Recovering Funds from Property Developers in Turkey: Legal Reality and Practical Risks

In recent years, a growing number of foreign investors have sought legal advice regarding disputes with property developers in Turkey, particularly in relation to the recovery of invested funds. The most common question remains straightforward:

Is it legally possible to recover money paid to a developer in Turkey?

The short answer is yes.

However, the practical reality is considerably more complex.

Legal Grounds for Recovery

Based on consistent legal practice over the past several years, investors do, in many cases, have a legitimate right to recover funds from developers. This is largely due to deficiencies in the contractual documentation used in many real estate transactions.

Turkish courts frequently rely on the wording and structure of sale and construction contracts, which are often drafted in a way that fails to properly reflect statutory requirements or the actual obligations of the parties. As a result, courts may rule in favour of investors and order the return of paid amounts.

From a purely legal standpoint, such cases may appear straightforward:

• a court decision is issued,
• the investor prevails,
• restitution of funds is ordered.

However, a favourable judgment does not necessarily mean that funds will be recovered in practice.

Enforcement Challenges After a Court Victory

The most significant difficulties typically arise at the enforcement stage, not during litigation itself.

While some developers are willing to negotiate once legal proceedings are initiated, others deliberately choose to litigate, fully aware that court proceedings may take approximately one year or longer. During this period, no payments are made, and the investor bears both time and opportunity costs.

Developers who have already experienced adverse judgments now clearly understand the financial consequences of losing such cases. In addition to returning the principal amount, they may be liable for:

• court fees,
• legal costs,
• attorneys’ fees,
• enforcement-related expenses.

These additional obligations often multiply the developer’s financial burden. As a result, developers increasingly prefer settlement negotiations rather than prolonged litigation.

Nevertheless, negotiations themselves carry significant risks if not approached strategically.

Why Timing Is Critical in Construction Disputes

Investors frequently insist on full compensation, including penalties and contractual damages, often calculated in foreign currency. In practice, however, obtaining substantial penalty amounts through the courts is extremely difficult, particularly in cases involving currency-based claims.

Even where a developer verbally agrees to such terms, actual payment is often unrealistic due to financial constraints or subsequent insolvency.

For this reason, timing is a decisive factor in construction-related disputes. As long as the developer:

• remains solvent,
• has not entered bankruptcy or restructuring proceedings,
• is still operational and negotiating,
• there is a realistic possibility of recovering funds.

Delays caused by excessive demands, prolonged negotiations, or insistence on maximum theoretical claims may result in a critical loss of time. In many cases, developers ultimately become insolvent, rendering even a successful court judgment unenforceable.

A Pragmatic Approach to Recovery

In the current legal and economic environment, the decisive question is no longer whether an investor can win a case, but whether the awarded amount can be effectively enforced.

The guiding principle in such disputes should therefore be pragmatic rather than ideological:

• recover what is realistically enforceable,
• act while enforcement remains possible,
• prioritise timing over theoretical maximum claims.

This approach does not reflect a weak legal position. On the contrary, it represents a realistic assessment of enforcement risks and a strategic effort to protect the investor’s financial interests.