Where the leased property is vacated before the term stipulated in the agreement has expired, the burden assumed by the tenant is not an unlimited debt covering the whole of the remaining period. That obligation is accepted as a duty of compensation limited to the loss actually suffered by the landlord. Article 325 of the Turkish Code of Obligations No. 6098 makes the tenant who returns the leased property before its time liable to make good the loss arising during the reasonable period within which the property could be let again.
The real argument in practice concentrates on how many months’ rent the tenant will be held liable for and on the criteria by which that period is to be determined. Establishing the scope and the limits of the liability accurately is decisive if the claim to be asserted is to be calculated correctly.
In this briefing note we address the scope of the rent and compensation liability arising from early vacating, the practical meaning of limiting that liability to a reasonable period, and the procedure by which the resulting claims may be asserted.
The Concept of Early Vacating and Its Statutory Basis
Early vacating is the tenant vacating the leased property by its own unilateral will, before the agreed lease term has expired, and delivering it to the landlord. In such a situation the lease agreement does not come to an end of its own accord; the tenant’s debts and obligations arising from the agreement continue to exist within the limits drawn by the statute.
The purpose pursued by Art. 325 of the Turkish Code of Obligations No. 6098 is to ensure that the loss suffered by the landlord upon a return made without observing the term is made good, while at the same time not leaving the tenant under an unlimited debt extending to the end of the agreement. The provision aims to strike a balance between protecting the landlord’s interest and not placing the tenant under a disproportionate burden.
Vacating the leased property in breach of the agreement results in the lease term not being observed and brings the tenant’s liability into question. The liability here does not, however, arise in the form of an absolute rent debt covering the whole of the remaining period; it appears as a duty of compensation limited to the loss suffered by the landlord during the reasonable period within which the property could be let again on similar conditions.
The basic principle on which the liability rests is as follows: the tenant continues to bear the debts arising from the agreement throughout the reasonable period within which the landlord could let the property again. The obligation arising in the event of early vacating is therefore not an unlimited debt extending to the end of the agreement, but a limited liability resting on the principle of making good the loss.
Does a Tenant Who Vacates Early Continue to Pay Rent?
The tenant’s rent debt does not disappear entirely when the property is vacated before its time. Under Art. 325 of the Turkish Code of Obligations No. 6098, even where the tenant has vacated the leased property early, it continues to be liable for the debts arising from the lease agreement throughout the reasonable period. In this respect early vacating is not an event that brings the debts arising from the agreement to an end of its own accord.
At the same time, the liability does not automatically extend to the end of the agreed term. The legislature has not held the tenant liable for the whole of the remaining lease term; it has limited the obligation to the period within which the landlord could let the property again. This period, referred to in practice as the reasonable period, is determined within the particular circumstances of each dispute.
Some judicial decisions show that the notice period stipulated in the agreement for termination (for example, that the tenant is to give notice at least 30 days before vacating) may be adopted as the reasonable period. On this approach the notice period agreed by the parties is assessed, to the extent that the features of the concrete case permit, as the reasonable period within which the property could be let again.
Indeed, in the judgment of the 3rd Civil Chamber of the Court of Cassation in case no. 2017/5409, decision no. 2019/1651:
"This condition, inserted by the free will of the parties, is valid and binds the parties. Since the parties determined the reasonable period in the agreement as 30 days and the respondent tenant vacated the property without complying with the notice condition, whereas it was necessary to award compensation for the 30-day reasonable period agreed in the agreement running from the date of vacating, the establishment of a judgment on the basis of a reasonable period of 7 months as a result of an incomplete assessment is not correct."
it was thus held that the reasonable period was the 30 days stipulated in the agreement.
A similar approach was also adopted in the judgment of the 3rd Civil Chamber of the Court of Cassation in case no. 2019/5073, decision no. 2020/3938:
"In the present case, Article 9 of the "Special Conditions" section of the lease agreement with a commencement date of 01.05.2012 and a term of 1 year, relied upon in the action and taken as the basis of the judgment, contains a notice condition in the following terms: "…The tenant shall be able to vacate the leased property provided that it gives notice to the lessor through a notary 3 months in advance. In that case, the rents relating to the months not actually used shall be returned to the tenant once the owner lets the building again".
This condition, inserted by the free will of the parties, is valid and binds the parties. Since the parties determined the reasonable period in the agreement as 3 months and the respondent tenant vacated the property without complying with the notice condition, whereas it was necessary to award compensation for the 3-month reasonable period agreed in the agreement running from the date of vacating, the establishment of a judgment, in the manner written, on the basis of compensation for a reasonable period of 7 months as a result of an erroneous assessment is not correct."
In this decision too the reasonable period was taken as the 3 months agreed in the agreement.
As for the concept of the reasonable period, it denotes the span of time within which the landlord could let the property again if it displayed the required diligence. The location and features of the property, the state of the rental market and how long it takes comparable properties to find a tenant are the elements observed in this determination. Since the period is not a fixed quantity, it varies according to the circumstances of the case.
In the final analysis, the basis of the liability is the making good of the loss suffered by the landlord. The tenant is held liable for that loss only to the extent of the reasonable period; once the property is let again, or once the reasonable period expires, the obligation to pay rent ceases.
The Reasonable Period as the Limit of Liability
The clearest limit on the liability arising from early vacating is the concept of the reasonable period. Under Art. 325 of the Turkish Code of Obligations No. 6098, a tenant who returns the leased property before its time is liable for the loss arising during the period within which the landlord could let the property again. It follows that the tenant’s debt is not a fixed performance continuing until the end of the agreement, but a duty of compensation limited by the period required for re-letting.
The reasonable period corresponds to the objective period within which the landlord could let the leased property again if it showed the necessary diligence. This period, which is not the same in every dispute, is determined by weighing together the features of the property and market conditions. In practice the period is mostly established by way of an examination by a court-appointed expert, and the assessment takes shape according to the circumstances of the concrete case.
What Does the Reasonable Period Mean?
The reasonable period is the interval of time the landlord needs, under ordinary conditions, in order to be able to let the leased property again.
In the judgment of the 3rd Civil Chamber of the Court of Cassation in case no. 2020/9451, decision no. 2020/6481:
"In this situation, it was necessary for the court to carry out an on-site examination and to establish, through a specialist court-appointed expert and by means of a report amenable to review by the Court of Cassation, within the framework of the type, features and location of the leased property, the degree of the need felt in that area for a property of such a nature and the other features specific to the concrete case, within what period the landlord would be able to let the leased property again on the same conditions if it showed the required effort, in other words, what the reasonable period required for re-letting on the same conditions is…"
and the criteria to be observed in the calculation were thereby set out.
Accordingly, the following elements are weighed in determining the period:
- The area in which the property is located:
The rental market in the city, district and neighbourhood in which the property is situated, the intensity of demand and the regional economic picture carry considerable weight in determining the period.
- The nature of the property:
Whether it is a dwelling, business premises, a warehouse or a property intended for commercial purposes, together with its size, purpose of use and technical features, directly affects the period of re-letting.
- Market conditions:
The general economic situation, the balance of supply and demand in the rental market, seasonal fluctuations and regional mobility may alter the length of the period.
- The possibility of letting:
The physical condition of the property, its suitability for use, the consistency of the price sought with the realities of the market and how long it takes comparable properties to be let are taken into account.
How Is the Reasonable Period Determined?
The statute has not fixed the reasonable period at a particular number of months or years. The period is determined according to the circumstances peculiar to each dispute, and the criterion taken as the basis is the objective period within which the landlord could let the property again if it showed the necessary diligence. Since the determination requires a technical assessment, recourse is mostly had to an examination by a court-appointed expert during the proceedings, and a period is arrived at by observing the features of the property together with market conditions.
- Examination by a court-appointed expert:
In determining the reasonable period, courts generally order that a report be obtained from court-appointed experts specialising in real estate valuation or the property market. The expert determines the period required for re-letting by assessing the rental market in the area, the letting periods of comparable properties and the physical features of the property. For that reason the reasonable period emerges in most files as the result of a technical examination.
- The practice of the Court of Cassation:
The case law of the Court of Cassation emphasises that the reasonable period must be determined according to the circumstances of each case, and accepts that, where the landlord shows the required effort towards re-letting, the tenant will be held liable only to the extent of that period. Behind this approach lies the intention not to turn the tenant’s debt into an unlimited rent obligation and to take the landlord’s actual loss as the basis.
In practice the parties frequently agree in the agreement that the tenant is to notify the landlord of its intention to vacate a certain period in advance. Where the tenant vacates the property early without complying with that notice period, the period in question may be accepted as the reasonable period.
- Assessment of the concrete case:
In determining the period, the nature of the property, its location, the consistency of the price with market conditions, the purpose of use and its lettability are addressed together. The effort expended by the landlord towards re-letting also enters into the assessment. In this respect the reasonable period is one that may vary from case to case and takes shape according to the concrete circumstances.
Situations in Which the Tenant’s Liability Comes to an End
The rent and compensation debt arising from early vacating is not an obligation without limit of time; it comes to an end upon the occurrence of certain facts. Since Art. 325 of the Turkish Code of Obligations No. 6098 limits the liability to the reasonable period, it is accepted that the tenant’s liability also comes to an end where the loss has ceased or where the landlord has caused the loss to grow.
- Expiry of the reasonable period:
Even if the property has not been let again, the tenant’s liability comes to an end upon the expiry of the reasonable period within which it is assumed the property could have been let had the landlord shown the necessary diligence. No rent may be sought from the tenant for the period after that date.
- The property being let to a new tenant:
Where the leased property is let to another tenant, the landlord’s loss of rent ceases. The tenant’s liability lasts until the date on which the new lease agreement enters into force; no rent or compensation may be claimed from the tenant for the period after that date.
- The parties reaching an agreement:
Where the parties bring the lease agreement to an end by mutual will, or agree on the date on which the tenant’s liability is to end, the liability ceases within the framework of the conditions of that agreement. In practice arrangements of this kind may have the character of a settlement or a release.
- The landlord failing to let the property:
Where the landlord does not expend the required effort towards re-letting, or refrains from letting the property although the opportunity to do so exists, the resulting loss remains with the landlord. In that case the portion of the tenant’s debt arising from the landlord’s conduct in increasing the loss is deducted.
How Is Compensation Calculated on Early Vacating?
The compensation that may be sought in the event of early vacating is determined, under Art. 325 of the Turkish Code of Obligations No. 6098, by taking as the measure the loss suffered by the landlord. That loss mostly consists of the loss of rent arising during the reasonable period within which the property could be let again. In the calculation, therefore, the rent agreed in the agreement, any other debts arising from the agreement (service charges, for example), the reasonable period and the circumstances peculiar to the case are observed together.
- Calculation over the reasonable period:
Since the tenant’s liability is limited to the reasonable period within which the property is accepted as capable of being let again, the amount of compensation is found by multiplying the monthly rent by that period. If, for instance, the reasonable period has been determined as 3 months, the tenant’s debt does not as a rule exceed 3 months’ rent. The determination of the period, for its part, rests on criteria such as the nature of the property, the area in which it is located and the state of the rental market.
- Taking the rent as the basis:
The core of the calculation is the monthly rent determined in the agreement. The tenant’s debt is found on the basis of the loss arising during the period in which the landlord was deprived of rental income. Although the price in the agreement is taken as the basis as a rule, where that price is clearly inconsistent with market conditions the features of the case are additionally weighed.
- Where a penalty clause has been agreed:
The agreement may stipulate a penalty clause to be paid in the event of the tenant vacating early. In such a case the landlord may demand payment of that sum. Where the penalty clause is excessive, however, it is possible for the judge to make a reduction. Moreover, the existence of a penalty clause does not give the landlord the possibility of making a claim exceeding its actual loss in all circumstances; the features of the case and the principle of equity are assessed together.
How Is a Claim Arising from Early Vacating Asserted?
Rent and compensation claims arising from early vacating may be sought by the landlord through recourse to legal remedies. Since these claims are monetary claims arising from the lease agreement, correct compliance with the rules of procedure becomes important in the process. In particular, completion of the mediation stage, the accurate choice of the court with subject-matter jurisdiction and the court with territorial jurisdiction, and proof of the basis of the claim are decisive if the dispute is to be concluded soundly.
- Mandatory mediation:
In respect of claims arising from a lease relationship, an application to a mediator is mandatory before recourse is had to an action. If an action is brought directly without this stage having been completed, it may be dismissed on procedural grounds for absence of a procedural requirement. The landlord must therefore go through the mandatory mediation process before bringing an action.
- The court with subject-matter and territorial jurisdiction:
In actions concerning rent and compensation claims arising from early vacating, subject-matter jurisdiction belongs as a rule to the Civil Court of Peace. As regards territorial jurisdiction, although the court of the place where the leased property is situated generally comes to the fore, the parties’ domicile or a jurisdiction clause in the agreement may also be decisive.
- Burden of proof and evidence:
The landlord is under a duty to establish that the tenant vacated early, that it suffered loss as a result and the amount of that loss. The evidence most frequently resorted to in this context is the lease agreement, the record of the handover of the keys showing the date of vacating, the date of the agreement made with the new tenant, comparable rent research and reports of court-appointed experts.
- Interest and ancillary claims:
The landlord may seek interest on the claim from the date of the action or of the enforcement proceedings. Provided they have been agreed in the agreement, a penalty clause, default compensation and other ancillary claims may also be added to the claim. It is therefore important that the starting date of the interest and the heads of claim be clearly indicated in the pleading.
Related Articles
The rent liability and compensation obligations that may arise where the property is vacated before the lease term has expired also produce consequences in terms of the ending of the agreement and the application of its provisions. Our other work connected with the subject is as follows:
- The Ending and Termination of the Lease Agreement and Its Grounds
- Can a Lease Agreement Be Amended? (Art. 343 of the Turkish Code of Obligations)
- Grounds for the Tenant’s Eviction and Eviction Actions
- The Prohibition of Penalty Clauses Against the Tenant (Art. 346 of the Turkish Code of Obligations)
- Can a Lease Agreement Be Assigned?
- Can a Business Premises Lease Agreement Be Assigned?
Independent Legal’s Assessment
In early vacating disputes the parties are often swept to one of two extremes: the tenant assumes that it is released from every kind of debt the moment it hands over the keys, while the landlord thinks it can claim all the rent up to the end of the agreement. The balance established by Art. 325 of the Turkish Code of Obligations No. 6098 excludes both approaches. The course of the dispute takes shape in most files according to how many months the reasonable period is determined to be; the preparation of evidence at the beginning of the process therefore directly affects the outcome.
Where early vacating arises, we recommend that the following points be assessed in advance:
- Checking whether the agreement contains a notice period or a penalty clause
- Recording the date of vacating by means of a record of the handover of the keys or an equivalent document
- Establishing the landlord’s effort towards re-letting by means of documents such as advertisements and estate agency records
- Bringing comparable rent research into the file before the examination by the court-appointed expert
- Completing the mandatory mediation stage in accordance with the proper procedure before the action is brought
- Indicating the starting point of the interest and the heads of claim separately and clearly in the pleading
Independent Legal provides advisory services and conducts litigation in compensation and debt disputes arising from lease agreements, from the mediation stage through to the conclusion of the proceedings.