Lease agreements bind their parties, as a rule, for the agreed term. The Turkish Code of Obligations No. 6098 has nevertheless provided a special way out that loosens this bond in situations where the continuation of the relationship can no longer be expected of one of the parties under the rule of good faith. Termination for a compelling reason is the statutory expression of that exceptional possibility, and it is regulated in Article 331.
The field in which this provision operates is narrow. It cannot be relied upon unless extraordinary developments have arisen that could not be foreseen in the ordinary course of the lease relationship and that render the parties’ continued adherence to the agreement meaningless in fact or in law. Indeed, in practice the party taking this route is often unable to obtain the relief sought because it cannot cross the threshold between an ordinary difficulty and an extraordinary situation.
In this briefing note we address, in turn, the criteria to which the power of termination conferred by Art. 331 of the Turkish Code of Obligations No. 6098 is subject, which facts may be accepted as a compelling reason for the tenant and for the landlord, which grounds are by contrast regarded as insufficient, the proper exercise of the right of termination, the judge’s power to award compensation and the conduct of eviction proceedings.
The Concept of Termination for a Compelling Reason
The legislature has allowed a lease agreement to be brought to an end before its term expires where the relationship turns into an unbearable burden for one of the parties. The criterion on which this possibility rests is not a subjective discomfort but the fact that the continuation of the relationship can no longer be expected under the rule of good faith.
The power of termination is exercised unilaterally; its exercise, however, requires a situation whose gravity and exceptional character are beyond dispute and which goes far beyond ordinary difficulties. An economic downturn, a change of personal preference or dissatisfaction with the leased property does not meet this threshold on its own. What is required is that the continuation of the agreement has become objectively impossible or unbearable.
The provision from which the rule derives reads as follows:
Turkish Code of Obligations No. 6098, Art. 331
"Where compelling reasons exist that render the continuation of the lease relationship unbearable for it, either party may terminate the agreement at any time by observing the statutory notice period for termination. The judge shall determine the amount of the compensation to be paid by the parties on account of the termination of the agreement, having regard to the circumstances and in particular to whom the fault is attributable."
As can be seen, the institution does not abandon the principle of adherence to the agreement altogether; it relaxes that principle in the face of extraordinary conditions and leaves the parties a proportionate way out. In this respect, termination for a compelling reason has the character of a balancing mechanism.
The Purpose Pursued by Art. 331 of the Turkish Code of Obligations No. 6098
The thinking behind the article is to confer on a party the power to withdraw from the agreement in situations where the lease relationship has become excessively onerous for it or entirely impossible to bear. The legislature has thereby accepted that the lease bond is not an absolute obligation that remains unchanged in all circumstances, and that the parties cannot be compelled to remain in the agreement where extraordinary conditions arise.
It should nevertheless not be forgotten that the provision was not designed as a frequently used route to eviction. What is in issue in practice is a mechanism of predominantly exceptional character, one that can be operated only in genuinely serious and unusual situations.
Comparison with Other Grounds for Eviction
In the other routes to eviction regulated in lease law, it is mostly sufficient that the specific conditions required by the statute have been met; grounds such as need, reconstruction and two justified warnings follow a typical factual pattern. In termination for a compelling reason, by contrast, there is no such predetermined list of facts. What is decisive here is that the continuation of the agreement has ceased to be defensible under the rule of good faith. This flexibility at the same time makes the institution exceptional; it is not a general ground for eviction that can be applied in every dispute.
A further distinction lies in the compensation dimension. In termination based on a compelling reason, the judge may order one of the parties to pay compensation to the other in order to cover the losses arising from the early termination. The mechanism therefore does not merely bring the agreement to an end; it also ensures that the balance of interests between the parties is observed.
Situations That May Constitute a Compelling Reason for the Tenant
For the tenant, a compelling reason denotes extraordinary developments that make the continuation of the lease relationship so onerous that it can no longer be expected under the rule of good faith. Such developments typically arise outside the tenant’s will and control; they either render the use of the leased property wholly impossible or make it excessively difficult. It was noted above that not every hardship reaches this description and that personal preferences are in no way sufficient.
The leased property becoming a source of danger to health or safety is one of the clearest examples under this heading. Where the building has suffered serious damage, where the load-bearing system has lost its safety or where the property has become uninhabitable, the tenant cannot objectively be expected to remain in the agreement; this situation may give the tenant the possibility of relying on a compelling reason.
The emergence of a serious safety risk at the property may lead to a similar result. Incidents threatening the tenant’s life or property, or the property losing its character as a safe living space, may render the lease relationship unbearable for the tenant. Temporary disturbances and ordinary friction between neighbours, by contrast, do not reach this level of gravity on their own.
Serious changes in the state of health of the tenant or of a relative the tenant is bound to support are also taken into account. Illnesses or disabilities that markedly restrict mobility may give rise to a compelling reason where they are incompatible with the physical features of the leased property. To expect a person who is unable to climb stairs to continue living in a building without a lift may become a demand that does not accord with the rule of good faith.
A permanent change of location occurring outside the tenant’s will, for example appointment to another province or a long-term posting, may render the use of the leased property meaningless in practice. The loss of the tenant’s opportunity to benefit from the property in this way may be regarded as a compelling reason. Temporary or short-term changes of location, however, do not as a rule produce this result.
In leases of business premises, the question that arises is the business becoming legally or factually impossible to continue. In situations such as revocation of the licence, prohibition of the field of activity or compulsory closure of the premises, the continuation of the lease relationship may serve no purpose. A mere fall in turnover, or business not going as well as expected, is generally not regarded as sufficient.
Compelling Reasons for the Landlord
The same criterion applies to the landlord; the threshold, however, is set higher in practice. Since the fundamental orientation of lease law is the protection of the tenant, for the landlord to be able to rely on this provision the fact put forward must be serious, must show continuity and must be such as to render the continuation of the lease relationship objectively impossible.
Serious infringements of personality rights may be mentioned first. Conduct by the tenant amounting to assault, threat or insult against the landlord or members of the landlord’s family may destroy the foundation of trust on which the lease relationship rests. Where physical assault, serious threats or acts of sustained harassment are in issue, it may not be possible to conduct the legal relationship in a sound manner.
The second group covers the allocation of the leased property to unlawful activities. The carrying on of criminal business at the property may lead to the premises being sealed or to the landlord incurring legal liability. Faced with such a situation, expecting the landlord to remain bound by the agreement may be incompatible with the rule of good faith and may constitute a compelling reason.
Situations Not Regarded as a Compelling Reason
Not every hardship encountered or every change of preference justifies bringing a lease agreement to an end in reliance on Art. 331 of the Turkish Code of Obligations No. 6098. Since the provision is intended only for extraordinary and serious situations, difficulties that are to be expected in the ordinary course of life fall outside its scope. In practice the grounds set out below are not regarded as sufficient on their own, and requests for termination based on them mostly come to nothing.
- Deterioration of economic conditions. A fall in income, commercial expectations not being met or the rent weighing heavily on the budget does not constitute a compelling reason. The tenant’s bankruptcy is subject to a separate provision, Art. 332 of the Turkish Code of Obligations No. 6098.
- Changes of location arising from short-term postings or education. Temporary assignments or an obligation to be elsewhere for a limited period are not regarded as sufficient; the change of location must be permanent and must render the continuation of the lease relationship impossible in practice.
- Finding a more favourable property. The fact that the tenant has secured a dwelling or business premises at a lower price does not justify termination; such a choice is a personal decision taken within the ordinary conditions of the agreement.
- Ordinary friction in neighbourly relations. Occasional noise, arguments and minor disturbances are not regarded as sufficient for termination; the problems must have acquired continuity and reached a level that is serious and renders life unbearable.
- The leased property failing to meet expectations. The property not suiting personal taste or being inconvenient in use is not regarded as a compelling reason; dissatisfaction of this kind is treated as being among the risks inherent in a lease agreement.
The Procedure for Exercising the Right of Termination
The existence of a compelling reason does not on its own bring the agreement to an end. Unless the procedure required by the statute is followed, the termination may produce no legal effect. Giving notice, observing the statutory periods and, where necessary, resorting to the courts are therefore decisive in the process.
Written Notice of Termination
The party relying on a compelling reason must communicate its intention to the other party in writing. The notice must clearly set out the fact on which the termination is based; it must also be possible to prove that the notice reached the addressee. That is the reason why service through a notary is preferred in practice: it provides a strong basis in terms of proof.
Observing the Notice Periods
Art. 331 of the Turkish Code of Obligations No. 6098 requires the right of termination to be exercised in compliance with the statutory notice period. Those periods are laid down in Article 329:
Turkish Code of Obligations No. 6098, Art. 329
"Either party may terminate a lease agreement relating to immovable property or to a movable structure, by observing a three-month notice period for termination, for the end of the lease term determined by local custom or, where no such custom exists, for the end of a six-month lease term."
Notices given without observing that period may produce no legal effect; in such a case the lease relationship may be regarded as continuing.
The regime is different for leases of movables. As a rule, the parties may bring the agreement to an end at any time by giving notice three days in advance. In the case of movables leased out by the landlord within the scope of its commercial activity and set aside for the tenant’s private use, the tenant may proceed to terminate by giving notice at least one month in advance for the end of a three-month lease term.
The Mandatory Mediation Stage
Eviction claims arising from a lease relationship are subject to mandatory mediation as a procedural requirement. Where eviction is to be sought on the basis of a compelling reason, the mediation process must have been completed before the action is brought. Actions brought while skipping this stage carry the risk of being dismissed on procedural grounds.
Eviction Following the Notice
If the tenant does not vacate the property after the notice has been given and the statutory period has expired, the eviction stage is reached. The party exercising the right of termination may ask the court to establish that the lease relationship has come to an end and to order the leased property to be vacated. In examining this claim, the court reviews both whether a compelling reason genuinely exists and whether the termination was carried out in accordance with the proper procedure.
Enforcement of the Judgment through the Enforcement Office
Where eviction is ordered, the judgment is carried out through the enforcement office. If the property is not vacated of its own accord, compulsory eviction may be carried out. The costs of the proceedings and the expenses arising from the eviction are also mostly borne by the tenant at this stage.
Compensation in Termination for a Compelling Reason
The ending of the agreement before its term expires may result in the other party suffering loss. Having regard to this possibility, Art. 331 of the Turkish Code of Obligations No. 6098 confers on the judge the power to award appropriate compensation with a view to observing the balance of interests between the parties. The right of termination is thus preserved while the losses stemming from early termination are also intended to be made good.
An award of compensation is not mandatory in every case. The judge decides by assessing together the circumstances of the case, the parties’ fault, the term of the agreement and the nature of the loss that has arisen. In short, compensation is not an automatic consequence of termination but a legal possibility subject to discretion.
The Statutory Basis of the Compensation
The basis of the compensation is Art. 331 of the Turkish Code of Obligations No. 6098 itself. The provision states that, in the event of termination based on a compelling reason, the judge may order one of the parties to make an appropriate payment to the other according to the particular features of the situation.
The purpose of this rule is to prevent the early ending of the agreement from causing an economic imbalance between the parties. In long-term lease relationships, early termination may give rise to a considerable loss for one of the parties. The institution of compensation serves as an equalising instrument that allows such losses to be made good on an equitable basis.
Situations in Which Compensation Arises
Compensation comes into question where the other party has suffered a concrete loss because of the termination. It becomes claimable in particular where an economic loss arises from the agreement ending before its time. Two typical scenarios stand out in practice: the landlord being deprived of rental income for a certain period as a result of the tenant vacating the property before the term expires and, more generally, a reduction in the assets of one of the parties on account of the early termination.
That said, where the party claiming compensation is seriously at fault in the emergence of the compelling reason, an award of compensation may not be possible.
The Judge’s Discretion in Determining the Amount
The statute has laid down no fixed measure for the sum to be paid; it has left the judge a wide margin of discretion. The judge determines an amount consistent with equity by weighing the particular features of the case. The headings that stand out in this assessment are the following: the remaining term of the agreement, the parties’ fault, the type and extent of the loss, the parties’ economic position and the manner in which the events occurred.
The amount of compensation in termination for a compelling reason therefore varies from case to case; there is no standard method of calculation that can be applied to everyone.
The Eviction Action Based on a Compelling Reason
If the other party does not vacate the property of its own accord after the notice of termination, it may be necessary to bring an action seeking eviction. The subject matter of the action is a declaration that the lease relationship has come to an end on account of a compelling reason, together with the vacating of the leased property. For the claim to be granted, both the existence of the compelling reason and the fact that the termination was carried out in accordance with the proper procedure must be established.
In actions of this kind, scrupulous compliance with the rules of procedure directly affects the outcome. Correctly identifying the court with subject-matter jurisdiction and the court with territorial jurisdiction, submitting the evidence to the file in time and managing the process properly may be decisive for the fate of the action.
Subject-Matter and Territorial Jurisdiction
In terms of subject-matter jurisdiction, the Civil Court of Peace is competent; the resolution of disputes arising from lease relationships is generally left to this court. Since eviction claims based on a compelling reason likewise concern a declaration that the lease agreement has come to an end and the vacating of the leased property, they are subject to the same rule of jurisdiction.
As regards territorial jurisdiction, the rule is the court of the place where the leased property is situated. This jurisdiction is exclusive in nature; it cannot be altered even if the parties agree otherwise. If the action is brought in the wrong place, a decision of lack of jurisdiction will follow and the process will be prolonged.
Burden of Proof and Evidence
The party seeking eviction in reliance on a compelling reason bears the burden of proving the fact relied upon. It must be shown by concrete evidence that the extraordinary situation rendering the continuation of the lease relationship unbearable genuinely occurred; abstract allegations or personal assessments are as a rule not regarded as sufficient.
Official documents and correspondence between the parties, medical reports, police records and the records of municipal and other administrative bodies may be used as means of proof. To these are added witness statements, photographs and video recordings and, where necessary, an examination by a court-appointed expert. The court decides whether a compelling reason exists by assessing the evidence in the file as a whole.
Avenues of Appeal
The judgments given in these actions are, as in other lease disputes, open to review through the avenues of appeal. After service of the first-instance judgment, the parties may lodge an appeal within the period indicated in the statute.
If the decision given on appeal exceeds certain monetary thresholds, an appeal on points of law may also be pursued. It should be borne in mind, on the other hand, that eviction judgments may be enforced before becoming final; for that reason, applying for a stay of execution (suspension of enforcement based on a judgment) during the process is of particular importance.
Independent Legal’s Assessment
Termination for a compelling reason is one of the routes to eviction in lease law on which it is most difficult to obtain a result. The threshold applied by the courts is high, and the most frequent reason for a claim being dismissed is that the fact put forward does not meet the criterion of gravity. A realistic assessment made before entering the process therefore not only saves time and cost; it also limits the risk of facing a compensation claim from the other party.
The second critical point is procedure. Even where a compelling reason genuinely exists, failure to observe the notice period or the omission of the mediation stage may on its own change the outcome. In practice, the cases in which a strong file on the merits is lost because of a procedural error are not few in number.
In a concrete dispute we recommend that the following points be clarified as a matter of priority:
- Establishing from the outset whether the fact put forward is a temporary difficulty or an extraordinary situation showing continuity
- Giving the notice of termination in writing, stating the ground relied upon clearly in the notice and making service capable of proof
- Calculating correctly on the calendar the three-month notice period and the rule as to the end of the six-month term under Art. 329 of the Turkish Code of Obligations No. 6098
- Completing the mandatory mediation process in accordance with the proper procedure before the action is brought
- Analysing in advance the risk of compensation that the other party may claim, taking into account the allocation of fault and the remaining term of the agreement
- Planning for the possibility of a stay of execution, bearing in mind that an eviction judgment may be enforced before becoming final
Independent Legal provides advisory services and conducts litigation at every stage of the process in disputes arising from lease relationships, from the preparation of the notice of termination to the enforcement of the eviction judgment.