The tenant’s act of leaving the leased property, in whole or in part, to the use of another person is regulated in Turkish law under the heading of sub-leasing and transfer of the right of use. Article 322 of the Turkish Code of Obligations No. 6098 makes this transaction, in leases of residential and roofed workplace property, conditional upon the landlord’s consent; where consent is present, it permits the tenant to lease the property to a third party or to leave the power of use to that party. Where this route is taken, the tenant party to the lease relationship does not change; the agreement concluded with the landlord remains in force as it stands and the tenant’s obligations arising from that agreement continue.
In practice this institution is frequently confused with the assignment of the lease agreement; the legal consequences of the two, however, diverge fundamentally.
Below we examine the legal nature of the sub-lease and of the transfer of the right of use, the conditions required for either to be validly established, the limits of the landlord’s power of consent, the consequences that use permitted without authorisation produces for the parties, and whether it constitutes a ground of eviction.
What Do Sub-Leasing and Transfer of the Right of Use Mean?
The tenant’s act of leaving the leased property, wholly or in part, to the use of another person is characterised as a sub-lease or as a transfer of the right of use. Under Art. 322 of the Turkish Code of Obligations No. 6098 the tenant may, as a rule and provided that the landlord’s consent is obtained, lease the property to a third party or convey the power of use to that party. In such a case the tenant under the lease relationship has not changed; the agreement signed with the landlord subsists and the tenant remains liable for the obligations arising from that agreement.
This is precisely the point at which the sub-lease departs from the assignment of the lease agreement: a sub-lease creates no change in the parties to the relationship. No direct contractual bond arises between the third party who actually uses the property and the landlord; the principal debtor facing the landlord remains the tenant.
The Concept of the Sub-Lease
A sub-lease is the tenant’s leasing of the whole or a part of the leased property to a third party and the establishment of a separate lease agreement with that party. A lease relationship standing on its own thus arises between the tenant and the sub-tenant; the principal agreement between the tenant and the landlord, by contrast, continues to run without alteration.
In a sub-lease relationship the position is as follows:
- The sub-tenant who actually uses the property has obtained that power from the tenant and not from the landlord.
- The tenant’s status as a party to the agreement vis-à-vis the landlord continues.
- The landlord directs claims arising from the agreement to the tenant directly.
- As regards the landlord, the legal addressee of the sub-tenant’s conduct and behaviour remains the tenant.
The Distinction Between a Sub-Lease and Assignment of the Lease Agreement
Although these two transactions are used interchangeably in practice, they produce different consequences in law. The essential distinction lies in whether or not a change occurs in the tenant party to the lease relationship.
Where a sub-lease is in question:
- The tenant party to the agreement remains the same person.
- The bond between the landlord and the tenant is not interrupted.
- The sub-tenant has obtained the power to use the property from the tenant.
- The landlord’s addressee does not change; liability rests with the tenant.
Where the lease agreement is assigned, on the other hand:
- The status of tenant passes in its entirety to another person.
- The assignee establishes a direct contractual bond with the landlord.
- The assigning tenant leaves the agreement; his liability may nonetheless continue for the period prescribed by the law.
In short, a sub-lease consists in the leaving of the leased property to another person’s use; the assignment of the agreement, by contrast, is a transaction which alters the structure of the parties to the lease relationship.
On What Conditions May a Sub-Lease or Transfer of Use Be Made?
Art. 322 of the Turkish Code of Obligations No. 6098 makes the establishment of a sub-lease and the conveyance of the right of use subject to certain conditions. The legislator has not prohibited outright the tenant’s allowing a third party to use the leased property, but, having regard to the landlord’s interests, has made the transaction subject to a requirement of consent.
The rule as regards a sub-lease or a transfer of the right of use is therefore that the landlord’s consent must be present and that the use in question must not run counter to the terms of the agreement. Otherwise, leaving the leased property to a third party may be regarded as a breach of the agreement and may give the landlord the opportunity to seek termination and eviction.
For the transaction to be accepted as valid, the following conditions are generally required:
- That the use does not extend beyond the purpose determined by the parties in the agreement
- That the landlord’s approval has been obtained in written form
- That no damage is caused to the structural order or to the character of the leased property
- That no situation arises which would result in a breach of the lease agreement
Is the Landlord’s Permission Required?
Art. 322 of the Turkish Code of Obligations No. 6098 lays down two regimes which differ from one another according to the type of lease as regards allowing a third party to use the leased property.
In leases of residential and roofed workplace property a more protective line has been adopted; the tenant’s ability to lease the property to another person or to convey the power of use to that person is made conditional upon the landlord’s written consent. In these types of lease it is not possible to establish a sub-lease relationship or to transfer the right of use unless a written approval is present.
The position is different in lease relationships falling outside residential and roofed workplace property. In relationships such as the lease of vacant land, of a field or of produce, the tenant may lease or assign the property to another person provided that he does not bring about a change causing detriment to the landlord. Where the agreement contains no provision preventing this, no separate permission need be obtained.
Within this framework, a sub-lease or transfer of the right of use effected without written approval in leases of residential and roofed workplace property:
- Bears the character of a breach of the lease agreement.
- May afford the landlord the opportunity to bring the agreement to an end.
- May, where the conditions are met, lead to a demand that the leased property be vacated.
For this reason the tenant must obtain the landlord’s approval before leaving the leased property to the use of a third party and must ensure that this approval is documented in writing.
Permission Given Expressly or Tacitly
The landlord’s consent may be manifested by an express declaration and may also, in certain exceptional cases, be accepted as having been given tacitly. Since the law requires writing in respect of leases of residential and roofed workplace property, however, the acceptance of tacit consent remains within a narrow compass.
At this stage the rule of good faith, that is to say Article 2 of the Turkish Civil Code No. 4721, may come into play. Where the landlord’s conduct reaches the level of an abuse of right, it may be concluded that consent exists even though no written approval is present. Examples of situations capable of forming a basis for this assessment include:
- The landlord having collected rent or expenses from the sub-tenant
- The landlord not having objected for a considerable time despite being aware of the sub-tenant’s presence
- The text of the agreement having expressly provided that sub-leasing is permitted
- The landlord continuing to tolerate the sub-tenant’s actual use
Nevertheless, the fact that the leased property is being used by a third party does not by itself prove the existence of consent. Whether consent is present is examined separately in each dispute.
A Prohibition on Sub-Leasing Stipulated in the Agreement
The parties may insert into the lease agreement a provision prohibiting the establishment of a sub-lease or the conveyance of the right of use. Where such a clause is present, the tenant’s leaving of the leased property to another person’s use constitutes a plain breach of the agreement.
Where the agreement contains a prohibition to this effect:
- No sub-lease relationship may be established unless the landlord grants a separate permission.
- Allowing a third party to use the leased property is regarded directly as a breach of the agreement.
- The landlord may seek termination and eviction on the basis of this breach.
For this reason, a careful review of the clauses relating to sub-leasing and to the transfer of the right of use at the time the agreement is signed is decisive in preventing disputes that may arise later.
The Allocation of Liability in a Sub-Lease Relationship
In the structure in which the principal lease agreement and the sub-lease agreement coexist there are three persons: the lessor, the tenant and the sub-tenant. The person occupying the position of tenant under the principal agreement assumes the role of lessor under the sub-lease agreement. Although the sub-lease agreement is a transaction independent of the principal agreement, rights of the lessor directed at this relationship may arise in certain cases.
The Continuation of the Tenant’s Contractual Liability
The establishment of a sub-lease relationship does not extinguish the tenant’s obligations arising from the principal agreement. Even though he has allowed another person to use the leased property, the tenant continues to be a party to the agreement vis-à-vis the landlord and is bound to perform all of his obligations.
The tenant’s continuing liability may be summarised as follows:
- Payment of the rent in due time falls to the tenant.
- It is the tenant’s duty to ensure that the leased property is used in conformity with the agreement.
- Preserving the leased property from damage likewise falls within the tenant’s obligations.
- As regards the sub-tenant’s acts, the landlord’s addressee continues to be the tenant.
The Sub-Tenant’s Position Towards the Landlord
Since no lease agreement directly binding the landlord and the sub-tenant is established, the sub-tenant does not have the status of principal debtor vis-à-vis the landlord. The damage caused by the sub-tenant in the course of use, or conduct on his part contrary to the agreement, may on the other hand indirectly affect the landlord’s rights.
The sub-tenant’s liability towards the landlord, though limited, cannot therefore be disregarded altogether.
This liability may take the following forms:
- A sub-tenant who damages the leased property may be held personally liable for that damage.
- The landlord may seek redress for the damage from the tenant and may likewise, within the framework of the general provisions, proceed against the sub-tenant.
- The sub-tenant may not use the leased property in a manner contrary to the law or to the agreement.
Accordingly, the sub-tenant is obliged to act in conformity with the law and with the agreement when using the leased property, even though he is not in a direct contractual bond with the landlord.
Use of the Leased Property Otherwise Than for Its Allotted Purpose
Use of the leased property by the sub-tenant otherwise than for the purpose determined in the agreement constitutes a breach of the agreement and may give the landlord the right to seek termination and eviction. In such a case the landlord may grant the tenant a period in which to bring the breach to an end; if the non-conforming use continues, he may terminate the agreement.
Examples of use contrary to the purpose include:
- The opening to commercial activity of premises allotted for residential use
- The carrying on of an activity outside the business defined in the agreement
- The conduct of work giving rise to noise, odour or danger disturbing the surrounding environment
- The carrying on of the business contrary to the licensing regime or to the legislation
As will be seen, the manner of the sub-tenant’s use is a factor directly affecting not only the sub-lease relationship but also the principal lease agreement.
The Consequences of a Sub-Lease or Transfer Made Without Permission
Leasing the property to a third party, or leaving the power of use to that party, without the landlord’s consent constitutes a breach of the agreement under Art. 322 of the Turkish Code of Obligations No. 6098. In such a case the landlord may seek to have the breach brought to an end and may also, where the conditions are met, have the right to terminate the agreement and to demand that the leased property be vacated.
Allowing use without permission does not merely result in a breach of the agreement; it may also give rise to an obligation to pay damages on the part of the tenant.
Breach of the Agreement and the Right of Termination
The establishment of a sub-lease, or the conveyance of the power of use, without approval constitutes a breach of the lease agreement. In this case the landlord may grant the tenant an appropriate period in which to remove the breach; if the position has not been rectified at the end of that period, he may bring the agreement to an end.
For the power of termination to be exercised:
- A sub-lease relationship must have been established, or the right of use must have changed hands, in the absence of consent.
- The transaction in question must bear the character of a breach of the lease agreement.
- The tenant must have been given a period of 30 days in which to remove the breach.
- The non-conforming situation must be continuing although that period has elapsed.
are the conditions required.
The Arising of a Ground of Eviction
Since the establishment of a sub-lease, or the conveyance of the right of use, without permission constitutes a breach of the agreement, it may form a ground of eviction. In particular, where the leased property begins to be used by a third party without the landlord’s knowledge and approval, the landlord may, together with the termination of the agreement, demand that the leased property be vacated.
In this event the course open to the landlord is to bring an eviction action based on breach of the agreement.
The Obligation to Pay Damages
Where the tenant’s establishment of a sub-lease or transfer of the right of use without permission has caused the landlord loss, a liability in damages may arise on the tenant’s part. The loss may manifest itself in the form of damage to the leased property, the shaking of trust in the lease relationship, or economic detriment suffered by the landlord.
The situations in which liability in damages may arise are as follows:
- The use being effected contrary to the terms of the agreement
- The leased property suffering damage in the hands of the third party
- The lease relationship having to come to an end by reason of the breach
- A diminution occurring in the landlord’s assets
As will be seen, a sub-lease or transfer of the right of use made without permission is, for the tenant, a source not only of the risk of eviction but also of liability capable of producing financial consequences.
Related Articles
Other lease law topics connected with sub-leasing and the transfer of the right of use may be reached below:
- May a Lease Agreement Be Assigned?
- May a Commercial Lease Agreement Be Assigned?
- Termination of a Lease Agreement for Compelling Reasons and Eviction
- Grounds for the Eviction of a Tenant and Eviction Actions
- How Is a Lease Agreement Drawn Up?
Independent Legal Assessment
A significant proportion of sub-lease disputes stems from the parties characterising the transaction wrongly from the outset. Since the word “assignment” is used loosely in everyday language, an arrangement which in reality bears the character of a sub-lease may be taken for an assignment of the agreement. This slippage in characterisation affects every consequence, from whom the landlord is to proceed against to when the tenant’s liability comes to an end.
The second area of risk is the requirement of writing. Approvals given orally, or later asserted to have been given orally, leave the tenant facing difficulties of proof when a dispute arises. Although the landlord’s silence is assessed through the rule of good faith in some files, this is an exceptional protection.
The points to be brought to the fore in a concrete file are as follows:
- Clarifying in law whether the transaction effected is a sub-lease or an assignment of the agreement
- Obtaining the landlord’s approval in writing and expressly limiting its scope in the text
- Defining in the sub-lease agreement, consistently with the principal agreement, the purpose for which the leased property is to be used
- Checking before signature whether the agreement contains a prohibition on sub-leasing
- Starting the 30-day period to be granted for removal of the breach by a notice in due form
- Regulating by agreement the internal relationship between the tenant and the sub-tenant as regards loss that may arise from the sub-tenant’s use
Independent Legal provides legal advice and litigation services in lease relationships, from the drafting of sub-lease agreements to the conduct of termination and eviction proceedings based on allowing use without permission.