Regular expenditure is required if the areas used by everyone in apartment buildings and housing estates are to be kept in working order. The concept of service charges and common expenses denotes precisely those payments that meet this operating need. Since these items are a natural extension of the day-to-day use of the property, the person expected in principle to bear them is the one who actually uses the independent unit.
On the other hand, not every item of expenditure incurred in a building falls within this definition. Works such as overhauling the roof, completely renewing the façade, dismantling the lift and installing a new one, or strengthening the structure are not a matter for the day-to-day operating budget. These items are extensive interventions aimed at keeping the structure standing, extending its economic life or increasing its value, and in law their burden lies with the owner of the property.
Below, we examine which items of expenditure may be sought from the tenant and which remain with the owner, within the framework of the Condominium Ownership Act No. 634 and the criteria settled in judicial practice.
The Distinction Between Ordinary Common Expenses and Extensive Repair Costs
Common expenses are items of expenditure that recur at particular intervals in order to maintain the day-to-day functioning of the building. Cleaning of the building, security services, the caretaker’s wages, routine maintenance of the lift, electricity and water consumption in the common areas and the cost of fuel are typical examples of this group. Since these items are regarded as ordinary expenses directly connected with the use of the leased property, they remain, as a rule, with the tenant.
Major repair and renewal costs, by contrast, rest on a different logic. These are wide-ranging works directed at preserving the structure, at the soundness of its load-bearing and structural elements, or at increasing its economic value. Application of thermal insulation, renewal of the façade, complete replacement of the lift, rebuilding of the roof or strengthening of the building fall within this group. Since such expenditure forms part of the owner’s duty of investment and preservation, it is in principle borne by the landlord.
Expense Items Borne by the Tenant
Because the party who actually uses the independent unit is the tenant, the burden of bearing the ordinary expenditure arising from the day-to-day use of the property also falls on the tenant. This liability covers the items that ensure the operation of the building and the orderly functioning of the common areas. The settled understanding adopted in Turkish law is that expenses arising from use belong to the tenant; service charges and similar periodic payments are accordingly counted, as a rule, among the items to be met by the tenant.
The decisive question here is the following: does the expenditure serve the day-to-day use of the property or its structural integrity? Items that recur at regular intervals and enable the continuation of use are left to the tenant, whereas expenditure aimed at preserving or renewing the structure or increasing its value is entered in the landlord’s account.
The Scope of the Service Charge Obligation
The service charge is a payment determined by the management and collected at particular intervals in order to finance the common expenses. Since the tenant is the person using the independent unit, the tenant is liable for those service charge items relating to the day-to-day operation of the building. For that reason, even where the lease agreement contains no clause on the subject, payment of the ordinary service charge by the tenant is a solution generally accepted in practice.
It must nevertheless be emphasised in particular that not every sum demanded under the heading of the service charge may be imposed on the tenant. Even where an item of expenditure has been included in the service charge, it cannot be sought from the tenant if by its nature it is an extensive repair or renewal cost. The criterion taken as the basis in determining liability is not the name the item bears but its nature.
Caretaker, Cleaning and Security Service Charges
The cleaning services, caretaker’s wages and security service charges provided so that life in the apartment building or housing estate runs without interruption are items relating to the day-to-day use of the common areas. This expenditure recurs regularly and is of a nature that directly determines the usability of the property.
These items are therefore, as a rule, among the expenses to be met by the tenant. Given that the party benefiting from these services throughout the period of use of the leased property is the tenant, bearing their cost is the counterpart of that benefit.
Lift Operation and Common Electricity and Water Consumption
The maintenance and operating costs incurred to keep the lift in working order, together with the electricity and water charges for the common areas, also fall within the tenant’s sphere of obligation. Maintenance of the lift carried out at particular intervals, lighting of stairways and corridors and water consumption for common use are characterised as ordinary items arising from day-to-day use.
By contrast, the complete dismantling and renewal of the lift, or its passing through an extensive overhaul, is not regarded as routine maintenance; such work is treated as a major repair and renewal cost. The addressee of expenditure of this kind is not the tenant but the landlord.
Heating and Common Area Operating Costs
In buildings served by central heating, the cost of fuel, the maintenance costs of the boiler and the expenditure relating to the heating of the common areas are counted among the items linked to day-to-day use. It is accordingly common practice in buildings heated by a central system for the fuel cost to be met by the tenant.
Lighting, cleaning and operating expenditure arising from the use of the common areas is likewise assessed, on the same logic, as falling within the tenant’s sphere of liability.
Other Items Arising from Daily Use
The basic feature distinguishing the expenditure for which the tenant is liable is that it arises from the day-to-day use of the property and recurs at particular intervals. Small-scale maintenance and operating costs, purchases of consumables and payments made so that the common areas can provide their services routinely belong, within this framework, to the tenant.
To sum up, ordinary items arising regularly in connection with use are the obligation of the tenant, whereas extensive expenditure directed at the integrity or economic value of the structure is the obligation of the landlord. This is the basic criterion resorted to in practice when determining to whom liability belongs.
Expense Items Borne by the Owner
Since the landlord is at the same time the owner of the property, the duty of preserving the structure, maintaining its structural soundness and keeping it in usable condition lies with the landlord as a requirement of the right of ownership. Expenditure directed at preserving or increasing the value of the property is therefore left, as a rule, to the owner. These items arise not from the day-to-day use of the leased property but from the need for the structure to continue in existence and not to lose its economic value.
The most distinctive feature identifying the expenditure that falls within the landlord’s liability is that it is not regarded as ordinary maintenance and operating expenditure and that it generally requires an extensive intervention producing long-term results. The application of thermal insulation, renewal of the roof, repair of the façade, complete replacement of the lift or strengthening of the building are among the works assessed within this scope.
Extensive Repair Costs
Major repair costs are wide-ranging payments directed at preserving the integrity of the structure or at renewing its severely worn elements. Even though works of this kind are necessary for the property to be used normally, they do not arise as a result of day-to-day use.
Rebuilding the roof, repairing the façade or applying thermal insulation, completely replacing the lift, and renewing the water or electrical installation from beginning to end may be given as examples of this group. Since such expenditure serves the preservation and long-term use of the structure, it cannot be left to the tenant; meeting it therefore falls, as a rule, to the landlord.
Permanent Improvements and Value-Enhancing Investments
Payments that increase the value of the property or confer a permanent improvement on it are also the landlord’s liability. The distinguishing aspect of these items is that, beyond remedying an existing defect, they enhance the quality of the structure or extend the possibilities of its use.
Adding a lift to the building at a later stage, installing a car park or a security system, renewing the common areas from top to bottom, or adding a new facility to the property are examples of value-enhancing expenditure of a permanent nature. These payments cannot be sought from the tenant, because the economic value that arises is permanently established directly in the owner’s favour and has the character of an investment attached to ownership.
The Consequences of Non-Payment of Service Charges
Where service charges and common expenses are not paid, the management of the apartment building or housing estate has the possibility of resorting directly to legal remedies in order to obtain what it is owed.
Article 22 of the Condominium Ownership Act No. 634 holds the condominium owner and the tenant (or other users) actually using the independent unit jointly and severally liable for debts in respect of service charges and common expenses. By virtue of this provision the management may claim what it is owed from the owner, from the tenant, or from both together; it may likewise commence enforcement proceedings against both of them.
Since in practice the person using the independent unit is mostly the tenant, enforcement proceedings are seen to be directed predominantly at the tenant. The owner’s liability does not thereby disappear, however; the management may freely determine which of the debtors it will pursue.
Where no payment is made, enforcement proceedings may be commenced against the debtor, the attachment stage may be reached and the debt may be collected by way of compulsory enforcement. In this respect the service charge debt is an obligation producing concrete legal and financial consequences for both the tenant and the condominium owner.
The Management’s Freedom to Choose the Addressee
Under Article 22 of the Condominium Ownership Act No. 634, the management may direct its claim for service charges and common expenses at the condominium owner, at the tenant or at both of them together, and may commence enforcement proceedings against them.
Although in practice the proceedings are often conducted against the tenant, there is no obstacle to the management applying directly to the owner. No restriction has been imposed on the management in this regard; what exists is a power of election.
The Owner’s Right of Recourse Against the Tenant
Where the owner has been obliged to make payment because of a tenant who has failed to pay the service charges and common expenses falling to the tenant under the lease agreement or under statutory provisions, the owner may claim back the sum paid from the tenant. This right of claim is a consequence of the tenant’s conduct in breach of the agreement.
Where an item that ought to belong to the tenant is met by the owner, the owner may demand that sum from the tenant. That claim may be asserted together with the claim for rent, and it may equally form the subject of a separate action for debt or of enforcement proceedings.
Who May Commence Enforcement Proceedings
Since claims for common expenses and service charges are by their nature monetary debts, the management of the apartment building or housing estate may proceed directly to enforcement where no payment is made. Under the rule of joint and several liability, these proceedings may be directed at the condominium owner, at the tenant or at both of them together.
Since, if no payment is made, the proceedings may become final and reach the attachment stage, performing the service charge obligation in good time is important in order to protect the parties from legal and financial risks.
Is Non-Payment of Service Charges a Ground for Eviction?
The failure of the tenant to make payments of common expenses and service charges may result in a breach of the lease agreement. Where it has been expressly agreed in the agreement that these items are to belong to the tenant, neglect of that obligation may place the tenant in default.
In such a case the landlord may send a written warning notice requesting payment of the debt. If payment is not made within the period allowed, the way is opened to terminating the agreement and, where the conditions are met, requesting that the leased property be vacated. Persistent failure to pay the debt can in practice be put forward as a ground for eviction.
Related Articles
Disputes arising from common expenses can be decisive both in terms of the condominium ownership relationship and in terms of the rights and obligations arising from the lease agreement. The headings that complement the subject are the following:
- What Is Condominium Ownership?
- What Is a Management Plan?
- Objecting to an Excessive Service Charge
- The Assembly of Condominium Owners: Meeting and Decision-Making Procedure
- Grounds for Eviction and Eviction Actions
Independent Legal’s Assessment
In service charge disputes the real subject of the argument is most often not whether payment has been made but which category the expenditure falls into. It is a widespread practice for managements to collect the cost of extensive renewals by spreading it over the monthly service charge; the fact that a sum appears on a service charge receipt does not, however, automatically make it the tenant’s debt. In the event of a dispute the first thing to be done is therefore to characterise the items one by one on the basis of the operating budget and the decisions of the assembly of condominium owners.
The second critical point is that the joint and several liability in Art. 22 of the Condominium Ownership Act No. 634 belongs to the external relationship between the management and the users. The fact that the management may apply to the tenant does not mean that the debt belongs to the tenant in the internal relationship as well. The tenant is in a position to claim back an item collected from the tenant that by its nature falls to the owner.
The headings that need to be reviewed in a concrete file are the following:
- Breaking down the service charge item so that the operating expenditure and the renewal share are separated from one another
- Establishing whether the lease agreement contains a specific provision on common expenses
- Examining the minutes of the assembly of condominium owners at which the extensive repair was decided upon, together with the operating budget
- Determining separately the addressee of the proceedings commenced by the management and the party to whom the debt belongs in the internal relationship
- Keeping the payment documents that will form the basis of a claim for recourse in an orderly manner from the outset
- Drawing up the warning notice in accordance with the proper procedure where eviction is to be pursued on the basis of default in service charges
Independent Legal provides legal advisory services and conducts litigation in disputes over common expenses arising from condominium ownership and lease relationships, from the characterisation of expense items to the conduct of enforcement and eviction proceedings.