Escrow in Turkey

Escrow agreements have become increasingly popular in Turkey as a way to secure payments, particularly in the case of conditional contracts. But what exactly is an escrow agreement and how does it work?

An escrow agreement involves transferring obligations to a third party, known as the escrow agent, in order to secure payment. This type of agreement is often used in real estate transactions, but can also be applied to other types of contracts. It is a way to ensure that both parties fulfill their obligations before the assets involved in the agreement are transferred.

There are several key elements to an escrow agreement. The first is the parties involved. There are three main parties in an escrow agreement: the transferor, who agrees to transfer assets or make a payment; the transferee, who will receive the assets if certain conditions are met; and the escrow agent, who holds the assets until the conditions are satisfied. Both individuals and legal entities can be transferors or transferees, and there may be more than one of each party involved in an escrow agreement.

The legal relationship behind the escrow agreement is also important. In Turkey, escrow agreements can be oral or written, but must include certain provisions such as the details of the assets involved and the conditions for transferring them.

The assets involved in an escrow agreement can be money, securities, or other valuables. It is important that these assets are clearly defined in the agreement.

Finally, there are the conditions for transferring the assets. These conditions must be clearly stated in the escrow agreement and must be met before the transfer takes place.

The escrow agent has a duty to act in good faith and must be neutral in the performance of their duties. They are responsible for holding the assets until the conditions of the agreement are met, at which point they will transfer the assets to the transferee.

In the event of a dispute regarding an escrow agreement, the parties have the option of resolving the issue through arbitration or by taking the matter to court.

In conclusion, escrow agreements are a useful tool for securing payments and protecting the interests of both parties in a contract. By understanding the key elements of these agreements and the legal requirements in Turkey, businesses can confidently utilize escrow agreements to ensure the smooth completion of their transactions.