Foreign Company Acquires a Business With Real Estate in Turkey: Hidden Property Liabilities to Check – 2026 Updated Guide

Foreign companies acquiring a business with real estate in Turkey should investigate title, mortgages, zoning, permits, tenants, taxes, environmental risks and hidden property liabilities before closing.

Acquiring a business that owns real estate in Turkey can provide a foreign company with valuable offices, factories, warehouses, hotels, shops or development land. However, the real estate may also carry hidden liabilities that are not immediately visible during a company acquisition.

The most serious risks may involve title restrictions, mortgages, unauthorized construction, zoning violations, environmental contamination, tenant claims, unpaid taxes, public restrictions, building defects and unresolved litigation.

A foreign buyer should not assume that acquiring the company automatically means acquiring clean and unrestricted real estate. This 2026 updated guide explains the property-related risks that should be checked before closing.

Share Purchase or Asset Purchase?

The first question is whether the foreign company is acquiring the shares of the business or purchasing selected assets.

Share Acquisition

In a share acquisition, the company remains the owner of the real estate, but the buyer acquires the company together with its historic liabilities. These may include:

• Property tax debts;
• Mortgages and attachments;
• Tenant claims;
• Environmental obligations;
• Construction violations;
• Pending lawsuits;
• Unpaid service charges;
• Public penalties;
• Undisclosed guarantees;
• Related-party property transactions.

The buyer should conduct due diligence on both the company and every property owned or used by it.

Asset Acquisition

In an asset purchase, the foreign buyer may acquire the property directly or acquire selected business assets. This may allow the buyer to exclude certain corporate liabilities, but property-related obligations can still create risks after closing.

The purchase agreement should clearly define the assets, liabilities, leases, permits, employees, equipment and claims being transferred.

Hidden Property Liabilities to Check Before Closing

1. Confirm the Company’s Ownership

Obtain current title records for every property owned by the target company. Confirm that the company is the registered owner of the land, buildings, independent units, parking spaces and other assets included in the transaction.

2. Review the Chain of Title

Examine how the company acquired each property. Previous inheritance, merger, partition, sale, donation or corporate restructuring may create unresolved ownership issues.

3. Check Mortgages and Bank Security

Determine whether any property is subject to a mortgage, pledge, bank restriction or financing arrangement. The purchase agreement should identify the responsible party and require release where necessary.

4. Search for Attachments and Enforcement Files

Properties may be subject to enforcement attachments, court injunctions or creditor claims. These restrictions may affect the buyer’s ability to sell, finance, develop or use the property.

5. Investigate Title Annotations

Review title annotations involving leases, sale promises, easements, pre-emption rights, family claims, public restrictions, development obligations and third-party rights.

6. Verify Co-Ownership

If a property is jointly owned, confirm that the target company has authority over its share and that no co-owner can challenge the proposed transaction.

7. Confirm Foreign Ownership Eligibility

The foreign buyer should verify that its corporate structure can hold the relevant land or buildings. Restrictions may depend on ownership structure, location, land type, business activity and security considerations.

8. Check Zoning Classification

The buyer should determine whether each property is zoned for its actual use. An office, factory, hotel, warehouse or retail property may not be legally approved for the activity currently carried out there.

9. Review Construction Permits

Obtain original construction permits, amendments, approved plans and technical records. Missing or inconsistent documents may affect value, insurance, financing and lawful operation.

10. Confirm Occupancy Authorization

A building may have been constructed without completing all requirements for lawful occupation or use. The buyer should confirm whether the relevant occupancy authorization exists and covers the actual building.

11. Compare Approved Plans With Existing Structures

A technical inspection should compare the official plans with the property as it exists. Hidden problems may include:

• Additional floors;
• Enclosed terraces;
• Unapproved storage areas;
• Unauthorized extensions;
• Converted common areas;
• Unregistered technical rooms;
• Altered entrances;
• Unapproved parking structures.

12. Investigate Zoning Violations

Zoning violations may lead to administrative orders, fines, demolition risks, use restrictions or difficulties obtaining future permits.

The seller should provide written disclosures and contractual protection for any known or historic violation.

13. Review Environmental Contamination

Industrial and commercial properties may have contamination caused by fuel, chemicals, oil, waste, underground tanks or historic production activities.

Environmental liability may remain significant even if the contamination occurred before the buyer acquired the company.

14. Check Hazardous Materials and Waste

Determine whether the company has stored or used chemicals, fuel, batteries, medical materials, industrial waste or other regulated substances on the property.

The buyer should inspect storage areas, disposal records, underground tanks and environmental correspondence.

15. Investigate Public Projects and Expropriation

Check whether the property is affected by planned roads, railways, public facilities, energy infrastructure, protected areas or other public projects.

These decisions may reduce development value, restrict access or create expropriation risks.

16. Verify Road Access and Easements

A property may appear accessible but lack a legally protected access route. Review road rights, easements, loading access, emergency access and rights over neighboring land.

17. Review Utility Rights and Capacity

Check electricity, water, gas, wastewater, drainage, telecommunications, heating, cooling and other infrastructure.

The buyer should identify unpaid utility debts and determine whether the existing capacity supports the intended business.

18. Investigate Tenants and Occupants

Prepare a complete list of tenants, subtenants, licensees, related companies, former employees and other occupants.

A company may own the property but lack immediate possession because a tenant has continuing contractual or legal rights.

19. Review Every Lease

Examine:

• Lease duration;
• Renewal rights;
• Rent amount;
• Rent adjustment clauses;
• Security deposits;
• Guarantees;
• Sublease rights;
• Repair duties;
• Termination rights;
• Handover obligations.

The buyer should not rely solely on a rent schedule prepared by the seller.

20. Check Rent Arrears and Tenant Claims

Review bank records, invoices, rent ledgers, payment plans, enforcement files and correspondence. Tenants may claim rent reductions, repair compensation, set-off rights or reimbursement for improvements.

21. Identify Security Deposits and Guarantees

The buyer should determine whether the company holds cash deposits, bank guarantees, insurance guarantees or personal guarantees. The acquisition agreement should allocate responsibility for returning or using these securities.

22. Investigate Property Litigation

Search for lawsuits involving:

• Ownership;
• Boundaries;
• Construction defects;
• Tenant eviction;
• Rent;
• Neighbor interference;
• Access;
• Common areas;
• Environmental damage;
• Expropriation;
• Contractor claims.

Undisclosed litigation can significantly reduce the value of the acquisition.

23. Review Tax and Public Debts

Check property taxes, municipal charges, waste fees, utility debts, penalties and other public liabilities connected to the real estate.

The parties should allocate pre-closing and post-closing liabilities clearly.

24. Examine Building Condition and Structural Safety

An independent technical report should review the building’s roof, foundations, structure, electrical systems, elevators, fire systems, heating, cooling, water installations and earthquake resistance.

25. Review Insurance and Previous Claims

Obtain insurance policies and claim histories. Investigate previous fires, floods, earthquakes, water damage, machinery accidents, structural failures and liability claims.

26. Check Service and Management Contracts

The property may be subject to contracts for security, cleaning, maintenance, elevators, landscaping, technical systems and property management.

The buyer should determine whether these contracts continue after closing and whether any unpaid amounts exist.

27. Identify Related-Party Property Transactions

The company may have transferred property, leased assets or granted rights to shareholders, directors or related companies below market value.

These transactions may create tax, valuation, creditor and corporate liability risks.

28. Review Existing Financing Covenants

The company’s loan agreements may restrict asset sales, transfers, additional mortgages, leases or changes in control.

Lender consent may be required before closing.

29. Confirm Property Valuation

Obtain an independent valuation that considers:

• Legal use;
• Rental income;
• Tenant quality;
• Encumbrances;
• Development rights;
• Building condition;
• Environmental risks;
• Marketability;
• Remaining lease terms.

A valuation based only on location or floor area may overlook serious legal liabilities.

30. Secure Contractual Indemnities

The purchase agreement should include detailed warranties and indemnities concerning:

• Title;
• Mortgages;
• Attachments;
• Permits;
• Zoning;
• Environmental issues;
• Tenants;
• Taxes;
• Litigation;
• Public restrictions;
• Undisclosed contracts;
• Unauthorized construction.

Escrow, retention amounts and post-closing claims procedures may also be necessary.

Why a Share Acquisition Requires Extra Protection

In a share acquisition, the buyer may inherit liabilities that do not appear on the balance sheet. The company may later face claims relating to conduct that occurred years before closing.

The buyer should negotiate:

• Specific property warranties;
• A disclosure schedule;
• Environmental indemnities;
• Tax indemnities;
• Tenant-related indemnities;
• Litigation protection;
• Survival periods;
• Liability caps;
• Escrow arrangements;
• Seller guarantees.

A general warranty that the company has “no liabilities” may not provide sufficient protection.

What If a Hidden Property Liability Appears After Closing?

The buyer should immediately preserve:

• Title records;
• Seller disclosures;
• Due diligence reports;
• Purchase agreement;
• Emails and messages;
• Technical reports;
• Payment records;
• Tenant correspondence;
• Official notices;
• Photographs and inspection records.

Possible remedies may include:

• Contractual indemnity;
• Price reduction;
• Compensation;
• Repair or correction;
• Termination of the acquisition in serious cases;
• Enforcement of escrow or guarantees;
• Court or arbitration proceedings.

The available remedy depends on the agreement, the nature of the liability and when the buyer discovered it.

2026 Practical Closing Checklist

Before completing the acquisition, the foreign company should:

1. Prepare a complete property inventory;
2. Obtain updated title records;
3. Review all encumbrances;
4. Check zoning and permits;
5. Commission technical inspections;
6. Conduct environmental due diligence;
7. Review tenants and leases;
8. Verify tax and utility debts;
9. Investigate litigation and enforcement;
10. Obtain independent valuations;
11. Confirm foreign ownership eligibility;
12. Negotiate detailed warranties and indemnities;
13. Use escrow or retention where appropriate;
14. Make closing conditional upon removal of critical risks.

Lawyer Fırat Fesih Kaya can review the company acquisition structure, property portfolio, title records, leases, permits and indemnity provisions for foreign buyers.

Conclusion

A foreign company acquiring a business with real estate in Turkey may also acquire hidden property liabilities. These risks can affect ownership, use, rental income, financing, resale value and future litigation.

The buyer should investigate every property separately and should not rely only on the seller’s financial statements or general corporate warranties. A detailed real estate due diligence process and carefully drafted acquisition agreement are essential for protecting the investment.

Frequently Asked Questions (FAQ)

1. Does a foreign buyer inherit real estate liabilities when acquiring a Turkish company?

In a share acquisition, the company remains responsible for its historic liabilities, and the buyer may indirectly inherit those risks through ownership of the company.

2. Is title deed review enough for a company acquisition?

No. The buyer should also review zoning, permits, construction, environmental conditions, leases, taxes, public restrictions and litigation.

3. What hidden liabilities are common in company-owned property?

Common risks include mortgages, attachments, unauthorized construction, missing permits, environmental contamination, tenant claims, unpaid taxes and access restrictions.

4. Can the buyer be responsible for pre-closing environmental contamination?

Potentially. Responsibility depends on the facts, applicable rules, the transaction structure and the contractual protections negotiated with the seller.

5. What if the acquired company owns property with tenants?

The buyer should review all leases, rents, deposits, guarantees, renewal rights, arrears, subleases and eviction disputes before closing.

6. Can the seller be liable for a property defect discovered after closing?

Possibly, if the seller gave a warranty, concealed the defect or breached a disclosure obligation. The purchase agreement is essential.

7. Should a foreign buyer purchase the company or only the property?

The better structure depends on tax, liabilities, permits, financing and business objectives. A share purchase may transfer broader historic liabilities.

8. Can mortgages and attachments remain after the acquisition?

They may remain unless properly released. The buyer should obtain updated records and require release or specific indemnity protection.

9. What documents should the foreign buyer request?

The buyer should request title records, permits, zoning documents, leases, tax records, environmental reports, technical inspections, insurance files and litigation information.

10. Can a foreign company claim compensation for an undisclosed property liability?

It may be possible through contractual indemnity, warranty claims or other legal remedies, depending on the agreement and the evidence.

This article is provided for general informational purposes only and does not constitute legal advice. We recommend consulting a lawyer about your specific circumstances to avoid any loss of rights.

Expert Legal Support

Foreign companies acquiring businesses with real estate need comprehensive legal due diligence before closing. Fırat Fesih Kaya Law Office provides assistance with company acquisitions, property portfolios, title review, zoning and permit checks, tenant liabilities, environmental risks, purchase agreements and post-closing claims throughout Turkey and abroad.

For a case-specific legal assessment, contact our office:

Lawyer: Fırat Fesih Kaya
Call: +90 312 434 22 22
WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Office: Mevlana Boulevard No:221, Yildirim Tower, Office No:148, Balgat, Cankaya, Ankara, Turkey