ANALYSIS OF PROVISIONS OF THE TURKISH CODE OF OBLIGATIONS ON LEASES OF RESIDENTIAL AND ROOFED WORKPLACES

EREN KUTADGU 18/07/14

EREN KUTADGU

Introduction

Analysis of the provisions Article 339-356

Comparison with the relevant provisions of the previous Turkish Code of Obligations(818) and the Code on Real-Estate Leases(6570)

Examples and court resolutions regarding provisions

Conclusion

Index

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Notes

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TCO refers the Turkish Code of Obligations

Code numbered 818 refers the old Turkish Code of Obligations

Code numbered 6570 refers the Code on Real-Estate Leases

TCC refers the Turkish Civil Code

PPI refers Producer Price Index

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Introduction

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Concept of roofed workplace: Roofed working locations surrounded by the walls

Concept of residential: Wooden, adobe or ferroconcrete building to live, surrounded by the walls and divided into rooms, having a dedicated roof

Concept of roofed workplace: Roofed working locations surrounded by the walls

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Implementation Scope Article 339(TCO)-Article 1(n.6570)

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The expression of “musakkaf gayrımenkul” in the code n.6570 the expression of “residential and roofed workplaces” in the new code

Execution area is scoped within boundaries of municipality or being a wharf, port and station although being outside of municipality boundaries in the code n.6570

In the new TCO, all residential and roofed workplaces are within the scope of the provision

Furnitures existing in the leased property √

Leases less than 6 months X (Resolution of judge on its qualification)

Resolution of the Court of Appeal on the immobility of the leased

Same conditions for state institutions and organizations

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Connected Agreement Article 340(TCO)

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Not existing in the two old codes

Protection of lessee’s benefit

Partial nullity (article 27/2 of TCO)

For example: Obliged to buy sth. or insurance agreement

Postponed for 8 years for roofed workplaces pursuant to the Code on Implementation and Enforcement of Turkish Code of Obligations

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Utilization Expenditure Article 341(TCO)-Article 258(n.818)

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The lessee is obliged to pay the utilization expenditures

There shouldn’t be a provision or a local habit on the contrary

The conditions of lease that needs to be adequate during agreement will be in the liability of lessor

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Guarantee of Lessee Article 342(TCO)-Article 16(n.6570)

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Limit of 3 months of rental for guarantee Prohibition of payment of deposit or any other

means Purpose of protecting lessee Pursuant to Article 16 of the Code 6570, receipt

of key money by the lessor was subject to imprisonment and fine

Postponed for 8 years for roofed workplaces pursuant to the Code on Implementation and Enforcement of Turkish Code of Obligations

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Rental(I.General) Article 343(TCO)-Article 9(6570)

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Only exception of prohibition of amendment against lessee

Reason is to protect the benefit of lessor by acquiring the appropriate rental as per the condition of the lease

Postponed for 8 years for roofed workplaces pursuant to the Code on Implementation and Enforcement of Turkish Code of Obligations

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Rental(II.Determination) Article 344(TCO)

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No upper limit on rental increase in the old Turkish Code of Obligations due to freedom of contract

As per the new TCO, the upper limit for increase will be defined through producer price index (PPI)

Rental increase can be applicable in line with freedom of contract for roofed workplaces because of the 8-year-extension

For 1. and 2. paragraphs; PPI upper-limit / For 3. paragraph;

PPI a factor for judge’s decision

Determination of the PPI by previous year’s average

Prohibition of rental increase for leases based on foreign currency for 5 years

Moreover, even in the case of foreign currency’s extreme rise, due to “hardship”, lessee may ask to reevaluate the rental

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Rental (III.Term of Litigation and the Effect of the Resolution) Article 345(TCO)

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Rental determination action

The case can be presented anytime but for the cases defined in the provision, rental determined by the court will be valid and effective in the new term

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Rental (IV.Prohibition of regulation against lessee) Article 346(TCO)

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Prohibiton of penalty clause and maturity against lessee

Protection of lessee from paying anything other than rental and utilization expenditure

Postponed for 8 years for roofed workplaces pursuant to the Code on Implementation and Enforcement of Turkish Code of Obligations

Termination of the Leases

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Concept of roofed workplace: Roofed working locations surrounded by the walls

By lawsuit(article 350)

1.Reasons arisen from the lessor

a.Necessity, reconstruction and zoning(article 350)

b.Necessity of the new owner(article 351)

2.Reasons arisen from the lessee(article 352)

By notice(article 347)

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Termination of the Leases by Notice(1.General) Article 347(TCO)-Article 11(6570)

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Lessee: indefinite leases can terminate the lease anytime; definite leases can terminate the lease 15 days before of the expiration date

Lessor: indefinite leases can terminate the lease after the 10 year extension period; definite leases can terminate the lease after 10 year extension period and by 3 months prior notice by the begining of new extension year

Implementation period: This rule will become applicable (i) after five years following the effectiveness date of the TCO, for leases, extension period of which are not yet expired but the remaining lease period is less than 5 years; and (ii) after 2 years following the effectiveness date of the TCO, for leases, extension period of which have already expired.

Purpose of interception of lessee’s damnification

Termination of the Leases by Notice (2.Validity of the Notice-Form) Article 348(TCO)-Article 11(6570)

v

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Validity of the notices regarding the termination of leases is subject to written form

Obligation of written form also for the notice of cassation

Termination of the Leases by Notice (2.Validity of the Notice-Family Residential) Article 349(TCO)-Article 194(TCC)

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Purpose of protection of the conjugal union

Obligation of express consent of the other partner for termination

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Terminationof the Leases by Lawsuit (1.Reasons arised from the lessor; a.Necessity, reconstruction and zoning) Article 350(TCO)-Article 7,subclauses b,c,ç(6570)

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Expansion of eligible scoped relatives in this provision

Regulation in line with familial affairs

The fact of being intimate and realistic for necessity

Determination of people pursuant to the article 364 (alimony) of Turkish Civil Code

Termination of the Leases by Lawsuit (1.Reasons arisen from the lessor; b.Necessity of the new owner) Article 351(TCO)-Article 7,subclause d(6570)

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People having necessity are submitted restrictedly in the provision

The expression “ written notice” instead of the expression “written warning”

Possibility of bringing a lawsuit 6 months later from the obtainment of the property or bringing a lawsuit pursuant to article 350

The lessee will be protected until the end of the lease in case of annotation strengthened majority right

Termination of the Leases by Lawsuit (2.Reasons arisen from the lessee) Article 352(TCO)-Article 7,subclauses a,e(6570)

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Containing provisions in favour of the lessor Opportunity of filing an evacuation action by 2 reasonable

caution Time of the evacuation undertaking after the delivery

of leased property and also after the execution of the agreement

Form of the evacuation undertaking written and including a definite date

Discussion of free will about evacuation undertaking The case that that the lessee has another residential

within the boundaries of district municipality or town municipality

Termination of the Leases by Lawsuit (3.Extension of the Lawsuit) Article 353(TCO)

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Possibility of serving notice in 1 month after the extension or during the agreement in order to bring lawsuit

Probability of trouble due to this provision

Should be applicable in case of termination reason arisen due to the lessee

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Termination of the Leases by Lawsuit (4.Limitedness of Lawsuit Reasons) Artice 354(TCO)-Article 8(6570)

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Do not affect the lessor’s possibility on bringing a lawsuit pursuant to general provisions of TCO

For example article 331 of TCO

Postponed for 8 years for roofed workplaces pursuant to the Code on Implementation and Enforcement of Turkish Code of Obligations

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Termination of the Leases by Lawsuit (5.Prohibition of Re-Leasing) Article355(TCO)-Article 15(6570)

The expression of “valid ground” in TCO the expression of “vis major” in the Code n.6570

The fact “valid ground” constitutes exception of the 3-month-prohibition of leasing the estate to another

Decision of judge on existence of the “valid ground”

Another advantegous provision for lessee

Termination of the Leases by Lawsuit (6.Continuity of the lease in case of lessee’s death) Article 356(TCO)-Article 13(6570)

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Do not include inheritor of the decent because of her/his state of total subrogation pursuant to the Turkish Civil Code

Sources

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www.tbbbarodergisi.barobirlik.org.tr/m2012-102-1213

www.birlesmismarkalar.org.tr

www.turkhukuksitesi.com/makale-1488.htm

www.kazanci.com/kho2/mbb/files/maddegerekce6098.htm

www.kazanci.com/kho2/mbb/giris.htm

www.mevzuat.gov.tr/mevzuatmetin/5.3.6570.pdf