TERMINATION OF REAL PROPERTY LEASE CONTRACTS AS PER THE TURKISH CODE OF OBLIGATIONS NUMBERED 6098

Turkish Code of Obligations numbered 6098 (in Turkish “Türk Borçlar Kanunu”, hereinafter referred to as the “Code”) that came into force on 1 July 2012 regulates real property lease contracts (“Contract/s”) in the Turkish law system. The Code also provides substantial changes regarding the termination of real property lease contracts, especially lease contracts concerning residences and workplaces with a roof.

Below you may find some important aspects of these changes.

Definitions of Residence and Workplace with a roof:

Upon the entry of the Code into force, the Code on Real Property Leases numbered 6570 was abolished. The provisions of the Code are applied to the residences and the workplaces with a roof. The term “residence” and “workplace with a roof” has a broader meaning in the Code than in the former Code of Obligations numbered 818.

Residence is a place (apartment, villa, garden house, bungalow etc.) where people live in as their home. Although the Code does not explicitly mention the condition of having a roof, in practice, a roof is necessary to serve as a home.

Workplace with a roof is a place where economic or professional activities with a commercial or industrial nature are carried on.

Taking into consideration the above definitions, we can say that nearly all leasable real properties in Turkey are under the scope of the Code.

Also, the Code no longer makes a distinction between the real properties that are inside the municipal boundaries and the ones that are outside the same, which is a substantial change when compared with the abolished legislation. This regulation means that the provisions of the Code cover not only the

residences and the workplaces with a roof that are in the cities, but also the ones in towns and villages.

Scope of Application:

As per article 339 of the Code, related provisions are only applicable to the Contracts that are valid for more than six (6) months. In other words, the real properties allocated to temporary use for six months or less shall not be subject to the provisions of the Code regarding the lease contracts of residence or workplace with a roof.

Termination of Lease Contract of Residence and Workplace with a Roof:

Within the context of the Code, there are two different ways to terminate the Contract: (i) Termination by giving a notice of termination; (ii) Termination by filing a lawsuit.

(i) Termination by Giving a Notice of Termination:

1. 1. Termination of Fixed Term Lease Contracts by Giving Notice:In article 300 of the Code, fixed term lease contract is defined as a lease contract that expires on the date previously determined by the parties without requiring an additional notice of termination.However, termination of fixed term lease contracts concerning residences and workplaces with a roof are regulated by article 347 of the Code on a different basis.First of all, we note that a notice of termination is required for terminating fixed term lease contracts of residences and workplaces with a roof. As per article 347 of the Code, the tenant of a residence or a workplace with a roof can terminate the fixed term lease contract by giving a notice of termination at least fifteen (15) days before the date of expiry. If such a notice is not given, the contract shall be accepted as extended with the same conditions for one year. On the other hand, the Landlord is not entitled to terminate the contract alleging that the term of the contract has been expired.A landlord can terminate the fixed term lease contract without showing any reasons only at the end of 10 (ten) year period of extension by giving a notice of termination at least three months before the expiry of each extended year following this ten year period.Shortly, as per the article 347 of the Code:
2. 1. 1. Fixed term lease contracts do not automatically terminate on the expiry date of the fixed term;
      2. The tenant has the right to terminate a fixed term lease contract by giving a notice of termination at least 15 days before the expiry date of the contract;
      3. If a notice of termination is not duly given by the tenant, the contract is accepted as to have been extended with the same conditions for 1 (one) year term. However, the rent may be increased as per the relevant provisions of the Code.
      4. The landlord is entitled to terminate the fixed term lease contract only at the end of 10 (ten) year period of extension by giving a notice of termination at least 3 (three) months before the expiry of each extended year following this ten year period.

   Temporary article 2 of the Code numbered 6101 on the Enforcement and Application Procedure of Turkish Code of Obligations provides two different enforcement dates for article 347, which regulates termination of fixed term lease contracts: a) the article 347 of the Code has already entered into force as of 1 July 2014 for the fixed term lease contracts that have exceeded 10 (ten) years extension period before the entry of the Code, which means that the Landlord has gained the right of terminating such a Contract as of 1 July 2014 by duly giving a notice of termination; b) on the other hand article 347 will come into force on 1 July 2017 for fixed term lease contracts that have not exceeded ten-year period before the entry of the Code, but are in force for more than 5 (five) years at the time of entry of the Code.

3. Termination of Lease Contracts of Indefinite Duration by Giving Notice:
   As per article 300, lease contract of indefinite duration is defined in the Code as a lease contract which does not have a specific expiry date. Regarding the termination of lease contracts of indefinite duration concerning residence and workplace with a roof, the tenant and the landlord have different rights. As per article 347/2 of the Code, while the tenant can terminate the contract anytime by giving a notice, the landlord can terminate the contract by giving a notice as per the general provisions, only if 10 (ten) years have passed as of the commencement date of the Contract.
4. Validity Condition for Notice of Termination
   As per article 348 of the Code, a notice of termination is valid only if it is in writing. This provision is compulsory for both parties of the Contract and the parties are not entitled to agree that a verbal notice of termination shall also be valid.(ii) Termination by Filing a Lawsuit
   As per the Code, the landlord has the right to terminate the Contract by filing a lawsuit under certain circumstances provided in the Code. These circumstances are regulated in the Code in a limited number and it is not legally possible to increase them with the consent of the parties against the tenant. However, in the lease contracts of work places with a roof, if the tenant is a merchant as per the Turkish Commercial Code or a public corporate entity or a private law legal entity, this restriction shall not be applied for 8 (eight) years beginning as of 1 July 2012, which means until 1 July 2020. For such contracts, the provisions stipulated in the lease contract shall be applied as per the principle of freedom of contract. The Code classifies the circumstances giving rise to a lawsuit as the reasons arising from the tenant and the reasons arising from the landlord.

   As per article 350, if the landlord has to use the leased real property as a residence or a workplace for his/her own needs or the needs of his/her couple or his/her descendants or his/her linear ancestors or the people whom he/she is legally obliged to look after or if the leased real property requires  essential repair, enlarging or modification for reconstruction or renovation and it is impossible to use the leased property during this period; the landlord is entitled to terminate the Contract by filing a lawsuit upon the expiry of the term of contract for fixed term lease contracts and, within one month, and for the contracts of indefinite duration as of the date to be determined in accordance with the general conditions regulating the lease contracts and the periods set forth for the notice of termination.

   As per article 351, if the person who has acquired the leased real property after the execution of the Contract has to use the leased real property as a residence or a workplace for his/ her own needs or the needs of his/her couple or his/her descendants or his/her linear ancestors or the people whom he/she is legally obliged to look after, he/she may terminate the lease contract by filing a lawsuit six months after his /her acquisition provided that he/she informs the tenant in writing of the situation within one month following the acquisition.

   As per article 352, if the tenant does not vacant the leased real property although he/she has already undertaken in writing to vacant it at a certain date, the landlord is entitled to terminate the contract by filing a lawsuit or starting the execution procedure within one month as of the aforesaid date.

   Also, if the tenant has been served with two justifiable notices in writing due to outstanding rents, the landlord has the right to terminate the contract as per the procedure defined in the Code.

   Finally, if the tenant or his/her couple has an available residence within the same province border or municipal borders and if the landlord did not know this whilst executing the contract, the landlord may terminate the contract by filing a lawsuit within one month following the completion of the rental year.

   The Code also restricts leasing the vacant real property to another tenant. If the landlord has terminated the contract for his /her needs or for the needs of the people listed in article 351 and 352, he/she shall not lease it again to a third party, without having a justifiable reason, for three years following the termination. On the other hand, if the contract has been terminated for the purpose of reconstruction and renovation, the landlord shall not lease the subject real property to another person without reconstructing or renovating it in three years following the termination.

Our firm remains at your disposal for any further clarifications you may require.