The Monthly Newsletter

June 2020

THE PROVISIONS THAT HAS BEEN POSTPONED OF THE RENTAL AGREEMENT

Abstract: In this study, the provisions of the Turkish Code of Obligations (Law), which enforcement has been postponed to 1 July 2020, will be examined and the effect of the application of the provisions on the rental agreements will be discussed.

Introduction

In the Turkish Code of Obligations No. 6098, the entry into force of some provisions related to workplace rental agreements in which the tenant is a merchant or legal person has been postponed for eight years. Articles 323, 325, 331, 340, 342, 343, 344, 346 and 354 of the Turkish Code of Obligations, that has been postponed to get into force, will start to be applied in workplace rents, where the tenant is a merchant or legal person, on July 1, 2020.

These provisions, has been postponed, are protecting the tenant as preferred by the Law in the rental agreements. The renter, who is one of the parties, is considered to have the bargaining power while establishing the contract, due to economic power, and the legislator has introduced provisions protecting the tenant in order to balance this power. It is understood from the postponement of the provisions subject to our study; It is considered that there is no economic power difference in the business rents whose tenants are merchants or legal entities and it is not necessary to apply the provisions protecting the tenant for a while.

1- Transfer of Rental Relationship - Article 323

According to this article on the transfer of the rental relationship, the tenant cannot transfer the rental relationship unless it has received the written consent of the tenant. The tenant cannot avoid giving this consent in the business rents unless there is a just cause. It is not stipulated that the tenant refrains from consenting to the transfer of the rental relationship during the period of delay. With the termination of the postponement, with this provision, the tenant's intervention in the transfer of the lease relationship will only be possible if there are just causes..

The third paragraph of the article states that the tenant transferred in the business premises is jointly responsible until the end of the contract and with the transferee for a maximum of two years. In the period of postponement, the transferred tenant does not have such an obligation.

It can be said that this provision was introduced to improve the condition of the transferee and not to leave the transferee alone against the lessor.

2- Return of the Tenant before the End of the Contract - Article 325

According to this postponed provision, if the tenant returns the lease without complying with the term of the contract or the term of termination, the debts arising from the lease contract continue for a reasonable period of time during which it can be rented under similar conditions. In addition, if the tenant finds a new tenant who can be expected to accept from the lessor before the specified deadlines, has the power to pay and is ready to take over the rental relationship, the tenant's rent obligations will expire.

In the repealed 818 Law of Obligations, early termination and finding new tenants were not regulated, and disputes in this direction were resolved in line with the case law of the Supreme Court. With the aforementioned law article, the situation where the tenant's ability to get rid of the debts arising from the rental agreement depends on finding a new tenant is not included in the case law of the Supreme Court. The jurisprudence of the Supreme Court says that the tenant, even if there are new tenants, will be liable to the tenant during the reasonable period during which the tenant can be rented under similar conditions. It was pointed out in the provision of the 6th Civil Chamber of the Supreme Court of Law No. 2012/5538, Decision No 2012/10456, "The responsibility of the tenant is limited by the date of release, and the reasonable time required to be rented out under the same conditions."

The article to come into effect will reduce the renter’s responsibility to the tenant and facilitate the tenant to terminate the workplace contract early.

The obligation to deduct the benefits stated in the second paragraph of the article, which the tenant has avoided, and the benefits he deliberately avoided from obtaining from the rental value, is included in the new law in accordance with the case law of the Supreme Court.

3-Extraordinary Termination - Article 331

According to another postponed article, Article 331, each party may at any time terminate the contract in accordance with the legal termination notice, if there are important reasons that make the rental relationship unbearable for him/her. In fact, this provision is included in the abolished Law No. 818 on Obligations. Although, article 331 of the Turkish Code of Obligations does not bring innovation in terms of the first paragraph, the second paragraph is different from the old practice.

According to the second paragraph of Article 331, the determination of the monetary value of the termination notice and the determination of the monetary value is left to the judge's discretion. In the old practice, the terminating party is responsible for full compensation against the other party, and if the rental period is more than one year, the compensation fee will not be less than the six-month rental payment.

While the implementation of the abolished provisions continues in the postponement period, although the postponement is over, Article 331 will be implemented and the parties will face a new practice especially in terms of the economic consequences of the termination.

4-Related Contract Prohibition- Article 340

Another provision that has been postponed is article 340 of the related prohibition of contract, according to this article, if the establishment or maintenance of the contract in residential and roofed office rents is linked to a debt that is not directly related to the use of the renter, without the tenant's benefit, the contract associated with the rent is invalid.

The fact that this prohibition is included in the postponed provisions indicates that the parties can, as a rule, make a contract in the postponement period. If there is no legal guarantee preventing the execution of this contract, it is not included in the legislation. In the postponement period, the limits of this prohibition can be drawn only with the provisions of excessive use or with the article 27 of the Turkish Code of Obligations titled definite invalidity. Article 331 provides a more specific way of how the relevant contracts seen in residential and roof office rents should be evaluated.

With the termination of the postponement, if the rental contract is set up or maintained, a contract that is linked to the rent becomes invalid if it is linked to a debt that is not in the interest of the tenant, which is not directly related to the use of the to be rented. In addition, the rental agreement will remain valid.

5-Tenant Assurance - Article 342

Article 342 titled `` Assurance of the Tenant '' is one of the postponed articles. In this article of the Law, the reassurance amount to be given by the tenant is limited to three months' rental value. With this provision, if the security fee is to be paid in money, it will be deposited into the time deposit account and if it is to be given as a valuable document, it will be kept in the bank. Whatever method is chosen, the security fee is deposited so as not to be withdrawn without the consent of the tenant. The bank may return the security fee only upon the consent of the two parties, upon the finalization of enforcement proceedings or on the basis of the finalized court decision.

According to this provision, the bank is obliged to return the assurance at the request of the tenant, if the lessor did not inform the bank in writing within three months following the expiration of the tenancy agreement, that he had filed a lawsuit against the tenant, or that he had been pursued by execution or bankruptcy.

There is no regulation in this matter in the repealed Obligations Law No. 818. For this reason, there is no limit on the method and amount of the security fee to be paid during the adjournment period. In this case, the parties will be able to determine the amount of the guarantee and the method of issuance without limits within the framework of freedom of contract.

With article 342, upon the enforcement of the contract, the will of the parties to sign the rental agreement will be limited in favor of the tenant. In addition, having legal arrangements on this subject will enable people to act in accordance with the law in their relationships.

6-Rental Price and Price Determination - Article 343-344

Apart from the determination of the rental price in the rental agreements, the 343rd article of the Turkish Code of Obligations, which states that no changes can be made against the tenant, is one of the deferred provisions. According to this provision, which states that an exception against the tenant can be changed, it can be concluded that, as a rule, changes in the lease agreements can be made in favor of the tenant. This situation also shows the will of the lawmaker to protect the tenant in the rent contracts.

The issue of determining the rental value is regulated in detail in Article 344, another postponed article. According to this article, the agreements of the parties regarding the rental price to be applied in the renewed rental period are valid provided that they do not exceed the average twelve-month rate of change in the consumer price index of the previous rental year. It is stated that this rule will also apply to rental agreements longer than one year. In case the parties do not agree on this issue, the rental fee will be determined by the judge by taking into consideration the condition of the to be rented by the judge, provided that it does not exceed the average twelve-month change rate in the consumer price index of the previous rental year.

According to the third paragraph of the same article, regardless of whether or not an agreement has been made by the parties, the rental price to be applied in the new rental year, by the judge, the status of the rented, the consumer price index it is determined by taking into consideration the rate of change and especially equivalent rental prices.

In the fourth paragraph of Article 344, it is stated in the contracts that the rental price is decided as foreign currency, as a rule, the rental value cannot be changed until five years have passed. In determining the rental value after five years, the change in the value of the foreign currency must be taken into consideration.

All these issues show that the legislator explained in detail the determination of the rental value. However, the implementation of these provisions in workplace rents, where the tenant was a trader or legal person, was delayed for eight years.

It can be said that in the postponement period, the rents of the renewed period rental rate have reached exorbitant levels in the workplace rents where these provisions are not applied. The reason for this is that there are no other provisions preventing the release of the contract and the parties therefore determine high rental rates.

It can be said that with the implementation of article 344, the postponement of which will be delayed, the exorbitant rent increase rates will decrease to a reasonable level and the tenant will be prevented from falling into an economically difficult situation.

7-Prohibition Against Tenants - Article 346

Another article in which the lawmaker postponed its validity is Article 346 where it is explained to the tenant that no payment obligation can be imposed except for the rental fee and the sub-expenses. In this article, it is also stated that if the rent price is not paid on time, the penalty conditions will be paid or the subsequent rent fees will be due.

However, it is difficult to say that the prohibitions were implemented in the delay period due to the postponement of the application of this article. Thanks to the freedom of contract, the parties can set a penalty or additional payment obligation in their workplace contracts. There is no explicit provision that prevents these conditions from being imposed during the adjournment period. For this reason, conditions that do not contradict the mandatory provisions of the Law and do not cause excessive use apply.

With the expiration of the postponement period, the payment obligations and penalty records against the tenants will disappear and the tenants will be able to get the benefits they expect from the workplace rental agreement.

8-Limitation of Reasons for Litigation - Article 354

Article 354, which stipulates that the provisions regarding the termination of the rent by litigation, cannot be changed against the tenant. However, it cannot be said that the postponement of this provision makes a difference in practice. The legal gap arising from the postponement of the provision fills the mandatory provisions of the Law on Real Estate Rents regarding the causes of the lawsuit. The reasons for evacuation were given in limited numbers in the Law on Real Estate Rents and it was deemed invalid to evict the tenant for other reasons. The law makes a similar provision in article 354, and there will be no difference in terms of implementation of the termination of procrastination.

Conclusion

The provisions that came into force as of July 1, 2020, will find application area in the workplace rents where the tenant is a marchant or legal personAlthough the provisions are considered to be in favor of the tenant, the issue of how the implementation will be and how disputes will arise will manifest over time. In case of disputes before the courts, the enforcement of the legal provisions will result in the establishment of a jurisprudence.

As it turns out, as of July 1, 2020 the tenant, who is a merchant in the business rents, will be the legally protected side of the rental contract as per the choice of the lawmaker, although tenant has economic power and is in a position to negotiate with the lessor.

Ogün IRMAK