Ecrimisil Process in Municipalities

Author: Erman TAŞCI

Public institutions possess movable and immovable assets crucial for the continued delivery of public services. These assets are as vital as the administrative personnel for ensuring the uninterrupted provision of public services. Due to their nature, public goods differ significantly from privately owned assets. This distinction is particularly evident regarding publicly owned real estate’s management, leasing, and disposal.

The utilization of public goods by both individuals and legal entities in two broad groups: private and general use. In general use, public real estate is accessible to everyone for purposes designated by allocation, such as parks. Conversely, in the case of private use, specific individuals or entities are granted access in accordance with the nature of the allocation, often involving leased properties. Permission from the administrative authority is a prerequisite for private use, and such permission is typically temporary and subject to a fee. The withdrawal of this permission is at the discretion of the administrative authority. In administrative law, individuals who use public real estate without this permission and without a contractual framework are designated as “fuzuli şagil” or unfair users. The fee collected from these unfair users is called “ecrimisil.”

This study delves into applying the ecrimination process, a concept originating from public law, within municipalities. It begins by explaining the conditions for requesting clemency payments, followed by a workflow diagram of the process and insights into credit fee installment and available discounts.

Requirements for Requesting Clemency 

Individuals or entities using public property without proper authorization or a contractual relationship are considered unfair users. The fee collected from these users is known as “ecrimisil.” To claim compensation, the following criteria must be met:

1. Public property must be occupied.
2. The person using the real estate must lack a valid legal title or right.
3. The status of the unfair user, whether an individual or a legal entity, is inconsequential.
4. The administrative authority need not have incurred any loss.
5. The responsibility of the unfair user or their fault in the matter is irrelevant.

Article 15, paragraph 6 of the Municipality Law No. 5393, published in the Official Gazette No. 25874 dated July 13, 2005, states, “Those who commit an offense against municipal property will be regarded as having committed an offense against State property, and the provisions of Article 75 of the State Tender Law No. 2886 will also apply to municipal real estate.” Consequently, in cases of municipal real estate occupation, the administrative authority is empowered to assess penalty fees and collect them in accordance with the provisions of Law No. 6183.

Relevant Legislation Regarding the Ecrimisil Process

1. State Tender Law No. 2886
2. Regulation on the Management of Treasury Immovables
3. National Real Estate General Communiqué No. 300
4. National Real Estate General Communiqué No. 336
5. National Real Estate General Communiqué No. 343

Differences Between Rent and Ecrimisil 

Ecrimisil arises as compensation for the unfair real estate occupation. It serves as restitution for such unjust occupation. Despite similarities to lease agreements, there are fundamental differences between rent and ecrimisil, including:

1. Rent is a typical and contractual arrangement, whereas ecrimisil lacks a contract.
2. Rent is usually a forward-looking charge, while ecrimisil is collected retroactively.
3. VAT may apply to rentals, whereas compensation does not typically fall under VAT.
4. Private law provisions govern rent collection, while payment collection follows Law No. 6183.
5. Lease-related disputes are under the jurisdiction of the judicial judiciary, while ecrimination disputes are handled by the administrative judiciary.
6. Paying ecrimisil does not grant rights to occupy the property. Failure to vacate the occupied property does not preclude seeking additional compensation for the same property.

Article 75 of State Procurement Law No. 2886 stipulates that a fine will be imposed if occupation continues after the lease contract expires and the agreement does not provide a remedy. Upon the administration’s request, the occupied property must be vacated within 15 days and returned to the administration.

Installment of Ecrimisil Fee 

Debtors receiving an Ecrimisil notice or an Ecrimisil Correction Notice following an objection must submit a written request to the administration within 30 days if they encounter difficulties making the payment. If the request is approved, a minimum of 25% must be paid upfront, with the remaining balance payable in installments over a maximum period of three years. However, remuneration fees below 1% of the monetary limit defined in Article 76 of Law No. 2886 in Table (I) of the central government budget law cannot be paid in installments. These amounts for 2018 are detailed in the table below:

Payment in installments does not exempt the application of legal interest. Legal interest continues to apply to the outstanding balance. Once installment payments are approved, the Payment Plan for the Fee to be Paid in Installments, specified in Annex 1 of the National Real Estate General Communiqué No. 336, should be completed. A signed copy of this payment plan is provided to the unfair user.

The entire receivable becomes due if any installment is not paid by the due date. If a correction request has been submitted, the entire remaining receivable is pursued and collected in accordance with the provisions of Law No. 6183, with late payment interest applied, beginning 30 days after the penalty correction notice is issued to the addressee.

Discount on the Ecrimisil Fee 

Administrative authorities must grant discounts on remuneration fees, as determined by the Commission, under specific conditions. These conditions and discount rates are presented in the table below:

If it is discovered that a 20% discount was applied due to the absence of an objection, and a lawsuit is later filed due to the accrued penalty, the discounted amount is revoked and collected.

In the case of payment in installments, no discount is applied to the initial 25% premium paid in advance. Even if payment is made while objecting to the Ecrimisil, a 20% discount is not applied, as such payment is intended for preparing a lawsuit and constitutes an objection.

Statute of Limitations for Ecrimisil Receivables 

As with other public receivables, a statute of limitations is essential for the accrual and collection of compensation receivables. There are debates about when the statute of limitations for these receivables commences and concludes. When examining practical applications and jurisprudence, two aspects of the statute of limitations are evident: accrual and collection.

There is no explicit regulation when analyzing Law No. 2886 regarding the accrual statute of limitations. However, Article 92 of the law states, “In cases where there is no provision for calculating the periods written in this law, the provisions of the Code of Obligations apply.” Article 93 of the Regulation on the Administration of Treasury Immovables also references the Code of Obligations for calculating periods.

However, disagreements persist regarding which limitation periods stipulated in the Code of Obligations should apply. The Council of State argues that the 10-year general limitation period in the Code of Obligations should govern ecrimination cases. In contrast, the Supreme Court maintains that the 5-year limitation period concerning rental fees should be applicable.

Article 92 of Law No. 2886 references the Code of Obligations for determining the limitation period in ecrimination cases. According to Article 146 of the Code of Obligations, “Unless there is a provision to the contrary in the law, every receivable is subject to a ten-year statute of limitations.” Given the absence of specific provisions in the Code of Obligations concerning the statute of limitations for ecrimisil, it is reasonable to apply the general 10-year limitation period. Nevertheless, it is essential to acknowledge that the unfair use of public goods should not be equated with a tenancy relationship. Unfair use of public goods constitutes unjust exploitation, and the compensation received should be considered restitution.

The collection statute of limitations must not be interrupted or halted for Ecrimisil receivables to be subject to it. Article 103 of Law No. 6183 indicates that the statute of limitations can be interrupted, while Article 104 stipulates instances where the statute of limitations does not apply. Failure to meet the conditions in Articles 103 and 104 results in the public receivable becoming statute-barred five years after the due date.

Understanding the maturity date of receivables is of utmost importance. The maturity date of compensation receivables is specified in Article 87 of the Regulation on the Management of Treasury Immovables. Ecrimisil, when a correction request is made, must be paid to the accounting units within thirty days from the notification date of the Ecrimisil Correction Notice to the relevant individual. The end of the thirtieth day from the date of notification represents the maturity date. 

If the receivable is not collected within five years from the calendar year following the due date, it becomes statute-barred. Furthermore, Article 161 of the Code of Obligations prevents the automatic consideration of the statute of limitations unless it is explicitly claimed. Therefore, if the unfair user does not invoke the statute of limitations, the receivables can still be collected, even if they have surpassed the limitation period.

Conclusion

Turkey boasts a significant amount of public real estate, with over 50% of the country’s surface area owned and controlled by the state. This percentage is remarkably higher than the average of approximately 7% in the EU and the USA. Unfortunately, this extensive public real estate ownership does not necessarily translate into adequate protection.

Particularly concerning are the occupations of real estate transferred to municipalities from town municipalities and village legal entities that were closed after the enactment of Law No. 6360. Inventory issues often make it challenging to identify real estate properties that have been occupied.

In practice, lease agreements are sometimes concluded for properties known to be occupied without conducting a retroactive (5-year) remuneration assessment. Evaluation methods such as property sale, rental, or establishing easement rights should be given priority. In cases of detected occupation, retroactive compensation must be determined and communicated to the relevant parties without delay.

It is essential to distinguish between leasing and remuneration processes. Ecrimisil is not a lease agreement. When the lease period for a property expires, re-leasing procedures must adhere to the provisions of Law No. 2886. Failure to vacate the property within the specified time frame triggers penalties.

Ecrimisil should not be misconstrued as a property management tool; rather, it represents retroactive compensation collected from those who unjustly occupy public property. Ecrimisil serves to protect public property rights.

These regulations and processes are essential in ensuring that public assets are adequately protected and that fair compensation is collected when public goods are used without authorization or proper contractual arrangements.