

A foreign buyer agrees to pay for Turkish property in euros or dollars and an exchange-rate dispute arises. Learn how payment clauses, Turkish lira conversion, deposits, title transfer and damages may be handled.
Foreign buyers purchasing real estate in Turkey frequently negotiate the commercial value of a property by reference to euros or US dollars. Problems can arise when the exchange rate changes substantially between signing the reservation agreement, preliminary sale agreement and completion of the title transfer. A dispute may then develop over which currency must actually be paid, which exchange rate applies, which date controls the conversion and whether one party can demand additional money because the Turkish lira has lost value. The answer depends heavily on the wording of the agreement, the legal nature of the transaction, applicable mandatory rules and the parties’ actual payment history.
The most common problem is timing. The parties may agree on the commercial value of the property months before title transfer. During that period, the value of the euro or dollar against the Turkish lira can change substantially.
If the contract does not clearly allocate this risk, each side may interpret the transaction differently.
The first step is to collect every document showing how the price was agreed. These may include the reservation agreement, preliminary sale agreement, deposit receipt, bank transfer records, invoices, correspondence, payment schedule and title-transfer documents.
The wording used in those records can become decisive.
A contract stating a fixed Turkish lira price presents a different issue from a transaction whose price was legally and validly determined by reference to euros or dollars.
The buyer should therefore establish whether foreign currency was merely used for negotiation or formed part of the legally enforceable payment arrangement.
Parties should not assume that every Turkish property transaction can freely be denominated and performed in foreign currency merely because the buyer is foreign.
Turkey has foreign-currency contracting restrictions and exceptions that can depend on the parties and transaction. The particular contract must therefore be reviewed under the rules applicable when it was concluded and performed.
The nationality or residence status of a foreign buyer may become relevant when determining whether a particular foreign-currency arrangement falls within an applicable exception.
This should be checked rather than assuming that the same rule applies to every domestic and foreign purchaser.
If a legally valid agreement clearly fixes the purchase price at EUR 300,000, a later movement in the euro/Turkish lira rate does not by itself rewrite the agreed euro amount.
However, the manner in which the payment must legally be performed and documented in Turkey should still be examined separately.
This is a common source of litigation.
For example, a contract might mention EUR 300,000 and also record a Turkish lira equivalent. The question then becomes whether the Turkish lira figure was merely informational or whether it was intended to fix the final payable amount.
The entire contract and surrounding evidence should be reviewed.
There is no safe universal answer for every property transaction. The relevant rate can depend on the contractual wording and applicable legal framework.
Possible disputes may concern the rate on the contract date, payment date, title-transfer date or another expressly agreed date.
Well-drafted agreements should specify how any necessary conversion will be calculated.
A vague statement such as “converted at the current exchange rate” can create disagreement about the date, applicable buying or selling rate and other calculation details.
Where the contract links conversion to payment, determine when payment legally occurred.
The date a buyer instructed an international transfer may differ from the date funds reached the recipient’s account.
Correspondent-bank delays, compliance screening and banking cut-off times can cause funds to arrive later than expected.
The contract should therefore be examined to determine whether timely initiation or actual receipt constitutes performance.
A buyer may send the exact agreed foreign-currency amount but intermediary fees can reduce the amount ultimately received by the seller.
Payment instructions should specify who bears transfer and correspondent-bank charges.
Suppose a foreign buyer pays EUR 30,000 as a deposit and the transaction later fails.
The parties may dispute whether the buyer is entitled to EUR 30,000, the Turkish lira originally paid, or another amount calculated at a later exchange rate.
The answer depends on the agreement, payment method and legal basis for repayment.
Foreign purchasers sometimes transfer money before receiving a detailed sale agreement.
If the transaction fails, the developer or seller may characterize the payment differently from the buyer. Preserve the reservation form, transfer description and correspondence explaining why the money was paid.
A seller cannot automatically rewrite an agreed purchase price merely because exchange rates have changed.
The legal position depends on the existing agreement and applicable mandatory rules. The buyer should request a written explanation of the contractual basis for the additional demand.
If a developer suddenly demands a substantial exchange-rate adjustment shortly before completion, obtain a written calculation first.
Determine the contractual clause, exchange rate, date and mathematical method relied upon.
Preserve the payment evidence and the seller’s calculation.
Depending on the circumstances, the buyer may need to examine whether an overpayment can be recovered.
Foreign buyers purchasing new developments frequently pay over several months or years.
A well-drafted installment agreement should state the currency, installment amount, due date, conversion mechanism and consequences of late payment.
If the buyer fails to pay an installment when due and the exchange rate moves substantially afterward, the seller may argue that losses resulted from the buyer’s delay.
Contractual default provisions, interest and applicable damages rules should be reviewed separately.
The reverse problem can also occur.
A buyer may have been ready to complete the transaction, but the seller delays title transfer while the currency moves sharply.
Evidence showing the buyer’s readiness to perform can become important.
Bank statements, transfer instructions and written requests for completion can help establish that the buyer was financially ready to perform at the relevant time.
Property negotiations frequently occur through brokers and messaging applications.
Messages discussing the agreed euro or dollar price, conversion method and final balance may become relevant evidence if the formal documents are ambiguous.
A broker may tell the buyer that a particular exchange rate will be used. The legal effect of that statement depends on the broker’s authority and the surrounding circumstances.
Do not rely exclusively on oral promises from an intermediary.
Any material change to the price or conversion method should be documented directly with the legally relevant contracting party.
This is particularly important before transferring substantial funds.
A purchase from a large development company can involve contracts, invoices and payment schedules that differ significantly from a private resale transaction.
The legal analysis should therefore begin with the actual transaction structure.
The amount and information recorded during the title-transfer process should be examined together with the underlying sale documents and actual payment records.
The buyer should avoid inconsistencies that may create separate tax or evidentiary problems.
Foreign buyers should not agree to inaccurate documentation merely to reduce transaction costs.
If the actual payment and recorded transaction values conflict substantially, later litigation can become more complicated.
Property purchases used for citizenship purposes can involve additional valuation and payment requirements.
Exchange-rate disputes should therefore be considered together with the rules applicable to the citizenship investment, bank transfers and official valuation process.
If one party unlawfully prevents completion and currency movements cause measurable financial loss, exchange-rate consequences may become relevant to a damages analysis.
Recovery is not automatic. The claimant must establish the legal basis, actual loss and causal connection.
A buyer should distinguish direct currency loss from speculative claims that the property would have increased in value or generated investment profits.
Evidence requirements can differ substantially.
Depending on the contract and transaction structure, the buyer may need to consider claims concerning performance, repayment, contractual remedies, damages or protective measures affecting the property.
The precise remedy depends on whether the buyer has a legally enforceable right to demand transfer.
If there is a serious risk that the seller will transfer the property to another person while the dispute continues, urgent legal measures may need to be evaluated.
Timing can be critical.
The buyer should obtain current title records and determine when the later transaction occurred.
The available remedies can depend heavily on the legal status of the original agreement and circumstances surrounding the subsequent transfer.
Potentially, depending on the legal nature of the payment and contractual arrangement.
The analysis should determine what obligation is being reversed and how repayment should be calculated under the applicable rules.
If the buyer maintains that the obligation was genuinely foreign-currency based, repayment of only a historical Turkish lira amount may create a substantial dispute after depreciation.
The original agreement and payment evidence should be analyzed before accepting the calculation.
Foreign-currency ambiguity creates risks for sellers as well.
Developers selling to international buyers should use consistent price, payment and conversion clauses across reservation forms, contracts, invoices and payment schedules.
A reservation agreement stating euros, an invoice stating Turkish lira and later correspondence using dollars can make enforcement significantly more difficult.
Documents should describe the same commercial transaction consistently.
Before the final title transfer, prepare a schedule showing the agreed price, every amount already paid, currency of each payment, date, applicable conversion if relevant and remaining balance.
Any discrepancy should be resolved before closing.
Keep the signed agreement, reservation documents, payment schedule, bank receipts, SWIFT records, invoices, title records, valuation documents, broker correspondence and messages concerning price or exchange rates.
Foreign-language documents should also be retained in their original form.
The buyer should immediately stop relying on oral calculations and reconstruct the transaction from documentary evidence. Identify the agreed currency, determine whether the foreign-currency arrangement is legally permissible, identify any contractual conversion clause, establish the relevant payment dates, calculate all amounts already paid and request the seller’s disputed calculation in writing.
If title transfer is imminent, the buyer should also determine whether the dispute threatens completion and whether protective legal action is necessary.
Foreign-currency arrangements are subject to Turkish rules concerning foreign-currency contracts and applicable exceptions. The particular parties and transaction should be reviewed before assuming that any foreign-currency structure is permissible.
It depends on the contract and applicable legal framework. The agreement should ideally specify the relevant date and conversion mechanism.
Not automatically. The seller must have a contractual or legal basis for the additional demand.
The agreement must be interpreted to determine which amount was intended to be controlling and whether the Turkish lira figure represented a fixed price or merely a conversion.
Messages may become relevant evidence depending on the circumstances, particularly where they clarify negotiations or disputed contractual terms.
Preserve evidence showing when the buyer was ready to perform and why completion was delayed. The delay may become relevant to contractual liability and damages.
Potentially, depending on the legal basis, breach, causation and evidence of actual loss.
Potentially. The repayment method depends on the nature of the payment, contractual terms and applicable legal rules.
Request the contractual basis and detailed calculation in writing before making an additional payment.
Prepare a complete payment reconciliation showing the contractual price, currency, all previous payments, relevant conversion calculations and remaining balance. Any exchange-rate disagreement should ideally be resolved in writing before title transfer.
Foreign-currency disputes in Turkish real estate transactions can involve euro or dollar purchase prices, exchange-rate calculations, deposits, installment payments, delayed title transfers, developer disputes, repayment claims and substantial financial losses. Fırat Fesih Kaya Law Office assists foreign property buyers and international investors facing payment and real estate disputes in Turkey. Lawyer Fırat Fesih Kaya provides legal assistance in reviewing property sale agreements, reconstructing foreign-currency payments, challenging additional payment demands, pursuing deposit and overpayment claims, protecting buyers during title disputes and evaluating litigation or urgent protective measures where completion is threatened.
Phone:
+90 312 434 22 22
Mobile:
+90 532 769 22 22
Email:
info@firatfesihkaya.av.tr
Address:
Mevlana Boulevard No:221, Yıldırım Tower, Office No:148
06520 Balgat, Çankaya, Ankara, Turkey