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NewsA GENERAL VIEW OVER THE PROVISIONS THAT SHALL BE APPLIED TO THE LEASES OF REAL ESTATE WITHIN THE CONTEXT OF TURKISH CODE OF OBLIGATIONS NUMBERED 6098

Haziran 1, 2012by admin

1. Upon the legitimateness of the New Code of Obligations, what kind of a legal arrangement regarding the Real Estate Leases has been enacted?
– The Law on Real Estate Leases numbered 6570 have been replaced by the provisions embodied in the context of the Turkish Code of Obligations (T.B.K) numbered 6098 as of the date of 01.07.2012.

2. What is the field of application of the provisions regarding the “Dwelling House and Roofed Working Place” within the context of Turkish Code of Obligations (T.B.K) numbered 6098?
– In accordance with the provision 339 of T.B.K; “The provisions regarding the leases of real estate and roofed working place shall be applied to the dwelling houses and to the places of which upper surface is closed and to the property left with these places to the lease holder.
– All the lease agreements that the public institutions and organizations drew up shall be resolved under those provisions regardless of their procedures and principles that are applied to.
– However; provisions shall not be applied for leases of the real estates been allocated, for six months or less, for temporary use as a matter of its qualification.

3. What kind of financial obligations does a lease holder have excluding the obligation to pay rent?
– According to the provision 341 of the Turkish Code of Obligations, the leaser has the obligation to bear the usage expenses such as heating, lighting and water unless there is a local use and wont. It can also be otherwise agreed under the agreement.
– The lease holder who paid the expenses should give to the lessor upon request one each copy of the documents proving these expenses.

4. What are the new conditions brought for the lease holder in relation to guarantee (Deposit) ?
– This subject is regulated under article 342 of the Turkish Code of Obligations. According to that; if ever the lease holder is kept obliged to guarantee with the agreement, this guarantee cannot exceed the amount of rent for five months.
– As is possible to guarantee with cash, it is also possible to guarantee with commercial paper (check or bond).
– The guarantee will not be delivered to the lessor but it will be deposited into a matured account by the lease holder under the condition that it will not be withdrawn without a consent of the lessor.
– If the guarantee is a commercial paper, it should also be deposited into a bank account, again, under the condition that it will not be withdrawn without a consent of the lessor.
– The Bank can refund the guarantees only with the consent of both parties or upon finalization of the execution of debt or upon the court’s final order.
– If ever the lessor did not inform the bank in a written form in three months following the termination of the lease agreement that he filed a suit against the lease holder in regards with the lease agreement in between or he started an executive proceeding or bankruptcy, the lessor shall be obliged to refund the guarantee upon the request of the lease holder.

5. Can the lease agreement be altered by the parties in the term of lease?
– Lease agreements cannot be altered to the detriment of the lease holder with the exception of the determination of rent.

6. How will rent be determined and how will be decided to an increase in rent?
– The parties shall be able to fix the rent which shall be applied in the renewed rental period with a provision for increase in rent that will be added to the agreement. However; the rate of increase that will be determined by the parties will be valid under the condition that it shall not be exceeding the rate of increase in producer price index. This rule shall also be applied to the lease agreements for over one year.
– If not specified by the parties under the agreement, the rent shall be determined by the judge under fair basis considering the conditions of the premise providing that it does not exceed the rate of increase in producer price index of the previous rental period. The criterion of fair basis herein points to the possibility that the rent can also be determined under the rate of the producer price index.
– The Article 344 of the T.B.K. states that; “Without considering whether or not there is an agreement drawn up between parties, the rent for over five-year lease agreements or for the lease agreements that are renewed after five year and at the end of every five-year that shall be applied in the new rental period shall be determined by the judge on a fair basis considering the rate of increase in producer price index, the condition of the premise and precedent leasing values. The rent that shall be determined in this manner at the end of every-five year can be altered in regards to the principles stated at the previous subclauses.”
– This regulation is as a messenger of a new period for leasings in Turkish Law. The rents can only be increased with the limit of Producer Price Index during five years, however at the end of this period and if necessary once every five years, it shall be determined by the judge considering the limits stated in law. The intervention of the judge herein states to the adaptation of an agreement to changing conditions.

7. How will the increase in rent be determined in case of leasings to be paid with foreign currency?
– If it is agreed under the agreement that the rent shall be paid in foreign currency, the rent cannot be altered before five years. However, it will be possible to demand the intervention of judge by applying the article 138 of this Law titled “Hardship”. In other words; if it becomes unbearable for a party to be tied up with the agreement, this party can be able to litigate.
– In the determination of the rent for the leases to be paid with foreign currency after five years, it will be possible to demand an increase in rent considering the changes in the value of foreign exchange under the provisions on adaptation regarding the leases to be paid with Turkish Liras which stated above.

8. What is the term of litigation for the lawsuits filed in order for the determination of rent?
– A suit in regards to the determination of rent can be filed at any time. However, if this suit is filed until the end of the following rental period providing that the lease holder is informed by the lessor in a written form that this suit is filed before thirty days from the starting of the new rental period at latest or the rent shall be increased in this term, the rent that will be determined by the judge shall be binding for the lease holder from the date of this new rental period.
– If there is a provision under the agreement stating to an increase in rent in the new rental period, the rent that shall be determined at the litigation by the court shall be effective from the starting of this new rental period.

9. What are the subjects prohibited to settle to the detriment of the lease holder?
– It will not be possible to bring an other payment obligation to the lease holder excluding rent and sub-expenses. Especially the agreements stating that the penal conditions shall be paid or the following rents shall be due and payable in case of rents are not paid promptly shall be accepted to be void and null.

10. How will a lease agreement be terminated?
– Unless the lease holder give notice with a written declaration 15 days before the termination of the fixed term agreements, the agreements shall be accepted to be extended for one more year under the same conditions.
– The Lessor shall not terminate the agreement on the ground of termination of the rental period.
– However, the lessor can terminate the agreement at the end of the ten-year extension period without showing any reasons by giving notice at least three months before the termination of each extension period following this period.
– The lease agreement of indefinite duration embodied in the context of the Turkish Code of Obligations (T.B.K), the lease holder at any time, the lessor ten years after the starting of lease, can terminate the contract with the notice of termination according to general provisions.
– According to the temporary provision 2 of T.B.K; the law shall be applied five years after its effective date to the lease agreements of which the ten-year extension period is not expired and the rest of the duration is less than five years and two years after to the lease agreements of which the ten-year extension period is expired.
– The Lessor or the Lease holder can terminate the agreement according to general provisions, in other words, in a situation where the parties could use the right to terminate on the basis of the breach of the contract.
– The leased premises used for the purpose of family dwelling, the lease holder shall not terminate the contract without an express consent of his partner. If it is imposible to obtain this consent or the partner avoids giving consent without justifiable reason, the Lease holder can demand a judge to decide on this subject.
– Other than a termination with notice, it is possible to terminate the agreement by lawsuit. According to that, the Lessor, the lease agreement
– If the Lessor is under the necessity of using the premise as an dwelling house or a working place for himself, his partner, decendants, linear ancestors or other poeople who he is obliged to look after by law and the premise requires major repairs, widening and changing with the purpose of reconstruction and restoration and it is imposible to use the premise during these works, the Lessor can terminate the fixed term agreement at the end of rental period and the agreement of indefinite duration in one month starting from the date determined in accordance with the terms set forth for dissolution period or notice of termination as per general provisions regarding leasing by filing a suit.
– If the person accruing the premise afterward is under the necessity of using the premise as an dwelling house or a working place for himself, his partner, decendants, linear ancestors or other poeople who he is obliged to look after by law, he can terminate the lease agreement by lawsuit opened after six months provided that he shall inform the Lease holder in a witten form in one month starting from the date of acquisition.
– The person accruing the premise afterward can also use the right to terminate the agreement, if necessary, by filing a suit in one month starting from the termination of rental period.

11. What are the other eviction reasons excluding necessity, restoration or reconstruction of premise?
– If the lease holder did not vacant the premise despite of the fact that he undertakes the obligation to vacant the premise on a proper date in a written form against the lessor after the delivery of the premise, the Lessor can terminate the lease agreement by applying for execution or filing a suit in one month starting from this date.
– If the Lease holder caused to be given two justifiable notices due to non-payment of the rent in the rental period for less than one-year contract or in one lease year or in the time exceeding one lease year for one year or longer time lease agreement, the Lessor can terminate the lease agreement thought litigation in one month starting from the termination of lease period and the termination of lease year given notice for leases of more than one year.
– If the Lease holder or his partner living together has an inhabitable dwelling house in the same boundary of county, city or municipality, and the Lease holder did not know this situation at the moment of drawing up the agreement, he can terminate the agreement in one month from starting the termination of agreement.
– The provisions regarding the termination of a contract through litigation cannot be altered to the detriment of the Lease holder.

12. Can the Lessor draw up an agreement with another person concerning the same premise in the event that the premise is vanished for necessity or reconstruction reasons?
– The Lessor cannot lease the premise to anyone other than former lease holder without justifiable reasons in three years providing the premise to be vanished for necessity.
– The premises vanished for the purpose of restoration or reconstruction shall not lease to anyone without justifiable reasons in three years. The former lease holder has the priority to lease the premise restored and reconstructed with the new state and new rent. This right shall be used in one month following the notice by the Lessor, the premise cannot be leased to others in three years unless this priory right expires.
– If the Lessor violates these provisions, he shall be obliged to compensate the former lease holder not less than at an amount of the rent of last lease year

13. How does the new legal arrangement take into consideration the Lessor-Lease holder relationship?
– Briefly stated, first of all the new arrangement aims to eliminate some breakdown seen in practise by now.
– The leading of them are the limitation of the increase in rent and the arrangement of the lawsuits filed in five-year periods. The objective is to provide a problem-free Lessor-Lease holder relationship for five years.
– The prohibition of increase brought in the leasings with foreign currency aims to encourage to draw up contracts more with Turkish Lira.
– The limitation of the value of guarantee with three months and also non-delivery to the Lessor aim to remove the financial loss of the Lessor and more importantly to prevent the Lessee from avoiding to refund the guarantee on his on initiative. While the existing regulatory requirements brought an obligation to the Lease holder to file a suit for the refund of guaruntee, the new arrangement reversed this situation.
– The contract exceeding 10 years can be terminated unilaterally by the Lessee without any reason, this is a new opportunity brought by the Turkish Code of Obligations. This opportunity is quite important for the Lessor who has to continue the contractual relationship for almost lifetime due to a lack of eviction clause.
– Matters accepted in practise today such as “Penalty Clause” and “Acceleration of period rent” were forbidden by the new law in favor of the Lessee.
– It is also new arrangement that the lawsuits based on necessity considered comprehendively in the intrest of people in need.