A lease, which imposes reciprocal obligations on the parties, is in most cases a continuing relationship spread over years. Over that period the expectations of the parties, the manner in which the property is used or the prevailing economic conditions may change; as a result, the question arises of revisiting the rent, updating the rules governing use or inserting new clauses into the text. The subsequent reshaping of the contract must not, however, be thought of as a free field in which the parties may act as they please.
The legislature has drawn a clear boundary around this field. Article 343 of the Turkish Code of Obligations No. 6098 treats subsequent stipulations that worsen the tenant’s position as void as a rule; it restricts, in mandatory terms, any intervention other than the redetermination of the rent.
In this briefing note we assess, within the framework of the legislation and settled practice, which stipulations may produce legal effect while a lease is running, the statutory thresholds that cannot be crossed even by agreement between the parties, and the position that arises where a stipulation is invalid.
The Legal Basis for Amending the Contract
A lease comes into being through the parties’ corresponding declarations of intent and finds its foundation in the principle of freedom of contract. That freedom, which applies at the moment the relationship is formed, as a rule continues to exist while the contract is in force: the parties may by agreement redetermine the rent, alter the conditions governing use or insert additional clauses into the text. What is decisive is that the resulting stipulation rests on the common intention of both parties.
Even so, freedom is not absolute in the law of lease. In leases of residential and roofed commercial premises in particular, mandatory rules protecting the weaker party to the relationship come into play and narrow the parties’ power to stipulate.
The Limit Drawn by Article 343 of the Turkish Code of Obligations
The legislature has imposed an express prohibition on subsequent interventions in a lease:
Turkish Code of Obligations No. 6098, Art. 343
"In lease agreements, no amendment may be made to the detriment of the tenant, save for the determination of the rent."
Because of its mandatory character, the provision cannot be set aside by agreement between the parties. Accordingly, placing on the tenant a burden that did not exist at the outset of the contract, or aggravating the tenant’s existing obligations, produces no legal effect as a rule. The purpose behind the provision is plain: the protection of the party who occupies the more fragile position in the lease relationship, both economically and legally.
The Balance Between Freedom and Protection
The general rule is that the parties determine the content of the contract by their own intentions and, where necessary, renew it by agreement. In the law of lease, however, that general rule is read together with the protective provisions that safeguard the tenant.
It is therefore not enough for an amendment to rest on mutual consent if it is to stand; its content must also be compatible with the protective framework laid down by the statute. Stipulations that impose an additional financial burden on the tenant, aggravate existing obligations or shift the balance between the parties to the tenant’s disadvantage may be regarded as void even where they have been signed.
Which Amendments May Be Made by Agreement?
Although there are stipulations that may be made within the scope of freedom of contract, they must not conflict with mandatory provisions or with the rules protecting the tenant. Put differently, whether a stipulation can acquire legal existence depends on its not producing an aggravating result for the tenant and on its not extending beyond the statutory framework.
Redetermination of the Rent by Mutual Agreement
While the relationship is running, the parties may by agreement redetermine the rent. That determination may be in the direction of an increase, but it may equally take the form of a reduction. Where an increase is in question, the limits on increases laid down in the Turkish Code of Obligations No. 6098 must be observed.
Altering the Purpose of Use
The purpose for which the property is to be used is among the defining elements of the lease relationship, and that purpose may be changed by agreement between the parties. The conversion of premises let as a residence into commercial premises, or the allocation of a place already used as commercial premises to a different commercial activity, may be reflected in the contract provided the parties decide upon it together.
Extending or Shortening the Term
The term of the lease may also be extended by mutual agreement; under certain conditions it may likewise be shortened. In practice extension of the term is frequently encountered and is generally given effect by drawing up a supplementary protocol or by concluding a new contract.
Shortening the term or bringing the relationship to an end prematurely, by contrast, requires the express and mutual intention of the parties. Stipulations that unilaterally narrow the tenant’s position, or that seek to shorten the term or terminate the relationship early, may be treated as invalid on account of the protective provisions.
Allocation of Ancillary Costs and Expenses
Which expense is to be borne by which party may be agreed between the parties, and the stipulation on that point may subsequently be changed.
It is not possible, however, to transfer to the tenant those items which by law fall to the landlord. Clauses providing for expenditure directed at the extensive repair, structural renewal or improvement in value of the property to be loaded onto the tenant produce no legal effect, even where they have been written into the contract.
How Is an Amendment Put into Effect?
In practice, stipulations of this kind are generally given effect by signing a supplementary protocol or by concluding a new contract. Even so, agreement between the parties is not on its own sufficient for the stipulation to stand; the resulting text must not conflict with mandatory rules and statutory limits. For that reason, in assessing legal validity content is as decisive as form.
Concurrence of the Parties’ Intentions
The first and indispensable condition of an amendment is that the parties have reached agreement upon it. That agreement may arise under different headings, such as the redetermination of the rent, the fixing of conditions of use or the insertion of new clauses into the text.
A request by one party alone, or a unilateral declaration of intent, is not capable of transforming the terms of the contract. For a stipulation to be binding, both parties must demonstrate clearly that they have adopted the amendment.
Recording the Supplementary Protocol in Writing
Reducing the stipulation to writing is of great importance in practice, since it makes proof easier. For that reason, where the contract is amended, it is advisable to record the new arrangement in a written supplementary protocol.
Although the statute does not require written form for every amendment, establishing clearly the matters agreed upon and supporting them with a document bearing the signatures of both parties is valuable in forestalling disputes that may arise later.
Conditions Required for Validity
Whether an amendment can produce legal effect depends, in addition to its resting on mutual intention, on its not conflicting with mandatory provisions. Clauses that introduce new obligations for the tenant or aggravate existing ones may remain void even where they have been agreed.
Accordingly, when the validity of an amendment is in issue, the content of the stipulation, the intention of the parties and conformity with the statutory limits must be considered together.
Which Amendments May Not Be Made?
Although the parties may by agreement recast the contract, that power has a limit. Because mandatory provisions protecting the tenant apply in leases of residential and roofed commercial premises, stipulations that produce a result to the tenant’s detriment or that exceed the statutory threshold are regarded as invalid even where they have been signed.
Imposing New Obligations on the Tenant
The subsequent imposition on the tenant of an obligation that did not exist at the outset of the contract is void as a rule if it produces a result to the tenant’s detriment. Introducing additional payment obligations for the tenant while the relationship is running, or enlarging existing obligations, may conflict with the mandatory rules protecting the tenant.
For that reason, whether stipulations made subsequently aggravate the tenant’s financial or legal position must be examined with care. Clauses that plainly load a burden onto the tenant may produce no legal effect even where they have been adopted by the parties.
Agreeing an Increase Above the Statutory Ceiling
An increase in the rent is possible; the increase must not, however, exceed the limit drawn in the statute. In leases of residential and roofed commercial premises, agreeing a rate beyond the upper limit laid down for increases in the Turkish Code of Obligations No. 6098 is regarded as invalid.
Even where the parties have agreed on the point, a stipulation providing for an increase above the statutory ceiling does not acquire binding force. Clauses of that kind take effect only within the limit permitted by the statute. For detailed information on the subject, our study entitled How Is the Rent Increase Rate Determined? may be consulted.
Stipulating a Penalty Clause Against the Tenant
The insertion into the contract of provisions in the nature of a penalty clause operating against the tenant is likewise restricted by law. Attaching an excessive penalty to late payment of the rent, or introducing additional financial sanctions for the tenant beyond the ordinary obligations, may conflict with the protective provisions. For a fuller assessment under this heading, our article entitled The Prohibition of Penalty Clauses Against the Tenant may be examined.
Supplementary Agreements Against the Tenant
Supplementary contracts or supplementary protocols that produce a result to the tenant’s detriment are likewise not regarded as legally valid.
For that reason, whether clauses appended to the contract at a later stage create an adverse result for the tenant must be scrutinised carefully. Supplementary texts that narrow the tenant’s rights or aggravate the tenant’s obligations do not acquire legal validity even where they have been signed.
The Consequences of Invalidity
Stipulations made contrary to the statute produce no effect even where they have been adopted by the parties. Clauses that introduce new obligations for the tenant or exceed the statutory threshold are regarded as invalid because they conflict with the mandatory provisions of the Turkish Code of Obligations No. 6098. Invalidity here affects not the contract as a whole but only the provision that is contrary to the statute.
The Clause Being Void from the Outset
An amendment contrary to the statute is void from the moment it is made. In other words, a clause of that kind is treated as though it had never been formed and creates no binding result for the parties.
It is therefore not possible for the landlord to demand an additional payment from the tenant, or to enlarge the tenant’s obligations, in reliance on a void clause. Nor does the fact that the clause has in fact been applied render it valid after the event.
Filling the Gap with the Statutory Rule
Where a clause amending the contract is held invalid, its place is taken by the arrangement provided for in the statute. That outcome takes on particular importance under headings such as the rate of increase, liability for expenses and penalty clauses.
Where, for example, a rate of increase beyond the statutory limit has been agreed, the clause does not fall away in its entirety; only the part exceeding the limit is regarded as invalid and the increase is applied to the extent permitted by the statute. This approach seeks both to preserve the continuity of the lease relationship and to keep the legal balance between the parties intact.
Recovery of Amounts Paid in Excess
Where an excess sum has been collected from the tenant in reliance on a void clause, the tenant may seek the return of that sum. The claim may be advanced on the basis of the provisions on unjust enrichment.
Recovery of overpayments made by reason of an invalid stipulation is possible. The tenant may claim the return of the excess paid and, where the conditions are met, may commence enforcement proceedings or bring an action. It is precisely for this reason that examining the legal validity of amendments to the contract with care at the outset is important in preventing disputes that may arise later.
Independent Legal’s Assessment
In practice, requests to amend a contract are most often raised in relation to the rent; yet a significant proportion of disputes arise not from the rent but from the expense, penalty and undertaking clauses placed in a supplementary protocol. The legal fate of such clauses depends not on the presence of a signature but on the compatibility of their content with the mandatory rules. For that reason, what should be examined is not the heading of the text but how it affects the balance of obligations between the parties.
In assessing a stipulation to be made in a lease relationship, it is useful to give priority to the following matters:
- Establishing concretely whether the stipulation aggravates the tenant’s financial and legal position
- Verifying by calculation whether the rent increase remains within the statutory upper limit
- Distinguishing, by reference to the nature of the expense items, which party bears them by law
- Recording the amendment in a written supplementary protocol bearing the signatures of the parties
- Advancing any claim for the return of overpayments made in reliance on a void clause in good time
- Reviewing provisions in the nature of penalty clauses and undertakings as a separate heading
Independent Legal provides advisory and litigation services throughout the whole of the process in disputes arising from lease relationships, from the review of contract and supplementary protocol texts to the pursuit of restitution claims based on invalidity.