Innovations on Rental Law In Terms of The New Code Of Obligations

Innovations on Rental Law In Terms of The New Code Of Obligations

Summary 

The Law No. 6570 and the Law No. 6101 have been repealed as of 01 July 2012. From then on, the Law of Obligations No. 6098 is applied to all tenancies.

With the new term, some points have changed in tenancies, and there are brand new practices regarding some topics. In this study, changes and innovations to be considered for practitioners will be discussed. Although the law has been repealed, in all other matters not mentioned here, articles and jurisprudence in the old law period numbered 6570 are actually  still applicable.

One of the important points to be taken into consideration is that some provisions of the law have been postponed for 8 years in the workplace rents, where the persons who are considered to be traders in the Turkish Commercial Code and private and public law legal persons. Accordingly, the implementation of Articles 323, 325, 331, 340, 342, 343, 344, 346 and 354 for the tenants of these businesses has been postponed for 8 years as of July 1, 2012. The provisions of the contract will be applied to the places in this status, and if there is no provision, the provisions of the Law of Obligations are applied.

1) The Application Scope of ​​the Law Has Expanded

While the old law numbered 6570 starts with the sentence "With the places that are municipal organizations," the new Law of Obligations is arranged as "Provisions regarding the renting of houses and roofed businesses and the municipal organization, etc.”. In this case, the provisions of the lease in the new Code of Obligations can now be applied to all immovable properties such as residences and roofed workplaces, regardless of the administrative division (village, town, county, province, etc.).

The ban on the use of places of worship written in Law No. 6570 for leasing and other purposes has also been repealed and since no reorganization has been made, places of worship are also covered by the law.

The regulation that the same provisions will be applied to the item delivered with the leased one resolved the hesitations in the application.

In the new law, an important regulation that clarifies the application has been introduced about ''immovables that are specific for temporary use due to their nature''. In rentals that last less than 6 months in immovable properties such as pensions, cottages, plateaus, hotel rooms, residences, which are short-term rentals, the general provisions of the law, rather than housing and roofed office rents, will be applied.

Although the lease relations to which the public is a party are tried to be regulated in the Law No. 6570 and in its temporary articles, the new law combines these provisions, and in all lease contracts that meet the definition of which the public is a party, the provisions of the law on housing and roofed office rents will be applied.

2-) Assurance Fee (Deposit) Has Been Processed into the Text of the Law and Arranged

Perhaps the most striking of the new regulations regarding the rental law was these provisions. The deposit was entered into the law with the phrase "Assurance Fee" and a serious regulation was made about it. Accordingly, if the contract has been agreed, the deposit, that is, the security fee will not exceed the 3-month rental fee.

One of the provisions of the law regarding the assurance amount is to deposit the money in the bank and deposit account, without the consent of the lessor, without the approval of the lessor.

In my opinion, although I find it extremely positive, this provision will not find much practice in daily life with the influence of old habits, at least for a long time. In this case, it is also possible to request a refund at the end of the contract, provided that the money or precious documents given to the lessor are written in the contract.

It seems necessary to make an arrangement by banks for the security fees to be deposited in the bank. For the deposit account to be opened for the deposit amount to be deposited, the lease contract must be submitted and the information regarding the money / document needs to be delivered to the bank and the information about the leaseholder.

The refund of the security fee is also stipulated. Accordingly, if the tenant 3 months after the end of the contract and if the lessor in 3 months after have not notified the bank that they have applied for enforcement proceedings or litigation within these 3 months, they may receive the security fee from the bank. The lessor may apply for the bank by applying to the bank with a final enforcement proceeding or a finalised court decision against the tenant. With the agreement of both parties, the bank is obliged to pay the security amount according to the agreement.

Although, in the second paragraph of the law, only the execution proceedings and the case were mentioned for the right of the lessor to claim the security fee, just like in the third paragraph, it should also originate from the lease agreement where the subject matter of the execution proceedings and the subject matter of the case is subject to the guarantee.

3) The Bound Rate Rule Has Been Introduced to the Increase Rate of the Rental Price.

In the lease agreements, if the contract is renewed, although the item related to the increase in the rent, which determines the rental price to be applied in the new period, is left to the parties, this freedom is limited to '' the condition not to exceed the rate of increase in the producer price index (determined by the State Institute of Statistics) in the previous rental year ''. The exception to this condition is that, according to the Turkish Commercial Code, it will not be applied for 8 more years after the publication of the law about the people who are considered to be traders and legal person tenants. In other words, the rate of increase in rent determined in the contract for these tenants is valid until 2020, even if it is over the PPI.

This provision is one of the most important changes in the new law period. In this regard, it is likely that the issue will come before the Constitutional Court, as concepts such as the loss of property and excessive limitation appeared in the Constitutional Court decision dated 26/03/1963 and E. 1963/3, K. 1963/67. Of course, inflation seems to be closer to equity.

An important point in the issue is whether to determine the rate of PPI, whether it is the same month of the previous year or an average of 12 months. Although the law is not regulated explicitly, it is understood that the 12-month average calculation (last one-year period) will be more prevalent than the "previous rental year" of the law.

Despite the fact the the scenario, where the inflation closes with a minus balance, has not been regulated,, there will be a reduction in the rental price in favor of the tenant thanks to the previous similar arrangements (such as the Ministry of Finance's 2009 circular).

An increase will be achieved in lease contracts by applying this procedure until the 5th year. Although there is a provision regarding the annual increase in the contract, at the end of the 5th year, the parties may ask the judge to determine the new increase rate if they wish.

An innovation brought in favor of the tenant is that there will be no increase for 5 years for rental agreements, the price of which is determined in foreign currency. During this 5-year period, in case of an extraordinary exchange rate increase in foreign currency, the tenant is granted the right to request a discount or terminate the contract if they wish (With reference to Article 138).

There has been no change in the case of rent determination. The parties can open this lawsuit at any time provided that they comply with the deadlines.

4- The Conditions of Maturity and Criminal Condition Have Become Invalid

One of the most common situations in practice is that if the rental fee is not paid for a certain period of time, the rents until the end of the period become due or similarly counted as a penalty. The new law has clearly made these articles invalid.

5) The Tenant Has Been Granted The 10th Anniversary Right To Terminate The Contract

In the law numbered 6570, the lessor was not granted a right of termination with regard to the term of the contract and the expiration of the term, while the new law granted the right to terminate the contract in a lease relationship that has completed its 10th year, without giving reasons to the lessor. In accordance with provisional article 2 of the Law of Enforcement alone, the right of termination for ten years of lease contracts specified in this article cannot be used after 01.07.2014, but for contracts over 5 years after 01.07.2017.

6) The Concept of Family Residence is Embedded in the Law and is Now Under Protection

With the new law, spouses can no longer terminate the contract on their own, and the lessor who knows the situation will have to make the necessary notifications to the other spouse. In fact, this situation seemed new in the law of obligations or lease law, but it was a provision that was already regulated in the Civil Code Art.194.

Necessary for this is the rental of the leased to be used as family residence. It will be noted here that the spouses make the contract together as much as possible and it is written in the contract that it will be used as a family residence or if they do not, the spouse who is not named in the contract informs the lessor in writing.

7) The Scope of the Possibility of Evacuation due to Need has been Expanded for the Present Owner and for the New Owner

Law No. 6570 included the words ”as a dwelling for himself or his spouse or children” and “for himself or his spouse or his children to perform a profession or art” in cases to be opened due to the need of the new leaseholder or the new owner taking over the immovable during the lease agreement. The new law used the phrase “because of the need for housing or workplaces for themselves, spouse, sub-division, superiority or other persons who are obliged by law to be cared for”.

With this amendment; descendant, kinship and those who are obliged to be looked after, the law were added to those in need, and the scope was expanded by including the children and grandchildren of the lessor.

8) Status of Municipalities and Other Public Institutions

With the provision added to the Code of Obligations, it is stated that the law is binding and included in the public legal entities. In other words, in contracts where municipalities and other public institutions are tenant or lessor, the law of obligations will be applied.

Here is an important detail to note; In practice, especially for the immovables leased by the municipalities in accordance with the Public Procurement Law, another reason for the evacuation regulated by this law is that the lessor may request the evacuation of the lessor at the end of the contract, regardless of the duration. This right is still protected.

9) New Suretyship Provisions of the Code of Obligations Will Apply For Those Who Guarantee Lease Agreements

The guarantor issue, which has an important place in the lease agreements, still maintains its validity. Since the law does not have a bail provision only in lease contracts, it is necessary to look at the provisions of the law regarding bail contracts.

Accordingly, the most important point to be noted is that the suretyship should be written in the handwriting of the surety, the date and scope of the amount to be responsible.

 

**This study is prepared by Kula Law Office. Please contact by e-mail ([email protected]) or call at +902324350604 for publication of the article in other channels, detailed information and questions about the subject.

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