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Long-Awaited Articles of Turkish Code of Obligations on Renting Business Premises With Roof Finally Entered Into Force on July 1, 2020

Long-Awaited Articles of Turkish Code of Obligations on Renting Business Premises With Roof Finally Entered Into Force

On 1 July 2012, when the Turkish Code of Obligations No. 6098 (“TBK“) came into power, the entry into force of some articles was postponed for eight years. Some changes shall occur along with the provisions on workplace rents, which were delayed until July 1, 2020. In this article, these changes shall be addressed.

Normally, the landlord’s consent is sought to transfer the rent by the tenant to third parties/persons. But Article 323, which shall enter into force, from now on, a landlord must rely on a justifiable reason to avoid giving this consent. The landlord, who has no justifiable reason, will not be able to refuse the tenant’s request. But, of course, the person who will take over the rented have to use the workplace similarly, give the same guarantee and agree on other terms in the current agreement.

According to Article 325, if the tenant returns the rented without complying with the terms of the contract or the terms of termination, the debts arising from the rental agreement shall continue for a reasonable period, during which the rented may be leased under similar conditions.

If the tenant finds a new tenant that the landlord may accept before the expiration of this period, who has the power to pay and is ready to take over the lease relationship, tenants debts arising from the lease agreement shall be expired. In accordance with the same article, the landlord is obliged to make discounts for the expenses that he/she has saved from doing and for the benefits that he/she has acquired by using the rented in another form, or he/she had intentionally avoided from obtaining, from the rental price.

According to Article 331, if there are reasons that may make the lease relationship unbearable from the landlord’s point of view or the tenant, these reasons shall be considered extraordinary reasons for termination. Even if the contract term does not expire, parties shall be able to terminate the contract in accordance with the term of notice of termination.

Article 340 introduced a ban on the contracts in connection. According to this provision, in workplace rental agreements, if the establishment or maintenance of the contract is related to the fact that the tenant is under a debt that is not directly related to the rented, other than in the interest of the tenant, this linked contract shall be considered as invalid.

With article 342, the guarantee provided by the tenant about the regulation on the cost of the deposit has been introduced. Accordingly, if a deposit is agreed in the contract, this price will not exceed the three-month rental price. Suppose money or negotiable instruments are to be provided as a guarantee.

In that case, the tenant deposits the money into a term savings account so as not to be withdrawn without the landlord’s consent and stores the negotiable instruments in a bank. The bank may return the guarantees only with the consent of both parties or based on a finalized execution proceeding or a finalized court decision.

In addition, if the landlord informs the bank, in writing, that he has filed a claim against the tenant due to the rental agreement within three months of the expiration of the rental agreement, or that he has engaged in enforcement or bankruptcy proceedings, the bank is obliged to return the guarantee at the request of the tenant.

With Article 343, a ban on amendments against the tenant has been introduced. Per this provision, it is prohibited to make amendments to rental agreements against the tenant, except for the rental price.

Article 344 outlines how to amend the rental price. Accordingly, an increase in the rental prices, which shall be applied during the renewed lease periods, will not exceed the Consumer Price Index (TUFE) change rate in the previous lease year compared to the twelve-month averages.

If the parties have not reached an agreement on this issue, an increase in the rental prices will be determined according to equity, taking into account the condition of the rented, so that it does not exceed the rate of change of the CPI following the twelve-month averages.

Without seeking any agreements between the parties, rental agreements which renew in more than five years or after five years, and at the end of every five years after this; increase of the rental price in the new lease year, increase to be applied on the rental price shall be determined by the judge with equity according to the change rate of TUFE within twelve-month averages according to the status of the rented and common rental prices.

If the rental price is agreed on in a foreign currency in the contract, the hardship provisions are reserved, but the rental price cannot be changed unless five years have passed. In determining the rental price after five years, amendments under the provision applied to lease contracts for more than five years, considering the changes in the value of a foreign currency.

With article 346, a ban on regulating the contract against the tenant has been introduced. Accordingly, it is prohibited to impose a payment obligation on the tenant other than the rental price and side expenses. Particularly, agreements upon the punishment clause or payment of the following rents in case of late payment shall be counted as invalid.

Finally, article 354 stipulates that the provisions relating to the termination of the rental agreement through litigation cannot be changed against the tenant.

Article Keywords: Turkish Code of Obligations, Turkish Code of Obligations on Renting Business Premises With Roof, Long-Awaited Articles of Turkish Code of Obligations on Renting Business Premises With Roof Finally Entered Into Force.

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