Partition of Inherited Real Estate: First Auction Now Limited to the Co-heir Owners

Where a property passes to several persons through inheritance, disagreement among the heirs over sale or division often ends in an action for the termination of co-ownership (izale-i şuyu). Where the property cannot be physically divided, the court orders co-ownership to be ended by sale, and the sale is carried out under the open auction rules of enforcement and bankruptcy law. Law No. 7589 of 31 July 2026 introduced a special procedure for these sales concerning property acquired through inheritance.

1. The new rule: the first auction only among the co-heir owners

According to the sentences added to the second paragraph of Article 114 of the Enforcement and Bankruptcy Law No. 2004 (EBL):

• For immovables that all owners acquired through inheritance and in which no third party other than the heirs has an ownership right,
• where co-ownership is ordered to be ended by sale, in the open auctions held, the first auction is held only among the co-heir owners.
• This auction procedure among the co-heir owners applies only once.

In other words, if one of the co-owners is an outsider, for example if a share was sold to a non-heir and transferred, this special procedure does not apply. The aim is to allow property held within the family to be assessed first among the heirs themselves.

2. Bid threshold

Under the amendment to item (8) of the seventh paragraph of EBL Article 114, the bids submitted on the electronic sales portal must exceed:

• generally, fifty percent of the appraised value of the attached asset,
• where the first auction in a sale to end co-ownership is held only among the co-heir owners, one hundred percent of the appraised value,
• in the second auction, the greater of fifty percent of the appraised value and the total of the receivables secured by the asset that rank ahead of the requesting creditor's claim, plus liquidation and distribution costs.

In other words, a bid in the first auction among the heirs must reach the full appraised value for the award to be made. The text of the law limits only the first auction to the heirs.

3. A bidder who fails to pay the price

Item (9) of EBL Article 114 was also amended. In a sale to end co-ownership, the deposit taken from the highest bidder who does not pay the price within the time limit is not returned:

• After deducting the costs of sale, the remainder is paid to the co-owners in proportion to their shares.
• If the bidder who does not pay is a co-owner, the whole deposit is paid to the other co-owners in proportion to their shares.
• In addition, an administrative fine of five percent of the bid is imposed on the highest bidder who does not pay the price in time.

It is therefore important for a person participating in the auction among the heirs to make a bid that they can realistically pay.

4. Amendment concerning creditors

Item (6) was also amended: a creditor who requests the sale and wishes to take part in the auction and applies to the enforcement office by the close of business on the working day before the end of the auction period will not be required to deposit security to the extent their claim is covered; the Treasury is exempt from depositing security in open auctions.

5. Transitional provision

Under the transitional article of Law No. 7589, these amendments do not apply to open auctions announced before the date on which they entered into force; the previous provisions continue to apply to those auctions. In other words, the new procedure applies to auctions announced after the amendment.

Practical suggestions for heirs

• Before filing for termination of co-ownership or before the sale stage, consider a share transfer or division agreement among the heirs. Mandatory mediation also offers an opportunity at this stage.
• An heir who wishes to keep the property should prepare the price and deposit in advance if they intend to bid in the first auction.
• Check in advance whether anyone other than the heirs is registered as a co-owner, since this procedure applies only to property that all owners acquired through inheritance.
• The time limits for objecting to the appraised value are short; they should be followed immediately once the valuation report is served.

Applying to a mediator before filing an action for termination of co-ownership is mandatory (Law No. 6325 Art. 18/B). For general information, see our article "Action for Termination of Co-ownership (Izale-i Şuyu)".

This article is provided for general information purposes only and does not constitute legal advice. Legal support is recommended for specific disputes.