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Municipalities are local administrative units with public legal personality and may incur debts arising from both private law relationships (e.g. lease agreements, service procurement agreements, etc.) and administrative transactions established and activities carried out within the framework of public law. In this context, the question of whether real or legal persons who are creditors of municipalities can collect their receivables through compulsory enforcement is an important issue that requires legal assessment in terms of administrative law and enforcement and bankruptcy law.
As is well known, municipalities are local administrative units with public legal personality in accordance with the Constitution of the Republic of Turkey No. 2709 and related legislation. This legal personality status grants municipalities certain powers and privileges based on public authority, but at the same time imposes certain obligations and restrictions.
Pursuant to Article 125 of the Constitution, judicial recourse is available against administrative acts and actions. On the other hand, a special procedure is provided for the collection and enforcement of public debts, and in accordance with the provisions of Law No. 6183 on the Collection of Public Debts, public debts are collected forcibly within the framework of administrative procedures based on public authority.
However, there is an important distinction that must be emphasised here. If the debtor is a municipality with public legal personality and the creditor is a natural person or a private legal entity, then there can be no question of enforcement authority based on public power. On the contrary, the private person or private legal entity in question may collect the debt owed by the municipality in accordance with the general provisions of the Enforcement and Bankruptcy Law No. 2004.
Therefore, in legal relationships where municipalities are debtors, unlike the public receivables, private law provisions apply and, accordingly, the matter falls within the jurisdiction of the juidical courts. In this context, it is possible for the creditor to initiate compulsory enforcement proceedings against the municipality.
One of the most common disputes encountered in practice is the objection that 'the administration cannot be enforced' in relation to municipal enforcement proceedings. However, the Court of Cassation's case law on this matter is clear and unequivocal: Although municipalities are public legal entities, they may be subject to enforcement proceedings by natural and legal persons before the courts of law for debts arising from private law relationships. This situation demonstrates that the fact that municipalities are public legal entities does not imply a prohibition on enforcement proceedings.
At this point, it is important to note that legal regulations regarding municipal property that cannot be seized during enforcement proceedings are of particular importance in practice. Pursuant to Article 15 of the Municipalities Law No. 5393, immovable property allocated for public services, donations and aid, project-based borrowings, and tax, fee, and levy revenues of municipalities are exempt from seizure.
However, the essential factor in terms of the scope of this protection is that the relevant property or income is actually used in public service. The Supreme Court's case law also emphasizes that it is not sufficient for the property or resource to have been allocated by an administrative act alone; if the property or resource is not actually used for public service, seizure is possible.
In the enforcement proceedings initiated by natural or legal persons, a payment order is served on the municipality, and the municipality may object to this payment order within a seven-day statutory period. The filing of an objection essentially causes the enforcement proceedings to be suspended. However, if the municipality's objection is deemed unfounded or baseless, the creditor may file a lawsuit (cancelation of the objection) to have the objection overturned, thereby allowing the enforcement proceedings to continue. If the court issues a final and applicable decision confirming that the municipality is liable for the debt, it becomes possible to proceed with seizure proceedings in accordance with that decision.
In addition, various regulations have been introduced to strengthen the payment capacity of municipalities and ensure the uninterrupted provision of public services. In particular, the Collection General Communiqués published in recent years have made it mandatory to submit a certificate of no public debt for payments by municipalities that require cash outflow.
On the other hand, it has been observed that some municipalities have failed to fulfil their payment obligations despite their debts having been finalised by court decisions; in such cases, creditors seek to enforce their rights through enforcement proceedings. However, as mentioned earlier, seizure proceedings targeting municipal assets allocated to public services are subject to serious legal restrictions, and the protection of these assets is a priority.
One of the most common disputes encountered in practice is the application of the statute of limitations. Claims against municipalities are subject to general legal rules regarding the statute of limitations, and different regulations apply depending on the nature of the claim. In this context, the provisions of the Turkish Code of Obligations No. 6098 apply to claims arising from private law relationships; on the other hand, for public claims such as taxes, fees, and duties, the statute of limitations periods are determined by the Law on the Collection Procedures of Public Claims No. 6183.
To give a concrete example, while the five-year statute of limitations period stipulated by the Turkish Code of Obligations applies to rent receivables, the general statute of limitations period of ten years applies to invoiced receivables related to public services, such as water usage fees.
Municipalities do not have the discretion to refuse to pay barred by prescription receivables. However, in some cases, the mayor or municipal council may decide to write off the debt. This write-off process must be based not only on the fact that the debt has become barred by prescription, but also on valid reasons such as the impossibility of collection or legal invalidity. Otherwise, in addition to causing public harm, the legal liability of the relevant municipal officials will come into question.
As a result, it is legally possible for real and legal persons to collect their receivables from municipalities through compulsory enforcement. However, in this process, a balanced approach must be adopted between the municipalities' obligation to carry out public services without interruption and the creditor's freedom to seek justice. In particular, in attachment proceedings, it is mandatory to comply with certain legal restrictions in order to ensure the continuity of public services. However, it is necessary to ensure that the rights of the creditor are not violated by arbitrarily exceeding these restrictions. The provisions of the legislation and judicial decisions contain regulations aimed at establishing this balance and protecting the interests of both parties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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