Lease agreements are among the most frequently concluded contracts in daily life and create long-term legal and financial consequences for both the landlord (property owner) and the tenant. In lease relationships regulated under the Turkish Code of Obligations No. 6098 (TBK), omissions or errors made at the formation stage of the contract lead to serious judicial disputes between the parties in later stages.

In this article, we examine the fundamental and general legal points the parties should observe in order to protect their legal rights when drawing up a lease agreement.

1. Accuracy of the Parties’ and the Property’s Identity Details

The first step of the contract is clearly establishing the identities of the parties.

  • For the landlord: Whether the person signing the contract is the actual owner (title holder) of the property should be checked through title deed records or up-to-date e-Government documents. If the contract is signed through a proxy, the notarized power of attorney containing a specific “authority to conclude a lease agreement” must be examined and attached to the contract.
  • Property details: The address of the leased place and its title deed details (block, parcel, independent section number) should be clearly written in the contract. It should be ensured that the place actually leased matches the place stated in the contract.

2. Rent Amount, Payment Date and Account Details

The rent amount is one of the essential elements of the contract. To prevent future disputes over default (irregular payment), the following points should be observed:

  • It should be clarified whether the rent is net or gross, and to whom the tax and withholding obligations belong.
  • The days of each month within which payment will be made (for example: between the 1st and 5th of each month) should be determined.
  • Under the legislation, rent payments above a certain amount must be made through a bank. The landlord’s IBAN number and account holder details should be added to the contract, and it should be agreed that the payment description will state “Rent for the month of .... of the year ....”.

3. Determining the Rent Increase Rate

Rent increase rates are subject to mandatory limitations under the provisions of the Turkish Code of Obligations. Even if the parties freely determine an increase rate in the contract, this rate cannot exceed the rate of change according to the twelve-month averages of the consumer price index (CPI) in the previous lease year. If an increase clause exceeding this legal limit is placed in the contract, the excess portion will be deemed legally invalid.

4. Security Deposit

The deposit issue, frequently the subject of disputes in practice, is bound to strict conditions in Article 342 of the TBK:

  • The security deposit may amount to a maximum of 3 months’ rent.
  • Under the legal regulation, if it is agreed that the deposit will be given as money, this money must be deposited into a time savings account not to be withdrawn without the tenant’s consent. Although this rule is mostly disregarded in practice, in order to prevent loss of rights, the fact that the deposit has been delivered and the conditions under which it will be returned should be clearly set out in the contract.

5. Condition of Fixtures and the Property

The physical condition of the leased property at the time of delivery (painted, free of defects, etc.), together with a list of fixtures such as the boiler, white goods and furniture and their working condition, should be attached to the contract as a detailed “Delivery Protocol.” Otherwise, at the eviction stage it becomes impossible to distinguish between ordinary wear and tear and damage arising from misuse, and the parties come into conflict.

6. An Important Detail Regarding the Eviction Undertaking

One of the documents giving rise to the most disputes in real estate law is the eviction undertaking. If an eviction undertaking is requested by the landlord, for it to be valid it must not have been signed on the same day as, or on a date earlier than, the lease agreement. The eviction undertaking should be signed of the tenant’s free will after the property has been delivered to the tenant (after a reasonable period has passed). Signatures affixed on the same day as the contract are deemed invalid in line with judicial decisions.

Conclusion

Lease agreements are texts that carry too much risk to be taken lightly by simply filling in pre-printed forms. While the principle of freedom of contract applies, the mandatory provisions of the Turkish Code of Obligations protecting the tenant must be taken into account. In order not to face lengthy eviction and receivable lawsuits in the future, the safest path is to have lease agreements prepared in a manner specific to the property type (residence or roofed workplace) through a lawyer specialized in contract law.