Foundation Law

Within the scope of Foundation Law, we offer a wide range of legal consultancy, litigation tracking, and contract services, covering everything from foundation establishment processes to real estate transactions, and from drafting articles of association to the oversight of management decisions.

Foundation Law, with its historical roots, was shaped within the Turkish legal system by both Islamic and Ottoman legal traditions, and was subsequently re-regulated during the Republican era in line with a secular and modern legal understanding. The institution of foundations has historically played a significant role in establishing social justice and ensuring public benefit. In the Turkish legal system, a foundation is a private legal entity established by dedicating specific assets to a defined and perpetual purpose, possessing legal personality. In foundation establishment procedures, the foundation's purpose, asset components, and the administration of these assets must first be clearly defined; subsequently, the relevant articles of association and official instruments must be prepared, and the necessary procedures completed before the Directorate General of Foundations.

There are fundamental differences between foundation law during the Ottoman period and the foundation legislation shaped in the Republican era. In Ottoman law, foundations were regulated within the framework of provisions derived from Islamic jurisprudence (fiqh), and the continuity of the foundation was guaranteed by the distinction between 'charitable endowments' (hayrat) and 'revenue-generating properties' (akar). In foundations of this period, the founder's will was absolute, and the provisions of the foundation deed (vakfiye) recorded in the qadi registers were considered to have the force of a court judgment. However, in the Republican era, the will to establish a foundation was subjected to specific formal requirements, administrative and judicial oversight was increased, and particularly with the enactment of the Turkish Civil Code No. 4721, the rules regarding the establishment, operation, and termination of foundations were systematized and standardized.

Accordingly, when drafting the foundation's articles of association, not only the foundation deed but also statutory requirements must be thoroughly evaluated. The legality of the articles of association is essential to prevent future disputes. So, what happens if a provision in the articles of association is contrary to public order? In such a case, as a result of scrutiny by the relevant administrative authorities, the rejection of the foundation's establishment or the cancellation of its registration may occur. Therefore, when preparing the articles of association and the foundation deed, current case law and legislative provisions must be meticulously considered.

Decisions made by foundation organs and directorates, although not administrative acts, are binding under the foundation's internal law. However, the legality of these decisions can always be contentious. Another question is: By what procedure can an unlawful decision of the foundation management be annulled? Consequently, initiating a lawsuit in general courts for the annulment of the relevant decision and strict follow-up of the legal process are required. At this point, decisions of the Court of Cassation and Regional Courts of Appeal contain numerous opinions and rulings regarding the annulment of arbitrary practices by foundation administrators.

Real estate purchase and sale transactions on behalf of a foundation are carried out within the framework of the Turkish Civil Code and relevant land registry legislation, requiring special attention. Because such transactions lead to an increase or decrease in the assets of a legal entity pursuing public benefit, thereby directly affecting the foundation's purpose. During land registry procedures, documents related to the foundation's property rights and board of directors' decisions must be submitted. Furthermore, in some cases, obtaining permits or securing a court order may be necessary, which repeatedly complicates the process.

The issue of returning foundation real estate transferred to the state to its original foundation remains current, especially concerning properties dating back to the Ottoman period. In this situation, a lawsuit can be filed for the recovery and land registry registration of the relevant property, based on its historical foundation record. In these lawsuits, deliberations are made based on both administrative documents and historical registers, and judges investigate whether the property is conceptually a foundation asset and issue judgments accordingly.

Lawsuits concerning 'evladiye' claims (hereditary income shares) arise when the descendants of a foundation's founder seek to collect income shares due to them according to the foundation deed. Such receivables sometimes emerge as disputes between the foundation management and the founder's descendants, necessitating detailed calculations regarding income distribution and accounting. Similarly, claims for 'galle fazlası' (surplus income) are based on the requirement that foundation incomes be distributed at specific rates and any surplus paid to the beneficiaries. Disputes on this matter are particularly common in unsupervised foundations.

Every contract entered into by a foundation must be directly related to the foundation's purpose. Especially in contracts such as lease, construction, operation, and cooperation, protecting the foundation's interests is possible through detailed examinations conducted by a law firm. Obligations contained in contracts can determine the nature of future lawsuits. Naturally, pre-contractual negotiations and due diligence are crucial for preventing future legal disputes.

Regarding permits to be obtained from relevant administrations within the scope of foundation activities, petitions must be prepared with their legal grounds and the process meticulously followed. From the establishment of the foundation, acting in compliance with the administration and the law at every step of the process is essential for the foundation's continuity. It should be considered that in case of delays in permit processes or applications with incomplete documents, the foundation may face serious administrative sanctions.

In lawsuits concerning the establishment, operation, and termination of foundations, cases filed within the framework of the Turkish Civil Code and Foundation Legislation yield not only legal but also social consequences. Monitoring the foundation's activities beyond its stated purpose, management breaches, or dispositions concerning its assets forms the basis of these lawsuits. In this context, requests for the termination of foundations or the removal of management organs are thoroughly evaluated before the court, and decisions are rendered independently according to the judgment.

Legal services offered in foundation law are not limited to consultancy but also extend to a wide range including litigation tracking, document preparation, and contract review. Particularly in types of lawsuits with historical and jurisprudential foundations, such as 'evladiye' or 'galle fazlası' claims, examining historical records and tracing the historical evolution of ownership is a process requiring expertise. Therefore, it is important for the legal service provider to be able to comprehend not only positive law but also the historical and social context of the foundation institution.

Given the unique structure, technical details, and historical background of foundation law, resolving disputes that may arise in this field requires careful attention and specialization. The legislator's aim is to protect public benefit and ensure that foundation assets are managed free from exploitation. In this context, the protection of vested rights in legal processes necessitates a careful evaluation not only of statutes but also of case law. In a field shaped by both historical and contemporary regulations, such as foundation law, the correct diagnosis and resolution of procedural and substantive issues are of vital importance. In many matters such as the protection of property, fair distribution of income, and oversight of management, court decisions with the force of judgment become not merely outcomes but also jurisprudential sources guiding future actions. Therefore, in foundation transactions, utilizing the opinion of a competent expert and consulting with a law firm should be regarded as an effective means not only for resolving existing disputes but also for preventing future conflicts.

The services offered by our Law Firm concerning foundation law, some of which are explained below, are not merely the execution of formal procedures; they are performed on a multi-layered legal foundation rooted in historical origins, social context, and modern legal order. Both registration procedures and litigation processes should be evaluated with an approach that understands the spirit of the laws, rather than just their literal text. Naturally, in resolving disputes that may arise in this field, not only legislative knowledge but also accumulated case law and technical interpretative ability play a decisive role. In this context, even a minor error in the relevant transactions can damage the foundation's public reputation, lead to the loss of its assets, or result in a violation of the founder's intent. Therefore, obtaining professional support from the outset of the legal process is essential not only for fulfilling obligations but also for eliminating future disputes. The execution of these services with a comprehensive and multi-dimensional evaluation constitutes a fundamental requirement for the sustainability of foundation activities. In this respect, consultancy provided by a law firm serves not only a supportive but also a guiding and protective function.

Tracking and Finalization of Foundation Establishment Procedures: Foundation establishment refers to the formal recognition of a legal entity, formed by dedicating specific assets to a defined purpose, in accordance with Article 101 et seq. of the Turkish Civil Code. During the establishment process, it is essential to draft the foundation deed, apply to the court to obtain a registration decision, and secure a judgment with the force of a court order. The suitability of the purposes and activities stated in the foundation deed for public benefit is examined by the relevant authorities, and a decision is made regarding the acceptance or rejection of the establishment. In this context, the question arises: Can foundation establishment procedures be completed solely with a notary deed? However, in practice, this process repeatedly requires steps beyond a notary transaction, such as court registration, review of the foundation deed, and ensuring compliance with regulations. An error made during this process can ultimately lead to the annulment of the establishment. A foundation acquires its legal existence not merely through the dedication of assets, but also by ensuring that this dedication is compliant with the legal order, auditable, and sustainable. Legal services and consultancy provided during establishment procedures ensure compliance not only in form but also in content, particularly forming a vital basis for potential audits and disputes the foundation may face in the future.

Drafting Foundation Articles of Association and Legal Information Services: The foundation's articles of association constitute the fundamental internal regulation governing the foundation's organizational structure, administration, and purposes. It is essential that the regulations contained in the articles of association comply with statutory provisions and the established practices (case law) of the Directorate General of Foundations. If the articles of association are conceptually contrary to public order, the foundation's registration will not be possible. Here, the question can be indirectly posed: Is it possible to grant broad powers to the foundation's founder in the articles of association? Indeed, certain discretionary powers may be granted to the founder; however, if these powers lead to arbitrariness and undermine the principle of justice, judicial bodies may proceed to limit the foundation's will. This necessitates the meticulous drafting of the articles of association, taking into account legal precedents. A foundation's legal structure is shaped by its articles of association. This document guarantees the fulfillment of the foundation's purpose, while also forming the basis for its supervisory bodies. Therefore, the comprehensive deliberations and consultancy services provided by a law firm serve as a corresponding guarantee for the stable conduct of the foundation's future activities.

Review of Foundation Articles of Association and Legal Information Services: The review of a drafted foundation's articles of association requires evaluation not only in terms of language and expression but also for compliance with law, legislation, and judicial precedents. This examination is not merely a superficial reading; it necessitates the independent interpretation of each aspect of the articles of association's nature, purpose clauses, and administrative operational provisions according to legal norms. So, what happens if a reviewed article of association contains a provision clearly contrary to law? In this case, the founder is notified to make the necessary revisions before registration; after registration, correction can be sought by judgment through an annulment lawsuit. This clearly demonstrates the importance of the preliminary review phase. An erroneous or incomplete provision contained in articles of association can lead to the cessation of the foundation's activities, negative findings in inspector reports, or direct administrative sanctions. On the contrary, this preventive legal service plays a significant role in preventing potential damages and prepares the ground for foundation administrators to properly discharge their duties.

Review of the Legality of Decisions by Foundation Organs and Directorates, and Litigation Tracking: Decisions made by foundation management organs, while guiding the foundation's internal operations, can occasionally lead to the establishment of unlawful acts. These decisions particularly require oversight in matters such as deviation from the foundation's purpose, violation of the principle of equality, or improper administration of assets. In accordance with current legislation, annulment lawsuits can be filed in general courts for such decisions; and in cases where the foundation suffers damage, compensation lawsuits against those responsible may also arise. At this point, a question may be posed: Are such decisions considered administrative acts, or are they subject to private law transactions? However, in the practices of the Court of Cassation and Regional Courts of Appeal, there are established views that foundation management decisions are considered private law transactions due to their independence from public authority, and therefore, lawsuits for their annulment must be filed in private law courts. In annulment and compensation lawsuits, the petition must be supported by documents such as the foundation deed, the text of the decision taken, and activity reports; furthermore, the material and legal cause-and-effect relationship must be thoroughly presented. In this context, the legal services provided are not limited to conducting litigation but also include preventive oversight of decisions and consideration of alternative dispute resolution methods.

Preparation of Petitions and Application Process for Obtaining Necessary Permits Based on Foundation Activities: Foundations often incur the obligation to obtain permits from relevant public administrations to carry out projects aimed at public benefit. These permits may be required in various fields, ranging from establishing educational institutions to social assistance activities, cultural events, and real estate investments. The drafting of petitions within this framework, in accordance with the provisions of relevant laws and regulations, directly affects the outcome of the application. So, how does the application process proceed if a petition that was not properly prepared is rejected? Following the rejection, the applicant can either reapply after completing the deficiencies or file an annulment lawsuit in administrative courts to have the opportunity to dispute the grounds for consideration. In this situation, professional consultancy provided from the outset of the process is valuable for preventing future disputes. Permit petitions should not only state the requests but also their grounds, social contribution, and legal bases; the content of the petition must be persuasive for the relevant public officials. In this context, the examination and subsequent application procedures carried out by a law firm necessitate not only a formal but also a strategically results-oriented approach.

Legal Consultancy Regarding Real Estate Purchase and Sale on Behalf of a Foundation: The protection and increase of foundation assets, particularly real estate investments, are crucial for serving the foundation's purpose. However, real estate purchase and sale transactions are not merely transfer procedures carried out at the land registry; they are also processes requiring a serious legal infrastructure and multi-faceted scrutiny for collusion. In real estate transactions made in favor of a foundation, both tax exemptions and special permit procedures come into effect. At this point, the question may arise: Can foundation management undertake real estate purchase and sale by its own decision? Legally, it is possible; however, conceptually, these decisions must align with the foundation's purpose and be documented by a decision of the governing body. Otherwise, the annulment of the transaction and the liability of the management come into question. Obtaining legal consultancy in such transactions not only ensures compliance with legislation but also, in particular, allows for the examination of records pertaining to the property's history, such as mortgages, attachments, or land registry annotations. Thus, the impairment of the foundation's assets is prevented. It should also be considered that errors made in this area may form the basis for future lawsuits against the foundation's legal personality.

Recovery and Registration of Foundation Real Estate Transferred to the State: Some foundation properties remaining from the Ottoman period were registered in the name of the treasury upon transfer of ownership, and their recovery can still be a subject of legal dispute today. In these lawsuits, a 'mazbutiyet' decision (decision to place under state administration) established in favor of the foundation, ancient foundation deed examples, archival documents, and Sharia court registers can be presented as evidence. The relevant lawsuits aim for the return of the property and its re-registration in the name of the foundation. An important question here is: Which documents are considered the most effective evidence in such lawsuits? Contrary to general belief, not only land registry records but also archival documents based on foundation deeds, minutes, certificates, and historical judgment texts are of great importance. These documents are valuable for demonstrating that the property historically belonged to the foundation. In such litigation processes, the detailed historical background of the relevant property must be presented, and ancient legal regulations must be interpreted in conjunction with current legislation. Because in such lawsuits, not only legal knowledge but also an understanding of the historical context naturally influences the shaping of the litigation strategy. The registration decisions obtained in return are of a nature that restores not only the property but also the historical identity of the foundation.

Initiation and Tracking of Administrative and Legal Lawsuits Concerning the Establishment, Operation, and Termination of Foundations: In foundation law, the process extending from establishment to termination develops within a structure open to both administrative and judicial oversight. The establishment of a foundation is not completed solely with establishment procedures; the compliance of subsequent activities with law and articles of association is continuously examined by administrative authorities and courts. Particularly, instances such as deviation from purpose, neglect of duty by management organs, or improper use of assets can lead to the filing of a termination lawsuit. So, for what reasons can a foundation be terminated? The fundamental criterion in this regard is when the foundation's purpose becomes impossible to achieve or its activities are conducted in a seriously unlawful manner. In such situations, courts thoroughly evaluate the provisions contained in the foundation deed; if necessity arises, they decide on the termination of the foundation. Since termination lawsuits generally concern public benefit, extensive deliberation is conducted during the decision-making process. In conducting such lawsuits, technical aspects such as the legal liability of foundation administrators, accountability, and the retroactive effect of transactions are important. Therefore, consultancy provided by a law firm serves not only to resolve existing disputes but also to eliminate the possibilities of joint and several liability that may arise in the future.

Preparation of All Types of Contracts Related to Foundation Law: Although foundations are legal entities pursuing public benefit, they conduct their daily activities through private law contracts. These contracts are divided into different categories such as lease, operation, service procurement, partnership, and construction, and each carries different legal risks. Therefore, contracts must be drafted in a manner that is both compliant with legislation and serves the foundation's purpose. This point opens an important question: Can a foundation freely enter into all types of contracts like a commercial company? However, a foundation can enter into contracts within the limits defined in its articles of association and in a manner consistent with public benefit. An ultra vires contract can be deemed invalid by both foundation auditors and courts; it can also give rise to personal liability for administrators. Therefore, the contract drafting process offered as part of legal services is aimed not merely at producing text, but at establishing a structure that will not give rise to disputes, ensuring a balanced distribution of obligations, and maximizing the foundation's benefit, especially in income-generating contracts. In exceptional cases, provisions containing special clauses may be included; in such situations, detailed evaluation and, if necessary, the execution of a protocol between the parties are required.

Initiation and Tracking of Lawsuits for 'Evladiye' Claims: 'Evladiye' is an institution inherited from the Ottoman legal system, referring to the payment of specific proportions of a foundation's income to the descendants of the founder. This practice still maintains its validity in some 'mazbut' foundations (foundations under state administration) today. However, in most cases, lawsuits for 'evladiye' claims are filed by heirs due to the non-payment or insufficient payment of these amounts. At this point, the question arises: Is the right to 'evladiye' subject to a statute of limitations? Yes, this type of receivable, subject to the provisions of the Turkish Code of Obligations, is subject to general limitation periods; however, in many cases, heirs are unaware of this right and only become aware of the truth years later. This necessitates the retrospective calculation of claims and the examination of past income statements. In these lawsuits, the court proceeds based on documents such as the foundation deed, minutes, and income-expense statements. The irregular keeping of these documents can create a serious evidentiary problem for the plaintiff. Therefore, legal services in 'evladiye' lawsuits do not merely signify representation; they also encompass a comprehensive perspective for interpreting historical records and legally recognizing the right.

Initiation and Tracking of Lawsuits for Foundation Descendants' Surplus Income ('Galle Fazlası') Claims: 'Galle fazlası' refers to the distribution of surplus income, beyond the fixed proportions allocated to the founder's family from foundation revenues, according to the rates specified in the deed. This type of lawsuit, unlike 'evladiye' claims, may be based solely on an increase in income for a specific year or on underpayments extending to past years. Especially in ancient foundations, performing these calculations requires technical knowledge and careful attention. A question arises: By what method is 'galle fazlası' calculated? These calculations consider not only accounting records but also factors such as the distribution of foundation income and expenses, reserves, and administrative costs. Naturally, an incorrect assessment can lead to inequitable outcomes. For this reason, courts often request expert reports, and calculation methods shaped by case law are adopted. Success in these lawsuits depends not only on proving the existence of the claim but also on ensuring an equitable distribution. In 'galle fazlası' lawsuits, if there are multiple plaintiffs descending from the deceased founder, issues of party formation and ancillary intervention must also be considered. This, in turn, makes the process one that requires specialized expertise.