immovable which is subjected to usufruct right shall only have the 'bare ownership'.2 Therefore, the holder of the bare ownership of the movable or immovable will be deprived of using it as he/she see fits.
The usufructuary also has possession of the property. Therefore, the usufructuary may also exercise the same rights of litigation as the owner. For example, in case of unjust occupation, the usufructuary has the right to file lawsuits such as prevention of seizure or adequate pay (ecrimisil).3 At the same time, the usufructuary may transfer the use of the usufruct right to another person, unless otherwise provided in the agreement or if it is not understood from the circumstances that the usufruct right should be used personally; in this case, the owner may assert his rights directly against the transferee (Civil Code, Article 806). Therefore, in practice, in order to prevent the use of usufruct right by someone else, it should be stated in the agreement that this right is granted exclusively to the person.
II. SUBJECT OF USUFRUCT RIGHT
Although real rights can only be established on goods, the subject of usufruct right is quite broad. According to the relevant provision, the subject matter of the usufruct right may be all kinds of movable and immovable property, as well as an entire asset. In this respect, a certain amount of money, all kinds of movable assets, etc. may constitute the subject of usufruct right. The usufruct right established on immovable shall also cover the integral part and the accessory unless otherwise agreed. In addition, the rights of passage and resource easement established in favour of immovable property may also be included in this scope.
III. ESTABLISHMENT OF USUFRUCT RIGHT
The establishment of usufruct right is subject to different requirement as to form according to the subject matter. According to Article 795 of the Civil Code, the usufruct right is established for: a) movables by transfer of possession; b) receivables by transfer of receivables; and c) immovables by registration in the land registry. As can be seen, there are different methods.
a. Establishment of usufruct right in movable and immovable
In the acquisiton and registration of usufruct rights in movables and immovables, the provisions regarding ownership shall apply, unless otherwise stipulated (Civil Code, Article 795/2). As it is understood from the provision, the existence of a valid reason for acquisition (contract, law, court decision, etc.) is required for the establishment of usufruct right. In general, usufruct rights are always established by contract, except for statutory usufruct rights.
For movables, usufruct right is established by the transfer of the possession of movable to the usufructuary upon the conclusion of the contract (in other words, contract + transfer of possession). However, unlike immovables, contracts that impose an obligation to establish usufruct rights shall not be subject to any requirement as to form whatsoever in terms of validity, unless otherwise stipulated.
All rights of easement and usufruct rights established on immovables are subject to formal form (Land Registry Law, Article 26/I). The formal form (resmî senet) means an agreement concluded before the land registry director authorised to issue the agreement and approved by the parties and the director with signature and seal.4 Therefore, usufruct right cannot be established on immovable with an ordinary written agreement. This right is registered in the land registry and thus becomes binding on the owners. As it is known, real rights arise upon registration in the land registry (Civil Code, Article 1022/1). Therefore, real rights whose establishment are legally subject to registration, cannot come into existence unless they are registered (Civil Code, Article 1021/1). In other words, a right cannot acquire the character of a real right unless it is registered.5 This process is explained in detail (Land Registry Regulation, Article 30). In addition, in practice, some documents are requested for the registration.6
b. Establishment of usufruct rights on share certificates
Another important issue in the scope of movables is share certificates, which are a type of commercial papers. The usufruct right on share certificates may be established for legal or contractual reasons.7 Since the document from which the right arises in share certificates is a movable, the provisions of the Civil Code regulating the usufruct right in respect of movables may be applied to the usufruct right on share certificates, which is a commercial paper.
In this context, in order to establish the usufruct right, the right which is subject to the usufruct right must be transferable in accordance with Article 795 of the Civil Code. For this reason, in order to establish usufruct rights on commercial paper, the possession of the commercial paper must be transferable.
IV. TERMINATION OF USUFRUCT RIGHT
The usufruct right expires with the complete extinction of its subject matter and the cancellation of the registration in immovable; the statutory usufruct rights expire with the disappearance of its cause. Other reasons for termination, such as the expiration of the term or the renunciation or death of the holder of right, allow the owner in immovables to request abandonment (Civil Code, Article 796). As can be seen, usufruct right may terminate due to reasons such as 'extinction of the subject matter', 'expiry of the term', 'death or cessation of personality of the holder of right' under the Civil Code.
Regarding the duration of the usufruct right, a distinction is made between natural and legal persons. Accordingly, if the usufructuary is a natural person, the usufruct right shall expire upon the death of the holder of right. If the usufructuary is a legal person, the usufruct right shall expire within the period agreed upon by the parties, or if no period has been agreed upon by the parties, upon the disappearance of the legal entity; however, in any case, the usufruct right of legal persons shall not exceed one hundred years (Civil Code, Article 797).
Based on the foregoing, the usufruct right shall expire upon the death of the usufructuary, unless the term of the usufruct right is limited by the contract, in which case it shall not be transferred to the heirs since it is a personal right.8 Since the death of usufructuary or the duration of the usufruct right does not automatically remove the usufruct right in the land registry, an application must be made to the land registry directorate for cancellation. In practice, this process is usually carried out by applying through the official web site of the Directorate of Land Registry and Cadastre. Then, the record related to the usufruct right to be cancelled shall be crossed out with a red ink pen and the phrase 'cancelled' shall be written on the line below it with a red ink pen again (Land Registry Regulation, Article 70).
In the cancellation of the usufruct right established on registered share certificates, it will be necessary to refer to the provisions of the Turkish Commercial Code numbered 6102 ('Commercial Code') on commercial papers. For commercial papers (e.g., registered share certificates), the provisions relating to policy (poliçe) shall apply to the form of endorsement and the rights and the obligations of the bearer (Commercial Code, Article 831). In practice, as can be seen in the decisions of the Court of Cassation, the termination of the endorsement is realised as 'cancellation of endorsement', 'cancelled' and 'invalid'.9 Crossing out the endorsement means the cancellation of the endorsement on the commercial paper, in other words, making it legally invalid. Therefore, in the event that the usufruct right is cancelled after the possession of the registered share certificates, the parties shall make a record on the registered share certificates which states that the 'usufruct endorsement' has ended. The possession shall be transferred to the party having the bare ownership. Because the endorsement is a legal transaction for transferring the right arising from the deed, and the crossing out the endorsement will cancel the endorsement and all the legal consequences attached to it will disappear.10 However, since this transaction will not be effective for third parties, the parties must also request the board of directors to take a decision to delete the usufruct right from the share ledger. This is because the share ledger is a commercial ledger that enables the beneficial owner to be recognised by the joint stock company.
V. CONCLUSION
Unless otherwise regulated, usufruct right authorises the owner to make full use of the subject matter. It is established by transfer of possession in movables and by registration in immovables. In immovables, registration is usually made by a formal agreement with the participation of the authorised land registry director. In the case of registered share certificates, the usufruct right is established by endorsement given for usufruct right and transfer of possession of the share certificate, if the share certificate is printed. The articles of association of the company may stipulate that usufruct rights may be established on registered share certificates only with the approval of the company. After the usufruct right is established on a registered share certificate, it must be registered in the share ledger of the company in order to be recognised by the joint stock company. The usufruct right in immovables may be cancelled upon the request of the owner from the land registry in cases such as the death of the person or the expiry of the term. In the case of registered share certificates, it is realised by crossing out the endorsement given for usufruct right, delivery of the possession to the owner and a decision to be taken by the board of directors to delete it from the share ledger.
Footnotes
1. HGK., 2017/2641 E., 2021/411 K., T. 6.4.2021.
2. Halûk Nami Nomer ve Mehmet Serkan Ergüne, (2022), "Esya Hukuku", 9. Basi, Istanbul: On Iki Levha Yayincilik, s. 547.
3. 14. HD., 2016/16134 E., 2019/2338 K., T. 14.3.2019.
4. 14. HD., E. 2008/2673, K. 2008/3703, T. 21.03.2008; Land Registry Law, 26/1.
5. HGK., E. 2017/2641, K. 2021/411, T. 6.4.2021.
6. Identity document, power of attorney, photograph if real person, compulsory earthquake insurance, property declaration value declaration, see Tapu ve Kadastro Müdürlügü, (2014), "Intifa Hakki Tesisi", (ulasmak için: file:///C:/Users/Sakarlegal/Downloads/intifa_hakki_tesisi%20(1).pdf ).
7. Arzu Oguz, (1991), "Pay Senetleri Üzerinde Intifa Hakki Kurulmasi ve Intifa Hakkinin Kapsami", Ankara Barosu Dergisi, Cilt 48, Sayi 1, s. 24.
8. Seref Ertas, (2021), "Esya Hukuku", 16. baski, Izmir: Baris Yayinlar Fakülteler Kitabevi, s. 541.
9. 19. HD., E. 2014/4959, K. 2014/7936, T. 24.04.2014; 19. HD., E. 2013/16589, K. 2014/1533, T. 20.01.2014.
10. Kadir Bas, (2020), "Kambiyo Senetlerinde Çizilmis Cironun Hüküm ve Sonuçlari", Marmara Üniversitesi Hukuk Fakültesi Hukuk Arastirmalari Dergisi, Cilt 26, Sayi 1, s. 282.
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.