What is a Lease Agreement?
In our legal system, the lease agreement defined in Article 299 of the Turkish Code of Obligations is described as: “A contract whereby the lessor undertakes to allow the lessee to use or benefit from something, and the lessee undertakes to pay the agreed rent in return.”
The lease agreement, which we frequently encounter in daily life, refers to the lessor allowing the lessee to use or benefit from something, and the lessee paying a fee in return for this use or benefit. The lessor is obligated to permit the lessee to use the leased item during the agreed term, and the lessee is obliged to pay for the use of the item.
A lease agreement can be made either verbally or in writing, with the consent of both parties. In such agreements, periodic rent increases may be agreed upon. However, if there is a legally prescribed rate of increase determined by law based on the lease contract between the parties, the rent increase cannot exceed the legal rate. Even if the parties initially agree on an increase rate in the contract, the increase cannot exceed the legal rate. If the contractual rent increase rate is below the legal rate, the lower contractual rate will apply.
What Are the Elements of a Lease Agreement?
For a lease agreement to be valid, it must contain certain essential elements. If these elements are absent, a valid lease agreement cannot be considered. These fundamental elements are, in order: the mutual consent of the parties, the transfer of the use of a property or an item, and the consideration (rent). The tenant is obliged to pay a fee in exchange for using the leased property. Although a lease agreement is not required to be in any specific form, having it in writing is important for evidential purposes.
The lease agreement is established when all these elements are present together. The concluded lease agreement imposes certain rights and obligations on both parties.
What Are the Types of Lease Agreements?
In our legal system, three types of lease agreements are regulated under the Turkish Code of Obligations. These are ordinary lease agreements, residential and roofed workplace lease agreements, and product (revenue) lease agreements.
An ordinary lease agreement is a contract where the property owner grants the right to use a specific property to the tenant, based on mutual consent and for a predetermined fee. Ordinary lease agreements can be established either verbally or in writing.
The residential and roofed workplace lease agreement is another type of lease contract specifically regulated in our Code of Obligations. Under these agreements, the tenant cannot be burdened with any obligations other than the rent and ancillary expenses. The provisions regarding the rent also apply to items provided to the tenant along with the workplace or residence.
Product revenue lease agreements involve the property owner leasing out a property that generates products and income when operated, in return for a fee. The tenant operates the lessor’s property and earns income from it, while the lessor receives an agreed-upon payment from the tenant in exchange for leasing the property. This type of agreement can be established either in writing or verbally.
How Is the Increase Rate Determined in Residential and Roofed Workplace Lease Agreements?
In our law, residential and roofed workplace lease agreements are regulated differently from ordinary lease agreements established for fixed terms. It should first be noted that even if residential and roofed workplace lease agreements are set for periods such as one year, the right to terminate these agreements is granted solely to the lessee. The lessee may terminate the lease agreement by giving notice 15 days prior to the end of the lease term. Otherwise, the lease agreement is extended for one year. However, it should also be noted that if any of the eviction conditions arise, the lessor may request the eviction of the leased property, limited to the reasons for eviction.
Article 344 of the Turkish Code of Obligations specifies the conditions for determining the rent. Turkish Code of Obligations 344/1 states: “The agreements of the parties regarding the rent to be applied in renewed lease periods shall be valid provided that the rate of change does not exceed the twelve-month average change in the consumer price index for the previous lease year. This rule also applies to lease agreements longer than one year.” Therefore, regardless of the increase rate agreed upon in the lease agreement, the rent increase rate applied to residential and roofed workplace lease agreements cannot exceed the CPI (Consumer Price Index) rate under any circumstances. A rent increase rate below the CPI can be agreed upon annually with the consent of the parties.
To avoid confusion, it should be stated that until 2019, the rent increase rate was limited to the 12-month average of the Domestic Producer Price Index (D-PPI, formerly TEFE). With the regulation introduced in 2019, the rent increase rate has been limited to the Consumer Price Index (CPI) average. Additionally, according to the new regulation, for contracts renewed between June 11, 2022, and July 1, 2023, and not exceeding five years, rent increases cannot exceed 25%. This 25% increase limit will only apply during the specified dates unless a new regulation is made.
Things to Know About Lease Agreements
In residential and commercial lease agreements, if the formation of the contract is conditional upon an issue that does not benefit the tenant and is not directly related to the use of the leased property, and the tenant incurs an obligation because of this condition, then the contract related to the lease is invalid. (Conditions such as “I will rent you my house, but only if you buy my car” are invalid.)
- Changes made against the tenant, other than the determination of the rent amount, are invalid in lease agreements. (Prohibition of adverse regulations)
- Agreements that impose penalties for late payment of rent or that make subsequent rents immediately due are invalid.
- In residential and commercial leases, the tenant cannot be burdened with any obligations other than the rent and additional expenses. Even if otherwise agreed in the contract, the relevant contract clauses are invalid.
- However, persons under 18 years old, those under legal incapacity, and those lacking the capacity to distinguish do not have the authority to sign lease agreements.
- The authority to sign the lease agreement belongs to the property owner and the tenant. The property owner may delegate signing authority to another person through a power of attorney. The tenant may also have someone else sign on their behalf via a power of attorney, provided the landlord accepts it.
ANTALYA TENANT LAWYER – ANTALYA RENTAL LAW ATTORNEY
As can be seen, lease agreements, which hold a significant place in our legal system and daily life, are contracts that must be established with great care. Tenants and landlords, who are protected by the legislator in many respects, often suffer injustices and damages in practice because they are unaware of their rights. For this reason, obtaining assistance from a specialized lawyer is extremely important. As Antalya legal services, our law office provides you with professional follow-up and consultancy services in the field of Rental Law.
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