Omnibus Law Introducing New Regulations Regarding Attachment on A Residence Has Entered into Force

Omnibus Law Introducing New Regulations Regarding Attachment on A Residence Has Entered into Force

Law No. 7445 on the Amendment of the Enforcement and Bankruptcy Law and Certain Laws ["Amendment Law"] entered into force upon its publication in the Official Gazette dated April 5, 2023 and numbered 32154. The amendments, which primarily affect the Enforcement and Bankruptcy Law No. 2004 ["EBL"], increase the requirements for conducting attachment on residences and include substantial regulations in various areas, particularly with regard to the mediation system. The amendments pertaining to the mediation system will enter into force on September 1, 2023, while others are already in force as of April 5, 2023, the publication date of the Amendment Law. You can access our detailed article on the amendments regarding the mediation system here.

Court Approval for Attachment on Residence

With the Amendment Law, an article titled "Attachment on a residence" was introduced to EBL, requiring the bailiff to apply to the enforcement court for approval of the attachment order if the place subject to the attachment is a residence. Accordingly, attachment proceedings may only commence following the court's final decision to approve the attachment order if the court determines that the place subject to attachment is a residence. After the approval, the attachment will be carried out if it is found during the attachment process that the place is not a residence. However, the attachment process must be terminated if it is discovered that a place that was designated as non-residential is actually a residence and the debtor does not consent to the attachment.

In addition, the scope of goods that can be subject to attachment on a residence has been narrowed, and excessive attachment is prohibited. Accordingly, the personal belongings of the debtor and family members living together, as well as all household goods for the common use of the family members, cannot be subject to attachment. Also, the amount of attachment cannot exceed the amount of the receivable subject to the enforcement proceedings. The former regulation allowed for the attachment of goods with a value equal to double the amount of the receivable for cautionary purposes.

The new regulations will not apply to the precautionary attachment, to attachment orders issued before the effective date, and to the goods that were attached before the effective date, which is April 5, 2023.

Liquidation of Goods That No Longer Required to be Preserved

The Amendment Law regulates the procedures and principles regarding the liquidation of goods that are no longer required to be preserved, i.e., goods that are in the custody of a trustee even though the attachment, which was the basis of the preservation procedure, has been lifted. The enforcement office that carried out the attachment proceedings will liquidate such goods ex officio, and information on the goods will be announced through the National Judicial Network Information System (UYAP). Liquidation costs will first be collected from the advance in the file and then the budget of the Ministry of Justice. If both are insufficient to cover the costs, the debtor will be accountable for the remaining costs.

Opportunity to Apply to The Compensation Commission for The Right to Trial Within a Reasonable Time

Individual applications before the Turkish Constitutional Court regarding the right to trial within a reasonable time, will be transferred to the Compensation Commission within the Ministry of Justice. These applications will be examined and resolved by the Commission consisting of nine people to be appointed by the Minister of Justice from among judges and prosecutors. In order to speed up the process, the Commission members will not be assigned any other duties until the applications are finalized.

The Commission will convene with at least seven members and take decisions with an absolute majority. The Commission may, however, function in delegations of three members each, depending on the workload. In this case, the quorum for meetings will be the total member, and the decision quorum will be an absolute majority.

Monetary Limit in Commercial Litigation

Commercial courts of first instance are in charge of dealing with commercial cases and non-contentious judicial matters of a commercial character. In commercial courts of first instance some of the cases are heard by a committee of three judges –– a presiding judge and two judges of the court. Others, on the other hand, are ruled by a single judge. In cases heard by a committee, the written procedure is applied.

With the amendment, the monetary limit of the case value for cases that the commercial courts of first instance will hear as a committee has been increased from 500,000 Turkish liras to 1,000,000 Turkish liras. Accordingly, disputes with a case value below the specified monetary limit will be heard by a single judge and the simplified procedure will be applied in such cases. The monetary limit will be adjusted every year in line with the revaluation rate.

The Amendment Law also introduces regulations on smuggling and drug-related crimes, criminal procedure and execution, and financial support for new lawyers.