How to Discharge a Mortgage/hypothec?

Mortgage/hypothec discharge refers to the process of removing the mortgage/hypothec annotation from the land registry for a mortgaged/hypothecated immovable property. In legal literature, mortgage/hypothec discharge is also referred to as *ipoteğin fekki* or *ipoteğin terkini* (release or cancellation of mortgage/hypothec). The circumstances that terminate a mortgage/hypothec are as follows:

• Full payment of the debt secured by the mortgage/hypothec and the mortgagee/hypothecary creditor's release of the mortgage/hypothec.
• Invalidity of the claim: For example, if the contract giving rise to the claim was executed irregularly or fraudulently, or if the creditor and debtor are the same person.
• Termination of the claim: For example, if the claim has become time-barred.
• Invalidity of the mortgage/hypothec agreement: For example, if the mortgage/hypothec agreement was not made in written form or if the parties lacked legal capacity.
• Lack or restriction of the immovable property owner's power of disposition: For example, if the property owner is a minor or is under guardianship.
• Filing a lawsuit for the discharge of mortgage/hypothec and a court decision ordering the discharge of the mortgage/hypothec.

The mortgage/hypothec discharge process is generally carried out in two ways:

• Full payment of the debt secured by the mortgage/hypothec and the mortgagee/hypothecary creditor's release of the mortgage/hypothec: In this case, after the debtor fully repays their debt, they request the creditor (person or institution) to send a *mortgage/hypothec release letter* (*ipotek fek yazısı*) to the land registry. The *mortgage/hypothec release letter* is an official document stating that the mortgagee/hypothecary creditor has received full payment of the debt and consents to the discharge of the mortgage/hypothec. The debtor then applies to the land registry office, requesting the discharge of the mortgage/hypothec. The land registry office reviews the documents, decides on the discharge of the mortgage/hypothec, and removes the mortgage/hypothec annotation from the immovable property.
• Invalidity or termination of the mortgage/hypothec and filing a lawsuit for its discharge: In this case, if the debtor has paid their debt but the creditor (person or institution) has not released the mortgage/hypothec or provided a *mortgage/hypothec release letter*, the debtor may apply to the court, requesting the discharge of the mortgage/hypothec. In the lawsuit, the debtor is obliged to prove that the debt has been fully paid or that the mortgage/hypothec is invalid. If the court evaluates the evidence and decides on the discharge of the mortgage/hypothec, this decision is sent to the land registry office, and the mortgage/hypothec annotation on the immovable property is removed.

A mortgage/hypothec discharge lawsuit is a legal action filed to remove the mortgage/hypothec right from the land registry of a mortgaged/hypothecated immovable property. This lawsuit concludes successfully if the mortgagee/hypothecary creditor proves that the debt has been fully paid or that the mortgage/hypothec is invalid. If the mortgage/hypothec right registered in the land registry is invalid, the immovable property owner may request the correction of this situation from the secured creditor in whose name the irregular registration exists. If the secured creditor does not respond to the immovable property owner's request, the owner, whose *in rem* right has been harmed due to the irregular registration, may apply to the court. The conditions for a mortgage/hypothec discharge lawsuit are as follows:

• The plaintiff must be the owner of the mortgaged/hypothecated immovable property or the person who purchased the mortgaged/hypothecated immovable property. If the plaintiff is a different person from the mortgagee/hypothecary creditor, they must not be personally liable for the debt.
• The plaintiff must document that the secured claim is invalid or has terminated. For example, a receipt for full payment of the debt or a *mortgage/hypothec cancellation certificate* (*ipotek terkin belgesi*) issued by the creditor.
• The plaintiff must prove that the mortgage/hypothec agreement is invalid or that the immovable property owner lacked or had restricted power of disposition. For example, evidence that the mortgage/hypothec agreement was executed irregularly or fraudulently, or that the immovable property owner was a minor.

How is Mortgage/Hypothec Discharge Carried Out for Halkbank, Vakıfbank, and Ziraat Bank?

An application for mortgage/hypothec discharge is made to the bank branch where the loan was taken out or to a nearby branch of the same bank. The bank branch performs the necessary checks and scans the documents through its online system. Some banks demand payment under names such as "mortgage/hypothec discharge fee" in such situations. Such demands are unlawful. Nevertheless, if you wish to pay, the bank may provide you with information to make the payment using your IBAN number or Turkish ID details. Many banks send the necessary payment information for the mortgage/hypothec fee via message. The receipt or proof of payment for the mortgage/hypothec discharge fee is submitted to the loan's bank branch or can be seen through the system as paid. Subsequently, the bank electronically sends the *mortgage/hypothec release letter* (*ipotek fek yazısı*) to the land registry office.

Am I Obliged to Pay a Mortgage/Hypothec Discharge Fee?

If your bank requests you to pay a *mortgage/hypothec release letter* fee, you may refuse. If your bank insists on this payment, you can file a lawsuit for the discharge of the mortgage/hypothec without paying this fee. This is because banks are obliged to carry out mortgage/hypothec discharge procedures automatically upon the termination of a loan debt. There is no legal basis for banks to demand payment from consumers for a procedure that they are required to perform themselves. If the court rules for the discharge of the mortgage/hypothec, it will be discharged without you having to pay a *mortgage/hypothec release fee* to the bank.

Which Court Has Jurisdiction for a Mortgage/Hypothec Discharge Lawsuit?

As a rule, a mortgage/hypothec discharge lawsuit is filed in the civil court of first instance (*asliye hukuk mahkemesi*) located where the immovable property is situated. However, in some cases, the competent court may vary depending on the subject matter of the legal dispute. For example, while family courts may have jurisdiction in cases involving the discharge of a mortgage/hypothec on a family residence, consumer courts are competent if the dispute between the parties arises from a consumer transaction. If the case is of a commercial nature, the civil court of commerce (*asliye ticaret mahkemesi*) will be the competent court. If the lawsuit is filed in the wrong court, the process may be prolonged and become complicated. To prevent loss of rights, we strongly recommend seeking assistance from a real estate lawyer.

Is a Mortgage/Hypothec Discharge Lawsuit Subject to Mediation?

A mortgage/hypothec discharge lawsuit is a declaratory action and does not involve a claim for debt or compensation. Therefore, there is no mandatory mediation requirement for a mortgage/hypothec discharge lawsuit.

Who Bears the Court Fees in a Mortgage/Hypothec Discharge Lawsuit?

In a mortgage/hypothec discharge lawsuit, the litigation costs are initially borne by the plaintiff upon filing the lawsuit. However, if a decision is rendered in favor of the plaintiff as a result of the lawsuit, these litigation costs are imposed on the defendant. If the lawsuit is filed by a consumer, no court fees will be paid, as consumers are exempt from such fees.

Is There a Statute of Limitations for Mortgage/Hypothec Discharge?

A lawsuit for the discharge of mortgage/hypothec (*ipoteğin fekki*) is not subject to any statute of limitations. Therefore, a person wishing to remove an erroneously registered mortgage/hypothec on an immovable property can file this lawsuit, regardless of how much time has passed.

What Happens If I Cannot Repay a Home Loan Secured by a Mortgage/Hypothec?

If the debt on a mortgage/hypothec-backed loan is not repaid, banks can place an attachment (*haciz*) on any movable or immovable property registered in the customers' names that is sufficient to cover the loan amount. Banks will not permit the discharge of the mortgage/hypothec on the house until loan payments are completed, and in case of payment defaults, they can initiate enforcement proceedings by converting the mortgage/hypothec into money, thereby forcing the sale of the real estate.

How is Mortgage/Hypothec Discharge Performed via Web Tapu?

It is not possible to perform mortgage/hypothec discharge procedures directly through Web Tapu. However, you can check whether a mortgage/hypothec on a residence acquired with a loan has been discharged via the e-Devlet system after the application.

You can follow the steps below to track the mortgage/hypothec discharge process:

• Log in to e-Devlet with your Turkish ID details.
• Go to the relevant page by typing “Land Registry Information Inquiry” (*Tapu Bilgileri Sorgulama*) in the search box.
• On the page, you will find a list of immovable properties registered in your name.
• Click the “Details” button for the immovable property for which the mortgage/hypothec discharge application was made.
• On the opened page, you will see the property's information, and below it, there will be an option: “Click here for (annotation, declaration, pledge, usufruct, etc.) on your immovable property.”
• If the final page states “There is no annotation information for your immovable property,” it means the mortgage/hypothec on the residence has been discharged.

Court of Cassation Decisions on Mortgage/Hypothec Discharge Lawsuits

“The plaintiff's attorney asserted that a loan agreement was signed between their client and the defendant, a mortgage/hypothec was established on the plaintiff's immovable property as collateral due to the loan utilized, the loan debt was repaid early, and despite all expenses being covered by the plaintiff, the defendant stated that the mortgage/hypothec on the property could not be discharged on the grounds that the mortgage/hypothec release fee had not been paid, and therefore requested a decision for the discharge of the mortgage/hypothec on the property subject to the contract.... The court's decision to accept the case was upheld by our Chamber, and the plaintiff subsequently filed a request for rectification of the decision. Given that the plaintiff was found to be in the right as of the lawsuit filing date, an attorney's fee of 6.[Price Information Removed] should have been awarded in favor of the plaintiff; however, awarding an attorney's fee of [Price Information Removed] in favor of the plaintiff without considering these points is contrary to procedure and law and necessitates reversal.” (Court of Cassation, 13th Civil Chamber, 2015/7541 E. 2015/8461 K. 17/03/2015 T.)

Any questions you may have regarding mortgage/hypothec discharge lawsuits can be asked below.

Av. Mehmet Yücesoy

İzmir Attorney & Legal Consultancy