A lease agreement is an obligational relationship under which the use of an immovable property or of an object is left to the tenant and, in return, an undertaking is given to pay a specified sum. Governed by the Turkish Code of Obligations No. 6098, this contract type is one of the legal relationships most frequently relied upon in daily life, and it forms the framework of the parties’ reciprocal rights and obligations in residential and workplace leases.
For the agreement to produce binding effects, certain basic conditions must be present: the parties must have capacity, the leased property must be determinate and the rent must be agreed. Where these elements are left incomplete or remain uncertain, the date on which the relationship was formed, or indeed whether the agreement is valid at all, may become a matter of dispute.
In this briefing note we examine how a lease agreement is formed, the conditions required for its validity, the essential elements the agreement should contain and the checks that should be carried out before signature, together with examples from practice.
What Is a Lease Agreement?
Under a lease agreement the landlord undertakes to leave to the tenant the possibility of using an immovable property or an object for a specified period, and of deriving benefit from it; the tenant, in return, undertakes to pay a sum of money. Determining the rights and obligations of the parties in residential and workplace leases, this fundamental relationship is one of the most widespread contract types in practice.
For the purposes of the Turkish Code of Obligations No. 6098, a contract is formed by the parties’ mutual and corresponding declarations of intent. Drawing up a written text is not compulsory for its formation; if agreement has been reached on the leased property and on the rent, an oral lease relationship is also legally valid. Conversely, reducing the agreement to writing is of great importance in order to prevent disputes that may arise later and to facilitate proof.
Statutory Definition and Characteristics of the Agreement
Article 299 of the Turkish Code of Obligations No. 6098 defines the lease agreement as follows:
Turkish Code of Obligations No. 6098, Art. 299
"A lease agreement is a contract whereby the landlord undertakes to leave to the tenant the use of a thing, or the use of it together with the benefit derived from it, and the tenant undertakes in return to pay the agreed rent."
Proceeding from this definition, the lease agreement may be described as a contract that imposes obligations on both parties, that involves continuing performance and that is consensual. The agreement of the parties suffices for the contract to come into being; as a rule, the statute does not require any formality for validity. Intent may therefore be expressed explicitly or manifested through implied conduct. Even so, in long-term relationships and in high-value leases, a written text provides an important safeguard protecting the position of the parties.
Types of Lease Agreement
Lease agreements are divided into different groups according to the nature of the leased property and the duration of the relationship. This distinction matters in practice because it produces different consequences under many headings, such as termination of the agreement, increases in the rent and eviction.
Classification by the Nature of the Leased Property
A residential lease agreement arises where an immovable property is left to the tenant in order to meet a housing need. In relationships of this kind, the provisions protecting the tenant apply more extensively.
A workplace lease agreement, by contrast, denotes the leasing of an immovable property for the purpose of carrying on a commercial or professional activity. Certain special rules come into play in this contract type as regards increases in the rent, eviction and the ending of the relationship.
Classification by Duration
A fixed-term lease agreement is one in which the commencement and expiry dates have been expressly determined by the parties. However, the expiry of the term does not mean that the relationship comes to an end of its own accord in residential and roofed workplace leases; unless the conditions laid down in the statute are met, the lease relationship continues.
An open-ended lease agreement is one in which no duration has been agreed for the relationship. In agreements of this kind, either party may bring the relationship to an end by giving notice of termination in accordance with the notice periods laid down in the statute.
Conditions for the Validity of a Lease Agreement
Whether the agreement produces legal effect depends on the general contractual conditions laid down in the Turkish Code of Obligations No. 6098 being satisfied. Where one of these conditions is not met, the agreement may be regarded as invalid or may fail to produce the consequences the parties expect. Capacity, the subject matter of the agreement and the free expression of intent are the principal headings in this respect.
Capacity of the Parties to Act
In order to form a lease relationship, the parties must possess the capacity to enter into legal transactions. Agreements made by persons lacking the capacity of discernment, by minors or by persons under legal restriction are, as a rule, invalid or remain subject to the approval of the legal representative.
In practice, where the owner of the immovable property is a minor, is under guardianship, or where the transaction is carried out on behalf of a company, it must additionally be examined whether the power of representation genuinely exists.
Lawfulness and Morality of the Subject Matter
The subject matter of a lease agreement may not be contrary to law or morality; agreements serving an unlawful purpose are regarded as invalid. For example, leases entered into for the conduct of a prohibited or unlicensed activity, and arrangements pursuing an unlawful purpose of use, do not give rise to a valid lease relationship.
Freedom of the Declarations of Intent
The agreement must have been formed by the free intent of the parties. If one of the parties made its declaration under the influence of mistake, fraud or duress, annulment of the agreement may come into question.
For this reason, situations such as the text being rushed through for signature, false information being given, or agreement being reached under pressure are regarded as capable of affecting the validity of the agreement.
Certainty of the Subject Matter and Terms
For the agreement to be regarded as valid, its essential elements must be clear and determinate. In particular, the questions of which property is leased and how much the rent amounts to must be determinate or determinable.
Where the leased immovable property is not clearly identified, or where no rent has been agreed at all, serious disputes may arise as to whether the agreement has been formed.
Must a Lease Agreement Be Made in Writing?
The Turkish Code of Obligations No. 6098 does not, as a rule, prescribe any formality for the validity of a lease agreement. The agreement may be drawn up in writing or formed orally. The relationship becomes legally valid at the moment agreement is reached on the leased property and on the rent.
Nevertheless, a significant proportion of the disputes encountered in practice rests on the difficulty of proof caused by the absence of a written text. Accordingly, although written form is not a condition of validity, it is of decisive importance in protecting the parties’ rights.
Is an Oral Lease Agreement Valid?
Lease relationships formed orally are legally valid. The fact that the parties have agreed on the lease is sufficient for the agreement to come into being. Even where there is no written text, the relationship is regarded as having been formed and the parties are subject to the rights and obligations arising from it.
In oral relationships, however, matters such as the amount of the rent, the length of the term or any special terms become difficult to prove subsequently. That is precisely why a written agreement is recommended in practice.
Evidentiary Value of a Written Text
A written lease agreement is one of the strongest items of evidence to be relied upon in disputes arising between the parties. Recording in the text such matters as the amount of the rent, the time of payment, the security deposit, ancillary expenses and the length of the term makes the resolution of future disputes markedly easier.
Many of the disagreements encountered in practice stem from the agreement never having been put in writing, or from the terms not having been drafted with sufficient clarity.
Agreements Formed by Electronic Means
Lease agreements drawn up by electronic means may also be legally valid. The expression of intent in a digital environment is sufficient for the agreement to be formed; relationships established through email correspondence, digital platforms or an electronic signature are accepted as valid.
In agreements of this kind too, the content must be clear and the identities of the parties must be determinable. Texts signed with a secure electronic signature are regarded as equivalent to a written agreement in terms of evidentiary weight.
Essential Elements the Agreement Must Contain
Whether the agreement can be formed in due form depends on its essential elements being determinate or determinable. The clear regulation of such headings as the identity of the parties, which immovable property is leased and the amount of the rent is decisive both for the formation of the relationship and for preventing disagreements that may arise later.
Where these elements are left incomplete or vague, it may become disputable whether the agreement has been formed or which obligations the parties have assumed. When the text is being prepared, the following headings should be set out in comprehensible terms.
Details of the Parties
The identity details of the landlord and of the tenant must be clearly stated in the agreement. The name and surname or trade name, the Turkish identity number or tax number, the address and the contact details should be recorded in the text.
Where one of the parties is a company, the trade name, the trade registry number and the person holding signature authority should additionally be specified.
Clear Definition of the Leased Property
The leased property must be defined in a manner leaving no room for doubt as to which immovable property is concerned. In this context the full address, the independent unit number, the floor and flat details and any appurtenances such as a storeroom or parking space should be set out in the text.
Where the leased property is not clearly identified, the application of the agreement, and the determination of the area in respect of which the obligations arise, may become difficult.
Rent and Method of Payment
The amount of the rent and the manner in which payment is to be made must be expressly agreed. The matters requiring clarification in the text are the amount of the monthly rent, the day of the month on which payment is to be made, whether payment is to be effected through a bank or in cash, and the method by which the rent increase is to be applied.
Where no rent has been agreed at all, it may become disputable whether the agreement has been formed.
Term of the Lease
The duration of the lease relationship should be stated in the text, and it should be written expressly whether the agreement is fixed-term or open-ended.
The absence of an agreed term does not render the agreement invalid; in such a case the relationship is treated as an open-ended lease agreement.
Security Deposit and Ancillary Expenses
The amount of the deposit and which expenses are to be borne by the tenant must be clearly shown in the text. Within this framework, the security deposit, the service charges and common expenses, the utility subscription payments and the maintenance and repair costs should be set out as separate items.
It should also not be overlooked that, in residential and roofed workplace leases, the security deposit may not exceed three months’ rent.
Purpose of Use
The purpose for which the immovable property is to be used should be stated in the agreement. Forms of use such as occupation as a residence, use as an office or the conduct of a commercial activity should be written into the text.
Recording the purpose of use is important for establishing use contrary to the agreement and for assessing the eviction process.
Commencement Date and Record of Delivery
The date on which the lease relationship began and the date on which the immovable property was delivered must appear clearly in the text. This date plays a decisive role in calculating the moment at which the obligation to pay rent arises, the day on which the increase is to be applied, the eviction periods and the limitation and termination periods.
Signatures of the Parties
The signing of the text by the parties is important for proving the existence of the agreement and the intent of the parties. A document bearing no signature may create serious evidentiary problems in practice as to whether the agreement was formed. It is therefore advisable that all pages be signed or initialled.
Matters to Observe When Concluding the Agreement
As a rule, a lease agreement comes into being through the corresponding declarations of intent of the parties. However, the disputes seen in practice arise for the most part not from the formation of the agreement but from the failure to carry out the necessary checks before signature. For that reason, attention should not be confined to the rent when the text is being prepared; the landlord’s authority, the factual and legal status of the immovable property, the payment conditions, the security deposit, the ancillary expenses and the manner of delivery should also be clearly regulated.
Under the Turkish Code of Obligations No. 6098, the agreement is formed by the agreement of the parties; the landlord is obliged to deliver the immovable property on the agreed date in a condition fit for the use contemplated by the agreement and to maintain it in that condition throughout the relationship. As a rule, the ancillary expenses relating to use are borne by the landlord; in residential and roofed workplace leases, the security deposit may not exceed three months’ rent.
Verifying Ownership and Authority
Before signature, it must be investigated whether the person acting in the capacity of landlord is genuinely the owner and, if not the owner, whether that person holds authority to lease. Cases in which the immovable property is let by an estate agent, a family member, a building manager or an attorney-in-fact who does not in fact hold valid authority are frequently encountered in practice.
In this context the land registry record should be examined so far as possible; if the person signing the agreement is not the owner, a power of attorney or a certificate of authority should be inspected; and in immovable property held in co-ownership or subject to a community of heirs, it should be clarified in what capacity and under what authority the letting is being made.
In workplace leases, the fact that the landlord is the owner may not on its own be sufficient; whether the immovable property is factually and legally suitable for the planned activity must also be assessed separately.
Examining the Factual and Legal Status of the Leased Property
The leased property should not be regarded as consisting of an address alone; it should be checked as to which independent unit it is, the appurtenances and common areas, the fixtures, any existing defects, the utility subscriptions, the occupancy permit and licence position and, particularly in workplaces, suitability for the intended activity.
Typical situations that give rise to serious disputes later include the failure to record existing damage at the delivery stage, the fixtures subsequently becoming a matter of contention, an obstacle arising from the licence or the management plan in an immovable property intended for use as a workplace, and a property leased as a residence in fact having a different character.
For this reason a photographic inspection should if possible be carried out before delivery, an inventory of fixtures should be drawn up, and existing damage, deficiencies and meter readings should be recorded in a report.
Setting Out Rent, Increases and Payment Terms Clearly
The headings requiring clarification in the agreement are the amount of the monthly rent, the day of payment, the account to which or the method by which payment is to be made, how the increase is to be applied and what consequences will follow in the event of late payment.
It is not only the amount of the rent but also the method of payment that is decisive. Payment by hand, bank transfer, whether or not the reference field is completed, and part payments may later create problems of proof. It is therefore safer to opt for a system of payment through a bank with a reference note.
Nor should the increase clause be left uncertain. When the provision is drafted, general and vague expressions that conflict with the mandatory limits of the statute should be avoided.
Separating Deposit, Ancillary and Common Expenses
The security deposit, on the one hand, and service charges, common expenses, utility subscriptions, maintenance costs and use-related expenses, on the other, are distinct items. In residential and roofed workplace leases the security agreed may not exceed three months’ rent; where it is given in cash, it must be deposited with a bank. Since, under the statute, the ancillary expenses relating to use are as a rule borne by the landlord, the text must clearly show which cost belongs to which party.
The items that should be regulated separately in the agreement are as follows: the amount of the security deposit, the party on whom the service charges fall, common expenses at building or facility level, the water, electricity, natural gas and internet subscriptions, and responsibility for the maintenance and repair of the fixtures.
Rather than general expressions such as "all expenses are borne by the tenant", it is preferable to list the expense items individually so far as possible.
Recording the Time and Conditions of Delivery in Writing
The landlord is obliged to deliver the immovable property in a condition fit for the use contemplated by the agreement. The date on which delivery was made, the condition of the immovable property and what was present at the moment of delivery should therefore be reduced to writing.
In this framework the date of handover of the keys, the final meter readings, the state of the paintwork, the inventory of fixtures and any existing damage and deficiencies should if possible be recorded in a separate delivery report.
Regulating Eviction, Termination and Special Terms
The headings to be considered when the agreement is being prepared include whether the relationship is formed for a fixed or an indefinite term, how the extension conditions will operate, the procedure by which the keys are to be handed over in the event of eviction, who will bear responsibility in the case of early vacation, whether there is a prohibition on alterations or a requirement of consent, whether any restriction is stipulated as regards sub-letting and the transfer of the right of use, and the rules concerning the use of common areas.
A critical point in practice: the undertaking to vacate is a distinct document that must be assessed independently of the lease agreement. Undertakings obtained at the same time as the agreement may give rise to disputes over validity later on. If such a document is to be drawn up, it should be prepared in the awareness that it produces separate legal consequences.
Checking Guarantor, Spousal Consent and Representation Documents
If there is a guarantor under the agreement, compliance with the provisions on suretyship, whether the signature genuinely belongs to the guarantor, and whether the date and the limit of liability are expressly written should be verified.
Where the tenant is married and the agreement may produce consequences affecting the family residence, the position of the spouse should additionally be considered in the light of the particular circumstances. In relationships where the tenant is a company, the authorised signatory, the signature circular and the scope of the power of representation should be examined.
Independent Legal Assessment
A significant proportion of lease disputes arises from simple checks not carried out at the stage when the agreement is formed. Signing the text hastily on the basis of a pre-printed form, and leaving headings such as authority, the condition on delivery and the allocation of expenses blank, turns into disputes that are difficult to prove once the relationship ends. The agreement should be conceived not as a document in which the parties merely agree on the rent, but as a framework governing the entire life of the relationship.
In workplace leases, it is further decisive, in order to prevent losses arising later, that the administrative permits required for the activity to be carried on and the legal status of the immovable property be examined from the outset. When a specific agreement is being prepared, it is advisable to review the following headings:
- Documentary verification of the landlord’s capacity as owner or of the authority to lease
- Definition of the leased unit, the appurtenances and the fixtures in a manner leaving no room for doubt
- Drafting of the increase clause in a manner consistent with the statutory limits and capable of being calculated
- Compliance of the security deposit with the three-month limit, together with the itemised listing of the expense headings
- Recording of the factual position by means of a delivery report, meter readings and photographs
- Separate scrutiny of the undertaking to vacate, the suretyship and the representation documents
Independent Legal provides advisory services in the preparation of lease agreements, the legal review of existing texts and the conduct of disputes arising from the lease relationship.