This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement no. 290694. TENLAW: Tenancy Law and Housing Policy in Multi-­level Europe National Report for TURKEY Author: Güzide Dilsen Bulut Table of Contents List of Tables and Figures ............................................................................................. 4 1. Housing situation ...................................................................................................... 6 1.1 General Features .................................................................................................... 6 1.2 Historical evolution of the national housing situation and housing policy ............... 6 1.3 Current situation ................................................................................................... 12 1.4 Types of housing tenures ..................................................................................... 14 1.5 Other general aspects .......................................................................................... 22 2. Economic urban and social factors ....................................................................... 24 2.1 Current situation of the housing market ................................................................ 24 2.2 Issues of price and affordability ............................................................................ 28 2.3 Tenancy contracts and investment ....................................................................... 30 2.4 Other economic factors ......................................................................................... 31 2.5 Effects of the current crisis ................................................................................... 31 2.6 Urban and social aspects of the housing situation ............................................... 34 2.7 Social aspects of the housing situation ................................................................. 35 3. Housing policies and related policies ................................................................... 36 3.1 Introduction ........................................................................................................... 36 3.2 Governmental actors ............................................................................................ 38 3.3 Housing policies .................................................................................................... 40 3.4 Urban policies ....................................................................................................... 42 3.5 Energy policies ..................................................................................................... 44 3.6 Subsidization ........................................................................................................ 45 3.7 Taxation ................................................................................................................ 49 2 4. Regulatory types of rental and intermediate tenures ........................................... 54 4.1 Classifications of different types of regulatory tenures ......................................... 54 4.2 Regulatory types of tenures without a public task ................................................ 54 4.3 Regulatory types of tenures with a public task ..................................................... 56 5. Origins and development of tenancy law .............................................................. 61 6. Tenancy regulation and its context ....................................................................... 64 6.1 General introduction ............................................................................................. 64 6.2 The preparation and negotiation of tenancy contracts .......................................... 70 6.3 Conclusion of tenancy contracts ........................................................................... 73 6.4 Contents of tenancy contracts .............................................................................. 80 6.5 Implementation of tenancy contracts .................................................................. 100 6.6 Termination of tenancy contracts ........................................................................ 118 6.7 Enforcing tenancy contracts ............................................................................... 140 6.8 Tenancy law and procedure “in action” ............................................................... 145 7. Effects of EU law and policies on national tenancy policies and law .............. 150 7.1. EU policies and legislation affecting national housing policies .......................... 150 7.2. EU policies and legislation affecting national tenancy laws ............................... 154 8. Typical national cases (with short solutions) ..................................................... 158 9. Tables ...................................................................................................................... 162 9.1 Literature ............................................................................................................. 162 9.2 Table of Cases .................................................................................................... 170 9.3 List of Abbreviations ........................................................................................... 172 3 List of Tables and Figures Table 1. Households by type of living quarter………………………………………………..11 Figure 1. Households by ownership status of the dwelling………………………………….12 Table 2. Households by ownership status of the dwelling…………………………………..12 Table 3. Yearly house sales 2008–2012……………………………………………………..14 Table 4. Households by number of floors in the building……………………………………17 Table 5. Households by construction year of the building…………………………………..18 Table 6. Households by number of rooms per dwelling……………………………………..19 Table 7. Availability of kitchen…………………………………………………………………20 Table 8. Households by piped water system, toilet and bathroom facilities of the dwelling………………………………………………………………………………………….20 Table 9. Households by main type of heating system in the dwelling……………………...21 Summary table 1. Tenure structure in Turkey, 2011………………………………………...23 Figure 2. Housing demand and supply in Turkey……………………………………………24 Figure 3. Population growth in selected countries…………………………………………...25 Table 10. Urbanization and urban population forecasts…………………………………….25 Table 11. Urban population and number of households and household population forecasts…………………………………………………………………………………………26 Table 12. Residential requirement forecasts in Turkey 2023……………………………….27 Figure 4. Distribution of consumption expenditures of households by expenditure types …………………………………………………………………………………………….28 Figure 5. Ownership rates in quarters………………………………………………………...32 Figure 6. Housing prices in 2006–2010………………………………………………………32 Figure 7. Sales in the housing sector in quarters…………………………………………….32 Figure 8. Proportion of households who are owners of the dwelling they reside………….33 Summary table 2. Urban and Social Aspects of the Housing Situation……………………35 Summary table 3. Housing Policies…………………………………………………………...43 4 Summary table 4. Subsidization of landlord………………………………………………….46 Summary table 5. Subsidization of tenant……………………………………………………47 Summary table 6. Subsidization of owner-­occupier…………………………………………47 Summary table 7. Taxation…………………………………………………………………….52 Summary table 8. Regulatory types of tenure…………………………………………….....59 Figure 9. Turkish Judiciary…………………………………………………………………….66 Figure 10. First instance courts of ordinary jurisdiction….................................................67 Summary Table 9. Preparation and negotiation of tenancy contracts…...........................69 Summary Table 10. Conclusion of tenancy contracts…...................................................72 Summary Table 11. Contents of tenancy contracts…......................................................79 Summary Table 12. Implementation of tenancy contracts…............................................99 Summary Table 13. Termination of tenancy contracts…................................................117 Summary Table 14. Enforcing tenancy contracts….......................................................138 5 1. Housing situation 1.1 General Features Turkey is a large country covering a total area of 783,562 square kilometres. It is divided into seven regions which merely imply geographic, economic and socio-­cultural differences and no public administrative function such as states in some countries. A unitary structure defines Turkey’s public administration. Besides the central administration, there are eighty-­one provinces which have appointed governors and elected mayors. Turkey’s resident population has been reported as 77,695,904 by the end of 2014, with a 13 per mille increase rate. The number of people per square kilometre increased by 1 person as compared to 2013, and reached 101. While 91.2 per cent of the population reside in provinces and cities, only 8.2 per cent live in smaller units called ‘belde’ and villages. Istanbul is the largest city in terms of population, accommodating more than 18 per cent of the Turkish population.1 The population density in provinces ranges as dramatically as the population itself: Istanbul is the most populated province with a population of 14,377,000 (followed by Ankara with a population of 5,150,000 and Izmir with a population of 2,787,000) and 2,767 people per square kilometre (followed by Kocaeli with 477 residents per square kilometre and Izmir with 342 residents per square kilometre);; Bayburt is the least populated city with 80,607 residents and Tunceli has the lowest population density with 12 residents per square kilometre.2 1.2 Historical evolution of the national housing situation and housing policy • Please describe the historic evolution of the national housing situation and housing policies briefly. o In particular: Please describe briefly the evolution of the principal types of housing tenures from the 1990s on. Explain the growth and decline of the different tenures and the reasons why that happened (e.g. privatisation or other policies). The Turkish Republic, since its establishment in 1923, has faced chronic housing problems due to the rapid increase of its population, inefficient policies to deal with that, and several other factors. Various housing policies have been implemented, usually examined as three periods: the prolonged period of nation-­state building between 1923 and 1950, the period of the mass migration of labour force to towns between 1950 and 1980, and the post 1980 period characterised by the construction of the hegemony of capitalist classes in cities.3 Common to all, the Turkish housing policy has focused merely on encouraging home ownership and has never aimed at forming a social rental system. Only for a brief period during the Second World War, welfare measures in rental housing 1
Turkish Statistical Institute, http://www.tuik.gov.tr/PreHaberBultenleri.do?id=18616 (retrieved 22 October 2013). 2
Ibid. 3
Şengül, T. Kentsel Çelişki ve Siyaset: Kapitalist Kentleşme Süreçleri Üzerine Yazılar. İstanbul: WALD, 2001, Çoban, A. N. ‘Cumhuriyetin İlanından Günümüze Konut Politikası’. Ankara Üniversitesi SBF Dergisi: 67, no. 3 (2012): 75–108. 6 were provided in the form of rent control (freezing rents). Rental housing has been ignored even in the case of projects aiming at upgrading squatter areas, preserving the historical stock, or reconstructing settlements after natural disasters.4 The development of the neo-­liberal economic regime in the 1980s had a significant impact on the Turkish housing policy. The 1982 Constitution which entered into force after the 1980 military coup introduced the ‘right to housing’ as a separate right, whereas the previous 1961 Constitution covered the said right under the ‘right to health’. According to Article 57 of the 1982 Constitution, which is still in force, “the State shall take measures to meet the need for housing within the framework of a plan that takes into account the characteristics of cities and environmental conditions, and also support community housing projects.”5 In view of that, with the 1982 Constitution, the recognition of housing need was established within the urban and environmental context as well as a framework of planning.6 However, social aspects of housing emphasized by the 1961 Constitution, specifically the priority of meeting the housing needs of the poor and low income families, were abandoned after 1980 in accordance with the economic policy of neo-­liberal capitalism.7 The Turkish housing policy after the 1980s focused on the middle and high income groups resulting in the increase of the slum areas – the so-­called gecekondu problem – in big cities, which is discussed on the following pages. Indeed, housing has been widely considered as an investment and income tool in the 1980s as opposed to its perception as a social right and social guarantee in the 1960s and 1970s.8 The 1982 Constitution also paved the way for mass housing policies by explicitly pointing out the state support. This was a vital policy tool in combating the growing housing deficit at the time.9 In that vein, the first Turkish law on mass housing10 was enacted in 1981 and regarded as crucial in the recovery of the housing market which was affected by an economic crisis.11 This law provided a framework for the construction of mass housing and adoption of the basic rules and procedures to be applied to producers of housing. In order to create financial means to support housing, the law also created a specific fund to finance housing production and to that end required the reservation of 5 per cent of the general budget expenses. It stipulated certain restrictions on the use of the funds, mainly targeting to support low and middle income groups.12 However, the social approach of the said Law was considerably weakened when it was abolished by a new Mass Housing Code13 which entered into force in 1984 (1984 Mass Housing Code).14 4
Balamir, M. ‘Formation of Private Rental Stock in Turkey’ Netherlands Journal of Housing and the Built Environment 14, no. 4 (1999): 385–402. 5
The Constitution of the Republic of Turkey (1982), An English translation of the Constitution is available at: https://global.tbmm.gov.tr/docs/constitution_en.pdf (retrieved 25 October 2013). 6
Çoban, 91–92. 7
Ibid. 8
Karasu, M. A. ‘Devletin Değişim Sürecinde Belediyelerin Konut Politikalarında Farklılaşan Rolü’ Süleyman Demirel Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi 14, no. 3 (2009): 245–264. 9
Çoban, 92. 10
Mass Housing Code No. 2487 (1981), O.J. 17396/10 July1981 (Toplu Konut Kanunu). 11
Çoban, 93. 12
Karasu, 255. 13
Mass Housing Code No. 2985 (1984), O.J. 18344/17 March 1984 (Toplu Konut Kanunu). 14
Karasu, 255. 7 In 1984, the Housing Development and State Partnership Administration was established. It remains to date – after major structural changes and being renamed ‘Housing Development Administration of Turkey’ – the leading official institution in Turkey in housing and settlement issues.15 The 1984 Mass Housing Code changed the sources of income prescribed by the previous law and eliminated the share in the state budget. Instead of transferring financial resources from the state budget, the Law established a ‘housing development fund’ which is composed of certain amounts of tax and sale values of various properties.16 It also removed the restrictions stipulated by the previous Law of 1981 paving the way for the construction of ‘luxurious’ houses and holiday homes from the public budget.17 Despite its shortcomings and its apparent economic rather than social objectives, the 1984 Mass Housing Code had a vital outcome such as the creation of the largest fund ever in the Turkish Republic and the transfer of a remarkable amount of financial resources to the housing sector. This represents a milestone in the Turkish housing policy and is considered to be the first real state support which provided financial means for producers of housing and provided housing loans for consumers.18 Between 1984 and 2002, 43,145 new residential buildings were produced and 940,000 dwellings were granted housing loans.19 The Turkish housing policy in the 1980s also facilitated the participation of the construction cooperatives in the housing sector. The share of cooperatives in housing production was more than 30 per cent in the 1980s, whereas it only amounted 7 per cent in the 1960s and 13 per cent in the 1970s.20 However, in contrast to the European tradition, cooperative investments subsidized by TOKI in Turkey excluded tenants and supported merely the ownership model21 (see types of housing tenures in 1.4 below). In 1990, the Housing Development and State Partnership Administration was separated into two distinct institutions: Housing Development Administration (Toplu Konut Idaresi, TOKI) and State Partnership Administration. The housing development fund was included within the state budget in 1993 and later in 2001 it was removed along with some other funds. Currently, TOKI is the most important actor in the Turkish housing sector. The income of TOKI is composed of the revenues from the sale and rent of real estate, loan reimbursements, interest income, subsidy allocated with the budget laws, fees for departure to a foreign country, and the service fees collected from relevant entities and organisations amounting to 3–10 per cent of the cost of the constructions made on behalf of government agencies.22 After 2000, the Turkish housing policy continued to focus on home ownership, with an accelerated plan to increase it countrywide. The Justice and Development Party (Adalet 15
See the official website of Housing Development Administration of Turkey http://www.toki.gov.tr/ (retrieved 30 October 2013). 16
Çoban, 94. 17
Karasu, 255. 18
Ibid, 255, 256. 19
Housing Development Administration of Turkey http://www.toki.gov.tr/ (retrieved 30 October 2013). 20
Çoban, 95. 21
Balamir, 388. 22
Housing Development Administration of Turkey http://www.toki.gov.tr/ (retrieved 30 October 2013). 8 ve Kalkınma Partisi, AKP) came to power alone in 2002 and the new government issued an immediate action plan on housing policy as explained in the sections below. To sum up, neither the rise of large scale cooperatives in the 1980s nor the rise of TOKI starting from the 1990s took into account the needs of tenants, who were left entirely unprotected in the market. Whereas the cooperatives were important actors in housing production in the 1980s and 1990s, TOKI and urban transformation projects mark the following period starting in 2002 with the AKP government.23 Despite the remarkable increase in housing production within the last decade, the Turkish housing policy has been unsuccessful in meeting the housing requirements.24 This is partly because of the long-­standing Turkish housing policy focusing merely on ownership and leaving out other types of housing tenures despite the fact that the market conditions – considered along with the income of the households – make it impossible for the majority of the population to buy a house.25 On the other hand, unlike European experience and some developing countries, the Turkish housing policy did not have any contribution to the formation of the private rental sector either. No public policy and no publicly owned stock existed as rentable housing during any of the above-­mentioned periods. In spite of the negligence of the public support, ownership has been favoured by the households for the purposes of investment and financial security. Further, the inflationary economy has promoted ownership.26 Nevertheless, the absence of ideological, political and practical protectionism has not prevented the increase in the number of tenant households in Turkey ever since the 1960s. A rise from 16 per cent to 30 per cent in rental housing is observed from 1965 to 1990.27 In 2000, 68 per cent of households were the owners of their houses in which they live, whereas in 2007 only 60 per cent owned their house.28 It has been pointed out, in connection with the absence of public housing in Turkey, that the public policy has never supported social or public rental housing, resulting in a situation where the residential rental market in Turkey is found to be too liberal even compared to countries like the USA.29 o In particular: What is the role of migration within the country, immigration or emigration from/towards other countries inside and outside the EU (including war migration as in Ex-­Yugoslavia) 23
Çoban, 98. Ibid, 101. 25
According to a research on the affordability of house purchase in Istanbul, 61 per cent of the households in Istanbul cannot afford buying a house with their income. T.C Bayındırlık ve Iskan Bakalığı, ‘Kentleşme Şurası: Kentsel Dönüşüm, Konut ve Arsa Politikaları Komisyonu Raporu, 2009’. Ankara, 2009, Çoban, 102. 26
Balamir, 385. 27
Ibid, 388. 28
Turkish Statistical Institute, ‘Gelir ve Yaşam Koşulları Araştırması Sonuçları, 2006-­2007’ no. 221, cited in: Çoban, 102. 29
“This type of renting pattern can be considered to be too liberal since even in countries like the USA where market forces dominate almost all relations in housing;; there is more administrative control over the private rented sector than the Turkish case. Further, in the USA, the owners of the private rented sector are not necessarily the private households who rent out their dwellings according to personal modalities. Additionally, the private renting is not alone even in the USA;; it is supported with public housing where possible.” Sarıoğlu-­Erdoğdu, G.P. ‘A Comparative Analysis of Entry to Home Ownership Profiles: Turkey and the Netherlands’ METU JFA 27, no. 2 (2010) 95–124. 24
9 Turkey has experienced both emigration and immigration within the last forty years. However, no regular data collection system exists in Turkey on external migration. The role of external migration has, nevertheless, been of no or little importance for the housing policy, compared with the internal migration and its impacts on housing and urbanisation. The migration from rural to urban areas, beginning in the 1950s, had a major negative effect on the housing problem in Turkey, more specifically, the growth of illegal dwellings. While the excess labour in the rural areas created a ‘push’ from the rural areas to the cities, the growing industry around the cities created a ‘pull’ for the rural population to meet the demands of the urban population.30 The urbanisation rate of 17 per cent in the 1920s climbed to 25 per cent in 1960, 45 per cent in 1980, and 60 per cent in 2000.31 Such rapid urbanisation, coupled with inefficient housing policies disregarding the needs of the low income groups, has caused the so-­called gecekondu problem. Gecekondu literally means ‘built overnight’ in Turkish, implying the sleeping time of the authorities, and is basically the de facto response of the migrants to the absence of mechanisms providing them with shelter.32 Gecekondus are unplanned, spontaneous and illegal dwellings as they are either (a) built on public land usually belonging to the state;; (b) constructed on private property belonging to someone else;; (c) built on shared-­title land;; and/or (d) constructed without occupancy or construction permits.33 In line with the urbanization rate, the number of gecekondus has increased rapidly forming shanty towns especially around big cities. Besides the low quality of the dwellings, these towns, developed haphazardly, did not have the usual urban infrastructure and services such as piped water, sewerage, electricity, solid waste collection, drainage and public transportation;; fire engines or ambulances would have difficulties in entering the unplanned streets in cases of emergency, as did also garbage trucks.34 Some of these towns were even built on the protected, agricultural, forest, water basin, landslide or historical areas.35 By the 1970s, gecekondus were accommodating half of the population in large cities indicating a serious problem caused by the absence of social housing policies.36 Whereas the first arrivals in the 1950s and those who migrated in the 1960s and 1970s were typically the owners of gecekondus, the 1980s saw the differentiation between ‘gecekondu owners’ and ‘gecekondu tenants’ and since the 1990s tenancy has become more common in gecekondu neighbourhoods.37 On the other hand, unlike within the years between 1950 and 1990, the migration after 1990 was mostly the result of internal displacements or the 30
Adaman, Fikret, & Çağlar Keyder ‘Poverty and Social Exclusion in the Slum Areas of Large Cities in Turkey’. Report for the European Commission, Employment, Social Affairs and Equal Oppurtunities (2006):17. 31
Keleş, R. Kentleşme Politikası, ninth ed. Ankara: Imge Kitabevi, 2006. 32
The Turkish Linguistic Society provides two definitions for gecekondu: 1) Dwelling built in a hurry on others’ land or state land without consent and knowledge of the owner and against the planning and construction laws, 2) Shabby constructions built in a rush. Turkish Linguistic Society, http://www.tdk.gov.tr/ (retrieved 8 November 2013). 33
Baharoglu, Deniz & Josef Leitmann, ‘Coping Strategies for Infrastructure: How Turkey's Spontaneous Settlements Operate in the Absence of Formal Rules’. HABITATITNL. 22 (1998): 115–135. 34
Ibid, Adaman & Keyder, 20. 35
Uzun, Bayram, Mehmet Çete & Mustafa Palancıoğlu, ‘Legalizing and upgrading illegal settlements in Turkey’..Habitat International 34 (2010): 204–209. 36
Baharoglu & Leitmann, 116. 37
Adaman & Keyder, 20. 10 armed conflict at the southeast region of Turkey.38 By 2010, the number of illegal constructions in Turkey was estimated to be 4 million, 1.3–1.4 million of which were in Istanbul.39 Turkish governments have implemented various policies since the 1950s in relation to the gecekondu problem. From a legal perspective, several laws have been passed since that time. The first wave of laws required the demolishing of existing gecekondus and the prevention of building new ones.40 However, between 1950 and 1970, these laws were not implemented due to social, political and economic reasons and unsurprisingly the number of gecekondus increased.41 In fact, governments started to consider the gecekondu population as a source of votes42 and, unable to develop an adequate housing policy for the low income groups, they tolerated the construction of illegal settlements. In the 1980s, the policy was changed to focus on legalising rather than demolishing on grounds such as the eventual improvement of the living conditions in these areas when provided with a secure tenure, tax collection, and elimination of boundary conflicts and the encouragement of the housing sector.43 Accordingly, the second wave of laws on the gecekondu problem was adopted in 1983 and 1984 which transformed the de facto possession into de jure possession, allowing the owners to convert their typical single-­
storey houses to multi-­storey apartment buildings.44 Gradually, the original shantytowns with ramshackle buildings started to disappear, replaced by buildings with several units looking relative sturdy, though constructed badly and with little aesthetic sense.45 As was the situation with the demolition laws before the 1980s, the amnesty laws have not proved to be an efficient solution either. Despite the above-­mentioned conversion of buildings, the major outcome was bundles of legal but unhealthy settlements. Further, the gecekondu neighbourhoods, once situated at the periphery of cities, became part of the city centres as a result of the rapid urban growth.46 This increase in the value of the gecekondu neighbourhoods paved the way for the owners, who were originally illegal occupiers of the public land, to sell their land easily and to profit from their gecekondus. Thus, instead of preventing these illegal settlements, the amnesty laws encouraged people to construct new ones as a tool for enrichment in expectation of upcoming amnesty laws.47 Unable to cope with the gecekondu problem through legislative means described above, TOKI adopted a new policy in 2003, namely, the urban renewal projects which aim at 38
Ibid, 21. Kozal, R. ‘Gecekondu ve Gecekondulaşma’. Yapı Malzeme 173 (2010): 70–74. 40
Law No. 5431 Concerning the Demolition of Illegally Built Structures and the Amendment of Article 13 of the Law No. 2290 on Municipal Construction and Roads (1949), O.J. 7230/11 June 1949, Gecekondu Law, No.775 (1966), O.J. 12362/20 July 1966. 41
Köktürk, E..’Türkiye’de ‘Gecekondu ve İmar Affı Üzerine Bir İnceleme’. HKM Jeodezi, Jeoinformasyon ve Arazi Yonetimi Dergisi 89 (2003): 49–66, Uzun, B., & Colak, H. E. ‘Providing formal property rights to slum owners through tenure legalization process in Turkey'. FIG Working Week 13–17 May (2007): Hong Kong SAR, China, cited in : Uzun, Çete & Palancıoğlu, 205. 42
Adaman & Keyder, 18. 43
Uzun, Çete & Palancıoğlu, p. 205. 44
Adaman & Keyder, 20. 45
Ibid. 46
Kaya, İ, & R. Zengel, ‘A marginal place for the Gypsy community in a prosperous city: Izmir, Turkey’.Cities, 22, no. 2 (2005): 151–160. cited in : Uzun, Çete & Palancıoğlu, 206. 47
Ibid. 39
11 upgrading unplanned and problematic areas, occupied public lands, regions having disaster risks, and cultural and historic areas surrounded by illegal settlements.48 In so doing, the projects usually pursue two models: either demolishing the illegal settlements, constructing new houses in the same area, and allocating them to the right holders;; or constructing new houses in a different area to transfer there the inhabitants who live in the area to be upgraded.49 1.3 Current situation • Give an overview of the current situation. o In particular: What is the number of dwellings? How many of them are rented vs. owner-­occupied? What would be the normal tenure structure (see summary table 1)? What is the most recent year of information on this? The Turkish Statistical Institute (TurkStat, Türkiye Istatistik Kurumu, TÜİK) provides official information on, among others, social and demographic matters. The last census on housing, namely, the Population and Housing Census (PHC), was conducted by TurkStat in 2011.50 According to the PHC, there are 19,482,000 households in Turkey;; 19,454,000 of these households (99.9 per cent) are residing in dwellings, 16,000 households are residing in workplaces (bureau, construction site, depot etc.), 4,000 households are living in hotels, guest houses and similar other places, and 7,000 households are living in other places such as barracks, tents, caves and caravans.51 Table 1 below shows the number and proportion of households living in dwellings and other places of residence just mentioned. Table 1. Households by type of living quarter Source: TurkStat PHC 2011 48
Ibid, 207. Ibid. 50
Turkish Statistical Institute was established in 1926 and still operates as the main governmental agency on producing official statistics on a variety of topics. 51
Turkish Statistical Institute, ‘Population and Housing Census 2011’. Ankara: 2013, 233. 49
12 Figure 1 below shows the proportion of each tenure type in 2011. The dominant share is owner-­occupied dwellings by 67.3 per cent, whereas 23.8 per cent of the dwellings are rented. The lojmans (dwellings allocated to employees in public or private sector) form only 1.5 per cent of the dwellings. A more significant share (around 7.3 per cent) represents those households who do not own their dwellings but do not pay any rent either as a result of various reasons such as kinship (dwellings owned by a household member’s parents, siblings or other relative) or emergency situations (houses built for disaster victims).52 Figure 1. Households by ownership status of the dwelling Source: TurkStat PHC 2011 According to these proportions, the total number of dwellings according to their tenure types is shown in Table 2 below. Table 2. Households by ownership status of the dwelling Source: TurkStat PHC 2011 52
Population and Housing Census 2011, 233. 13 1.4 Types of housing tenures • Describe the various types of housing tenures. Social housing projects involving municipally owned subsidised rental homes do not exist in Turkey.53 The two main tenure types are home ownership, which covers the majority of the dwellings, and private rental housing, which is the only type of rental tenure in Turkey. Exceptionally, there are some public rental flats (called lojman or kamu konutları in Turkish), which are owned by public institutions and provided as a housing aid for their employees. However, they do not imply any form of social housing in a real sense, and they are never regarded as part of the Turkish housing policy as their inhabitants cover merely a limited group (around 1.5 per cent) such as the members of military and certain groups of civil servants.54 o Home ownership § How is the financing for the building of homes typically arranged (e.g. own equity, mortgage based loan, personal loan, mix, other) Both institutional and non-­institutional housing finance systems currently exist, the latter being much more common and effective. The institutional financing covers project debt finance, housing loans and mortgages, and the non-­institutional alternatives are the cooperative agreements and equity sharing.55 Majority of the financing for the building of private dwellings comes from own equity, inheritance, and support from close family members. Equity sharing agreements are also widely used, whereby the land owner, who usually cannot afford to build a dwelling, offers his or her land to the contractor in return for a portion of the equity interest, for instance, half of the apartments that are to be built.56 Housing cooperatives, described briefly below, also exist despite their decreasing – almost diminishing – role. As to the institutional finance systems, besides housing loans (significantly increased after 2005) and the mortgage system (applied only starting from 2007), project debt financing system can be mentioned;; this latter implies secured loans of appropriate maturity and terms provided by financial institutions for project developers.57 Previously, housing cooperatives and equity sharing agreements played a big role in housing finances. This situation continued even after the 1980s, when specific financing programs emerged as a side product of commercial banks. The reason was that most of the financing programs were not convenient for the majority of the population given the high interest rates and short maturities. A few of the commercial banks and TOKI have offered longer term loans with variable interest rates;; however, after the 2001 economic 53
Elliott, I. A. ‘Fact Finding Report on Poverty and Housing in Turkey’. Habitat for Humanity International (2010), 22. 54
Ibid. 55
Ministry Investment Support and Promotion Agency (Turkey) & Deloitte, ‘Real Estate Industry Report’ Ankara: 2010, 8. 56
Ibid. 57
Ibid. 14 crisis, the maturity periods were shortened.58 It was not until the Mortgage Law59 was introduced in 2007 that housing loan system in Turkey allowing longer maturities became available for a wider range of income groups. The Mortgage Law of 2007 and the following housing loans at a low level did not meet the high expectations of the real estate sector experts;; nevertheless, it did have a positive effect on the house sales. While housing loans are the most rapidly growing source of housing finance in recent years (but from a very low base)60, other types of housing finance systems are also widely used (see Table 3. Yearly house sales 2008–2012). Table 3. Yearly house sales 2008–2012 Mortgaged Sales 2008 -­ 2009 22.726 2010 246.741 2011 289.275 2012 270.136 Other Sales 427.105 532.458 360.357 419.000 431.485 Total Sales 427.105 555.184 607.098 708.275 701.621 Source: TurkStat § Restituted and privatised ownership in Eastern Europe Restitution of the property has become an important topic concerning minority rights following the entry into force of the Foundations Law in 2008.61 However, it relates only to the properties that once belonged to the minority foundations and were confiscated by the state.62 The Law on Foundations set a deadline (which was later extended) for non-­Muslim foundations to submit applications for the restitution of properties registered under figurative or fictitious names, or in the name of the Treasury or of the Directorate-­General for Foundations. During the process, 116 minority community foundations applied for the restitution of a total of 1,560 properties, and by April 2014, the Foundations Council has approved the return of 318 properties and the payment of compensation for 21 properties, whereas 1092 applications were found to be ineligible.63 As the restitution is an exceptional phenomenon in Turkey relating merely to the ownership of foundations, it is not discussed further in the present report. o Intermediate tenures § Are there intermediate forms of tenure classified between ownership and renting? e.g. 58
Demir, Hülya & Vildan Kurt Palabıyık, ‘Konut Ediniminde Uzun Vadeli Ipotek Kredisi Sistemi’. HKM Jeodezi, Jeoinformasyon, ve Arazi Yönetimi Dergisi 92 (2005): 3–11. 59
Law No. 5582 Amending Various Laws Concerning House Financing System (2007), O.J. 26454/6 March 2007 (Konut Finansmanı Sistemine Ilişkin Çeşitli Kanunlarda Değişiklik Yapılması Hakkında Kanun). 60
Real Estate Industry Report, 8. 61
Foundations Law No. 5737 (2008), O.J. 26800/20 February 2008 (Vakıflar Kanunu). 62
In 1974, the Court of Appeals ruled that the state could confiscate any property acquired by community foundations since 1936 through purchase, gift or inheritance. State agencies able to do so included the Directorate-­General for Foundations. 63
European Commission, ‘Turkey 2011 Progress Report’. SEC(2011) 1201 final, Brussels: 2011, 16. 15 • Condominiums (if existing: different regulatory types of condominiums) • Company law schemes: tenants buying shares of housing companies • Cooperatives The Turkish civil law provides for both co-­ownership and shared ownership while the full ownership is the main form. The apartment owners, typically, have the full property rights on their apartment, which is a part of an apartment block. The establishment of condominiums or construction servitude on the portions of a building which are available to be used separately and independently is subject to the Condominium Law.64 Housing cooperatives also exist and have traditionally been a good way of buying property for middle income groups. Timeshares especially for holiday homes can also be envisaged as an intermediate form of tenure between renting and ownership. Company law schemes allowing tenants to buy shares of housing companies, on the other hand, do not exist in Turkey. Condominium Condominium is a specific type of ownership which is related to the land share and the common premises of the main building. Common areas of a completed building such as the staircases and elevators are subject to co-­ownership. According to the Condominium Law, condominium owners are also the “owners of all the common premises of the main property, in proportion to their building plot share, according to the provisions ruling co-­
ownership”.65 This proportionate share on the use of common places (e.g. common cellars, garage, terrace, laundry and drying rooms) might be arranged otherwise by a contractual agreement. Whereas the provisions of the Condominium Law on condominiums are prescribed for the finished buildings, the duties and rights relating to construct a building and to establish a condominium upon its achievement (completed construction) are regulated under construction servitude. Construction servitude is “established by the owner or the co-­owners of a building plot for the independent premises of one or more buildings which are being built or will be built on the plot to be taken as a basis for condominium ownership in the future.”66 Timeshares The Turkish Condominium Law defines timeshare as a specific form of right of servitude which enables its holders to enjoy a residence in favour of any one of the co-­owners during a certain period of the year.67 Timeshares are registered and can be transferred, rented 64
Art. 726 Turkish Civil Code No. 4721 (2001), O.J. 24607/8 December 2001 (Türk Medeni Kanunu),Condominium Law No. 634 (1965), O.J. 12038/2 July 1965 (Kat Mülkiyeti Kanunu). 65
Art. 16 Turkish Condominium Law. Translation available at: http://www.alanyaprestige.com/en/prestige-­
residence/turkish-­condominium-­law.html (retrieved 11 December 2014). 66
Art. 2(c) Turkish Condominium Law. Translation at ibid. 67
Art. 57 Turkish Condominium Law. 16 and inherited. In practice, timeshares are situated at the holiday towns and resided by the co-­owners usually on periods of two weeks. Cooperatives Housing cooperatives are legal entities established to provide their members with residential flats or houses.68 Cooperative housing model provides that the owners of the dwelling are also the members of the cooperative and thus have responsibility for managing the housing. When the Cooperative Law entered into force in 1969, cooperatives were conceived as the sole producers of mass housing projects in Turkey and played a crucial role in the housing production initiative set by the Five Year Development Plan (1967–1972) of the State Planning Organisation.69 In the 1980s and 1990s housing cooperatives had their golden age, specifically after the introduction of the Law No. 2985 on Mass Housing which enabled TOKI to provide funds and loans for cooperatives. However, in the 2000s the housing cooperatives began to diminish since TOKI’s main role shifted from supplying financial support for housing production to directly producing housing. Whereas housing cooperatives in Turkey are currently about to diminish, a new actor, ‘GYO’ (Gayrımenkul Yatırım Ortaklığı, Real Estate Investment Trust, REIT), has begun to play an increasing role in the sector. The share of cooperatives in housing production has decreased from 35 per cent in 1988 to 20 per cent in the 1990s, to 8 per cent in 2004 and to 6 per cent in 2009.70 o Rental tenures § Are rental tenures with and without a public task distinguished? If so, how are they called and what is their share in the housing stock? § How is the financing for the building of rental housing typically arranged? (Please be brief here as the questionnaire returns to this question under 3) There is no distinction between rental tenures with and without a public task. The only type of rental tenure is the private rental housing which is without public task. On the other hand, the lojman system, which is closer to the tenure with a public task, constitute only 1.5 per cent of the entire housing stock and are gradually diminishing (for detailed information on lojmans, see Regulatory types of tenures with a public task in 4.3 below). The share of the private rented dwellings is 23.8 per cent. As there are no social renting schemes, financing for rental housing depends largely on the own initiatives of private individuals and the financial means provided for home ownership discussed above. Most private landlords are small-­scale investors with modest profit aim. There are also REITs established after the adoption of a communication by the Capital Markets Board of Turkey in 1998.71 68
Real Estate Industry Report, 8. Elliott, 67. 70
Çoban, 96. 71
Communiqué on Principles Regarding Real Estate Investment Companies, Serial: VI, No: 11, 08.11.1998. 69
17 o What is the market share (% of stock) of each type of tenure and what can be said in general on the quality of housing provided? Please consider the following criteria: type of building (single family versus multifamily versus high-­rise;; plus definition);; construction period;; number of rooms, number of square meters or average number of rooms or average useful floor area per dwelling and per person;; availability of bath/shower, hot running water and/or central heating, etc.) § For EU-­countries, Housing Statistics in the European Union would be a possible source, although more updated data would be preferred, if available. The dominant share is owner-­occupied dwellings by 67.3 per cent, while 23.8 per cent of the dwellings are rented. The lojmans form 1.5 per cent of the dwellings. Type of Building According to the PHC (2011) conducted by TurkStat, there are 19,482,000 households in Turkey by 2011. 20 per cent of the households reside in single-­floor buildings, 19.5 per cent of the households reside in 2-­floor buildings, 11.9 per cent of the households reside in 3-­floor buildings and 23.1 per cent of the households reside in buildings which have 6 or more floors (see Table 4. Households by number of floors in the building). The first three provinces which have the highest proportions of the households that reside in the dwellings located in buildings which have six or more floors are Istanbul (41.7 per cent), Ankara (39.5 per cent) and Kayseri (38.8 per cent). Table 4. Households by number of floors in the building Source: TurkStat PHC 2011 18 Construction Period The majority of the buildings used as dwellings were built after 1980: 43.5 per cent were constructed between 1981 and 2000, and 21.8 per cent were built after 2000. On the other hand, 23.4 per cent of the buildings are relatively old, built before 1980. A considerable number of the buildings with unknown construction date, amounting to a share of 11.3 per cent, are used as dwellings (see Table 5. Households by construction year of the building). Table 5. Households by construction year of the building Source: Turkstat PHC 2011 Number of Rooms The number of the rooms in dwellings varies, but most of the dwellings (85 per cent) have three or four rooms. Table 7 below shows the number of rooms in dwellings. Only 1 per cent of households reside in single-­room dwellings (kitchen, bathroom and toilet are excluded), whereas 7.3 per cent reside in dwellings with two rooms. The number of persons per room is 1.1 and the average number of rooms in dwellings is 3.5 (see Table 6. Households by number of rooms per dwelling). Provinces with the lowest number of occupants per room are Çanakkale and Eskişehir (0.8) and Burdur (0.9). Provinces with the highest number of persons per room are Şırnak (2.2) and Hakkari and Mardin (1.9). The provinces having the highest average number of rooms in the dwellings are Rize (4 rooms) and Yozgat and Düzce (3.9 rooms). The 19 provinces with the lowest average number of rooms in the dwellings are Kilis and Ardahan (3 rooms) and Gaziantep (3.2 rooms).72 Table 6. Households by number of rooms per dwelling Source: TurkStat PHC 2011 Availability of kitchen 99 per cent of the households have kitchen in their dwelling. 61.1 per cent of those have kitchens of at least 4 square meters while 32.9 per cent have kitchens of less than 4 square meters (kitchenette). 4.7 per cent of households have cooking facilities in another type of room instead of kitchen, and 1 per cent of households do not have kitchen in their dwelling (see Table 7. Availability of kitchen). 72
Population and Housing Census 2011, 244. 20 Table 7. Availability of kitchen Source: TurkStat PHC 2011 Availability of piped water system, toilet and bathroom facilities A considerable amount, 7.3 per cent, of dwellings with toilets outside the building still exists. On the other hand, the proportion of households without piped water, toilet and bathroom inside or outside the dwelling are 0.9 per cent, 0.3 per cent and 1.1 per cent, respectively (see Table 8. Households by piped water system, toilet and bathroom facilities of the dwelling). Table 8. Households by piped water system, toilet and bathroom facilities of the dwelling Source: TurkStat PHC 2011 21 Availability of central heating system Less than half of the dwellings have central heating systems, whereas the most common heating system is stove (natural gas stove included) which is the main heating system in 57.1 per cent of the dwellings. The proportion of the use of stove is followed by central heating for one dwelling (combi boilers, etc.) with 25.6 per cent, central heating for one or more buildings with 11.4 per cent and electric heater, air conditioner and other systems with 5.9 per cent (see Table 9. Households by main type of heating in the dwelling). Table 9. Households by main type of heating system in the dwelling Source: Turkstat PHC 2011 • Which actors own these dwellings (private persons, profit or non-­profit organisations, etc.)? Neither the 2011 Census nor any other statistics provide information as to the proportion of the owners of the dwellings. While most of the residential buildings are privately owned by natural persons or legal entities, there are also state-­owned public buildings that are used for residential purposes. Such public dwellings are either provided to civil servants as ‘lojman’ or rented out subject to the same system as private tenancy (see 4.3 below). 1.5 Other general aspects • Are there lobby groups or umbrella groups active in any of the tenure types? If so, how are they called, how many members, etc.? Lobby groups or umbrella groups are generally not strong in Turkey. While, for instance, a tenants association officially exists, in the absence of institutional support, it is effective only to a small extent unlike those in the EU states. Established in 2005, the Tenants Association (Kira-­Der, Kiracılar Derneği) aims at raising awareness of the rights of tenants in Turkey. Besides giving information on legal issues to its members, Kira-­Der provides for legal guidance in cases of conflict with landlords. Membership is free of charge. 22 On the other hand, more institutionalised associations like KONUTDER and GYODER have been remarkably active in the last decade in real estate sector. KONUTDER (Konut Geliştiricileri ve Yatırımcıları Derneği, Housing Developers and Investors Organization), established in 2011 by sixteen housing producers and forty-­seven real persons, aim at strengthening the housing production, eliminating structural and cyclical problems of the sector for housing producers and investors and improving the competitive capacity of its members.73 GYODER (Gayrımenkul ve Gayrımenkul Yatırım Ortaklığı Derneği, Association of Real Estate and Real Estate Companies), established in 1999 by the existing twelve real estate investment companies to promote the real estate industry in Turkey, aims at providing leadership in the Turkish Real Estate Industry by means of assembling all segments of the industry under the same roof. GYODER has one hundred and sixty-­six members from different sectors including financial, legal, media, construction, service, architecture, and consultancy.74 • What is the number (and percentage) of vacant dwellings? There are no official statistics on the number and percentage of vacant dwellings. While the majority of the unofficial information on the housing sector indicates demand in the real estate sector, a large number of unsold housing units in Istanbul have been reported recently. According to the report, “the inventory of unsold housing has risen to 1.5 million compared to zero several years ago.”75 • Are there important black market or otherwise irregular phenomena and practices on the housing market (especially the rental market)? Renting of illegally built dwellings in the gecekondu neighbourhoods causes major concerns as to the health of the tenants as well as sanitary and environmental problems. These dwellings might be of low quality, but are still rented by families because of poverty and despair. Landlords are required to pay income tax on their rented out apartments. In order to avoid paying tax, some landlords do not register tenancy contracts at the tax authorities. Unregistered contracts widely exist. Likewise, some landlords declare their rental income less than its actual amount in order to pay less tax (see Taxation in 3.7). 73
Housing Developers and Investors Organization, http://www.konutder.org.tr/en/homepage (retrieved 10 March 2015). 74
Association of Real Estate and Real Estate Companies, http://www.gyoder.org.tr/en (retrieved 10 March 2015). 75
Landon, T. ‘Alarm over Istanbul’s Building Boom’. The New York Times, 20 May 2014 http://www.nytimes.com/2014/05/21/realestate/commercial/after-­istanbuls-­building-­boom-­come-­worries-­of-­
a-­bust.html?_r=0 (retrieved 17 February 2015). 23 Summary table 1. Tenure structure in Turkey, 2011 Home Renting Intermediate tenure ownership Private rental 67.3 % 23.8% “Lojman” (owned by governmental or private organizations) 1.5% Other Total No home ownership but no rent is paid either 7.3% 100% Note: The assumption is that the overall tenure structure is based on the stock of non-­
vacant principal dwellings. If this is not the case in your country, please specify what type of accommodation the numbers include (think of holiday dwellings, second homes, collective homes, hotels, caravans, ships, vacant dwellings, non-­permanent habitation). Moreover, please mention if the numbers are not based on dwelling stock, but on households. For EU-­countries Housing Statistics in the European Union would be a possible source, although more updated data would be preferred, if available. 2. Economic urban and social factors 2.1 Current situation of the housing market • What is the current situation of the housing market? Is the supply of housing sufficient/ insufficient and where is this the case (possibly in terms of areas of scarcity of dwellings in growth areas versus shrinkage areas)? What have been the effects of the current crisis since 2007? Increasing population, migration to big cities and the traditional understanding of housing as an effective investment tool have a big impact on the housing market. The long-­
standing gap between the housing supply and demand in Turkey has decreased within the last decade. However, illegal constructions have also played a role in meeting the demand which, in the long term, indicates a potential increase in the housing needs given the low quality and insecure legal status of these constructions. Especially, in cities with increasing population and cities with higher amount of illegal buildings, a high demand for housing exists. 76 Figure 2 below shows the housing demand and supply between the years 2002 and 2008. 76
Real Estate Industry Report, 6. 24 Figure 2. Housing demand and supply in Turkey Source: Deloitte Real Estate Industry Report The housing demand has been roughly around 600,000 between 2002 and 2008. After 2008, despite the increase in the housing supply –especially large scale housing production by TOKI– the housing demand has not decreased either. In June 2013 it was declared by the president of TOKI that the yearly housing need of Turkey was 500,000– 600,000. 77 • How is the demand for housing expected to develop? What is the expectation about the growth and decline in number of households in the future in a scenario of average economic development? Is there a year forecasted where growth in number of households will stabilize or will start declining? Studies on housing demand forecasts in Turkey are threefold based on a causal categorization;; due to the population increase and urbanisation, due to the urban transformation, and due to the renewal activities. The population of Turkey, around 77.5 million by 2014 is expected to reach 84 million by 2023 and 88.5 million by 2030. The growth rate of the population is considerably large as compared to some EU countries (See Figure 3. Population growth in selected countries).78 77
‘TOKI Başkanı: 600 bin konuta ihtiyaç var’ http://www.memurlar.net/haber/380753/ (retrieved 30.September 2013). 78
Real Estate Industry Report, p. 16. 25 Figure 3. Population growth in selected countries Source: Deloitte Real Estate Industry Report The urbanisation rate, growing along with the population, has been reported 76.8 per cent in 2011 and it is estimated to increase up to 84.0 per cent by 2023. According to the GYODER’s report ‘Real Estate Sector In the Vision for 2023’ (Vision for 2023 Report)79, the urban population will increase from 57.4 million in 2011 to 71.14 million in 2023, whereas the rural population will decline from 17.338 million in 2011 to 13.552 million in 2023 (see Table 10. Urbanization and urban population forecasts). Table 10. Urbanization and urban population forecasts Source: GYODER Real Estate Sector in the Vision of 2023 As the urbanisation rate increases the population per household declines. In that vein, as the Vision 2023 Report shows, the population per household which was 4.12 in 2010 will decline to 3.79 people by 2023. Consequently, the number of urban households will increase from 13.93 million in 2011 to 18.77 million in 2023 (see Table 11. Urban population and number of households and household population forecasts). 79
Gürlesel, C. F. Real Estate Sector in the Vision of 2023. Translated by Saylon Consultancy. Istanbul: GYODER, 2012. 26 Table 11. Urban population and number of households and household population forecasts Source: GYODER Real Estate Sector in the Vision of 2023 Depending on the just-­mentioned increase in the number of the households, the housing need due to the population increase and urbanisation is estimated to be 4.84 million residential units in 2023. It is further estimated that migration related housing needs will be saturated only by 2025.80 The ongoing and planned urban transformation projects will also cause a significant increase in the housing needs in the next decade. It is estimated that a total of 5.3 million flats will be subject to urban transformation as they are either without permit or with permit but carry a high risk in case of natural disasters, specifically earthquakes. The current plan envisages the production of 200 thousand residential units per year until 2023.81 The third kind of housing need estimated to be influential in the housing sector in the next decade is the renewal requirement of the existing buildings which have completed their physical life spans. 3.1 million units will be over the age of 50 until 2023. Based on a calculation of assumed rate of 0.5 per cent over the total housing stock, 90 thousand dwellings will have to be renewed and when the +50 years factor is considered, where a ratio of 2 per cent is used, 60 thousand dwellings will have to be renewed. Considering that a certain portion of the dwellings would probably be renewed within the framework of the urban transformation projects, it is forecasted that each year 50 thousand dwellings will have to be renewed. A total number of 600 thousand dwellings will require renewal.82 To sum up, the demand for housing arising from the three main sources, namely the population increase and urbanisation, urban transformation, and renewal, is assumed to be 7.56 million for a period of twelve years between 2012 and 2023. The table below shows the demand for each of the three sources (see Table 12. Residential requirement forecasts in Turkey 2023). 80
Gürlesel, 39, 18. Ibid, 39. 82
Ibid, 40. 81
27 Table 12. Residential requirement forecasts in Turkey 2023 *Thousand units Source: GYODER Real Estate Sector in the Vision of 2023 • What is the number/percentage of families/households depending on rental housing (vs. owner-­occupancy and other forms of tenure)? What is the number/percentage of immigrants among them? In 2011, it was reported that 4.637 million households (23.8 per cent) depended on rental housing, as compared to 13.099 million (67.3 per cent) who resided in own dwellings and to 1.719 million (8.8 per cent) who were not tenants as either they lived in lojmans or did not pay rent on private grounds. No information is available on the number or percentage of immigrants among holders of any type of tenures. 2.2 Issues of price and affordability • Prices and affordability o What is the typical cost of rents and its relation to average disposable income (rent-­income ratio per household)? (Explanation: If rent is 300€ per month and disposable household income 1000€ per month, the rent-­to-­income ratio is 30%). The costs of residential rents differ drastically according to a number of factors such as the location, the size, and the quality of the dwelling, and even the negotiations with the landlord. It has been reported in April 2014 that the average rent per square meter is TLR 14.83 According to the 2013 Inflation report issued by the Central Bank of Turkey, tenants spend approximately 30 per cent of their household incomes on rent. The rent-­income ratio reaches 50 per cent of household head.84 83
‘Nisan 2014 Emlak Endeksi Aciklandi’, Hürriyet Emlak, 20 May 2014, http://www.hurriyetemlak.com/nisan-­2014-­emlak-­endeksi-­aciklandi!/emlak-­yasam-­sektorden-­
haberler/aXrVHO3L9rw= (retrieved 20 May 2014). 84
Central Bank of the Republic of Turkey, ‘Enflasyon Raporu 2013-­IV’, 2013, http://www.tcmb.gov.tr/research/parapol/4b13-­4.pdf (retrieved 2 December 2013). 28 A TurkStat research in 2012 on the distribution of household consumption expenditures show that housing and rent expenses constitute 25.8 per cent of the total amount of expenditures which is the highest share85 (see Figure 4. Distribution of consumption expenditures of households by expenditure types). Figure 4. Distribution of consumption expenditures of households by expenditure types Source: TurkStat The data from the TurkStat show that rent expenses of tenants are TLR 2.011.840.043 and other housing expenditures (repair and maintenance, municipal water) of tenants are TLR 269.764.121 whereas the same expenditures for home owners are respectively TLR 16.652.455 and TLR 1.073.758.244. Consequently, total housing expenditures amount to TLR 2.281.604.164 for tenants and TLR 1.090.410.699 for home owners. o To what extent is home ownership attractive as an alternative to rental housing o What were the effects of the crisis since 2007? Home ownership has always been preferred to rental housing given its cultural perception as a source of pride and as an investment tool. Also, many households prefer home ownership in order to avoid potential problems with landlords. Traditionally, home ownership has been a strong means of investment for many households. Home ownership is not only regarded as a matter of shelter but also a matter of earning capital returns and a common investment tool for the children and the next generations. This understanding has caused the emergence of a class of home owners 85
Turkish Statistical Institute, ‘News Release No: 13579’ 4 September 2013, http://www.turkstat.gov.tr/PreHaberBultenleri.do?id=13579# (retrieved 2 December 2013). 29 who are asset-­rich. These multi-­owner households who do not pay rent themselves and earn rental incomes represent a prevalent understanding of “mercenary ownership.”86 The preference of home ownership to tenancy has not been affected strongly by the economic crisis, as explained in the sections below. 2.3 Tenancy contracts and investment • Is the return (or Return on Investment (RoI)) for rental dwellings attractive for landlords-­investors? o In particular: What were the effects of the crisis since 2007? According to a research conducted by Global Property Guide including on resale apartments and houses only (i.e. yields for newly built properties are not included), the gross rental return in Turkey is 5.5 per cent. This ratio varies in different cities and in different parts of a city.87 As an investment tool, the time needed to amortise a dwelling has been around seventeen years in Turkey. This period is shorter in Istanbul;; thirteen years in average.88 • To what extent are tenancy contracts relevant to professional and institutional investors? o In particular: may a bundle of tenancy contracts be included in Real Estate Investment Trusts (REITS) or similar instruments? o Is the securitization system related to tenancies in your country? Are commercial (or other) landlords allowed to securitize their rental incomes? If yes: Is this usual and frequent? Real Estate Investment Trusts (GYOs) were established after 1998 and became increasingly important in the Turkish real estate sector. REITs are established in the form of joint-­stock company. Their activities include renting out the real estate in their portfolios as well as buying and selling real estate and investing in projects relating to real estate. Their capital is registered and they issue shares. REITs enjoy the same tax incentives as those provided to mutual funds.89 Currently, there are twenty-­nine REITs in Turkey;; their activities mostly focus on residential buildings and shopping malls. It is possible to conclude tenancy contracts with REITs. There is no compiled data as to the number of residential buildings that are owned, sold or rented out by REITs. But it is possible to see the portfolios of all the REITs in Turkey, as these are all publicly accessible. 86
Sarıoğlu-­Erdoğdu 101. Global Property Guide ‘Gross Rental Yields -­ Turkey Compared to Continent’, http://www.globalpropertyguide.com/Europe/Turkey/rent-­yields (retrieved 2 December 2013).. 88
‘Nisan 2014 Emlak Endeksi Aciklandi’, Hürriyet Emlak, 20 May 2014, http://www.hurriyetemlak.com/nisan-­2014-­emlak-­endeksi-­aciklandi!/emlak-­yasam-­sektorden-­
haberler/aXrVHO3L9rw= (retrieved 20 May 2014). 89
Capital Markets Board of Turkey, http://www.cmb.gov.tr/indexpage.aspx?pageid=5&submenuheader=5 (retrieved 3 December 2013). 87
30 Securitization is not relevant to tenancy in Turkey and the securitization of rental income is, likewise, not usual. 2.4 Other economic factors • What kind of insurances play a role in respect to the dwelling (e.g. insurance of the building, the furniture by the landlord;; third party liability insurance of the tenant?)? There are no obligatory insurances for tenants, whereas for the owners of the dwelling, disaster insurance is obligatory. In practice, tenants might be compelled by the landlords to take over the insurance. Since 18 August 2012, dwellings specified under the Disaster Insurances Law90 should be insured against natural disasters by a specific insurance type colloquially known as ‘compulsory earthquake insurance. The disaster insurance is compulsory merely for the owners. On the other hand, the law requires that the existence of the compulsory insurance should be controlled by the relevant institutions when the residents apply for water and electricity subscriptions. Therefore, in practice, tenants have to make sure that their landlords have taken out the policies, and they are sometimes obliged by the landlords to take over the insurance expenses. Other insurances against fire, theft, etc. also play a role in relation to dwellings. These insurances are recommended but they are not mandatory. • What is the role of estate agents? Are their performance and fees regarded as fair and efficient? Although real estate agents play a significant role especially in renting in big cities in Turkey, there is still a lack of legal support and institutional infrastructure. Their services typically include accompanying the customers to the relevant dwelling and this service should be free of charge, although in practice sometimes such cases where they request additional fees exist. The fees are commonly 2 per cent of the sale price to be paid by both buyer and seller in case of sale, and 10 per cent of the annual rental fee to be paid by the tenant in case of renting. Legislative proposals on the services, rights and duties of the real estate agents have been made and a relevant code is expected to be passed by the parliament. 2.5 Effects of the current crisis • Has mortgage credit been restricted? What are the effects for renting? • Indicate the current figures on repossession (seizures of houses in case of mortgage credit default of the buyer)? Have repossessions affected the rental market? 90
Disaster Insurance Law No. 6305 (2012), O.J. 28296/18 May 2012 (Afet Sigortaları Kanunu). 31 • Has new housing or housing-­related legislation been introduced in response to the crisis? Turkey has faced several financial crises arising from the banking sector;; 1982-­1985, 1994-­1995 and 2000-­2002 being the most destructive. The 2001 crisis has radically changed both economic and political situation of the country and due to the following economic reforms Turkey had an economic growth in 2003–2007 period.91 These reforms and the experience from previous crises had a positive impact on the macro economic stability and recovery from the 2008 crisis. Due to its close links with hot money flow, the Turkish economy has been one of the most affected countries by the global crisis. However, despite the negative consequences observed in Turkey as in other countries, Turkish economy has been effected relatively less than crisis countries;; no financial firm failures, toxic assets or asset purchase programmes were observed in Turkey.92 During the period following the 2001 crisis, housing loan volumes of the banking institutions showed a remarkable growth. The number of individuals using housing loans increased from 42 thousand in December 2003 to 526 thousand in March 2007 and the amount from TLR 0.8 billion to TLR 23.2 billion in the same period. The increase in housing loans in Turkey continued even in the second half of 2007, when the global crisis started to affect the markets. Indeed, housing loans amounted to TLR 32.4 billion in 2007 and 39.3 billion in 2008.93 In March 2007, the total amount of consumer credits subject to legal proceedings was TLR 155.4 million and only TLR 31 million of it was related to housing loans. Such low amount of non-­performing housing loans was thus far from causing an economic crisis.94 Further, having learned its lesson from the 2001 crisis, Turkish banking system has performed well in coping with the crisis resulting from credits, by using derivative instruments. More importantly, the Turkish banking sector does not traditionally provide for real estate loans with very low guarantee. The fact that the Turkish banking system lacked proper secondary market products such as securitisation and structured products have also made the sector more vigilant to the risks of the primary mortgage market.95 In 2009, home ownership has increased 4.1 per cent. This increase, despite the economic crisis, results from the housing stock, shortage of cash, decline of prices due to the crisis, tax reductions and the decrease of the interest rates in the first quarter and the competition among the constructors willing to deplete the stocks in order to overcome the cash flow problem.96 Figure 5 below shows the change in house ownership in quarters. The growth rate of house ownership has declined until the second quarter of 2010. In the third quarter it has increased to 2.9 per cent and then declined again to 1.2 per cent in the last quarter. 91
Coşkun, Y. ‘The Global Financial Crisis and the Turkish Housing Market: Is There a Success Story?’. Housing Finance International 25, no.3 (2011): 6–14. 92
Ibid. 93
Coşkun, Y. ‘Küresel Finansal Kriz ve Kredilendirme ve Değerleme Sorunları: ABD ve Türk İpotekli Konut Finansman Sistemleri Hakkında Bir Değerlendirme’. TMMOB Harita ve Kadastro Mühendisleri Odası İstanbul Şubesi Yayını (2009): 223–249. 94
Ibid. 95
Ibid. 96
Sancak, Ercan & Erkan Demirbaş, ‘Küresel Ekonomik Kriz ve Konut Sektörüne Etkileri’. Süleyman Demirel Üniversitesi İktisadi ve İdari BilimlerFakültesi Dergisi 16, no. 3 (2011): 171–190. 32 Figure 5. Ownership rates in quarters Source: DPT (State Planning Organisation) Figure 6 below, shows the fluctuations in housing prices between 2006 and 2010 basing on 12-­month average percentages. Whereas in 2007 housing prices have declined 1.4 per cent of the previous year, in 2008 an increase of 19.6 per cent took place. After this peak in 2008, the housing prices declined again in 2009 and 2010, by 8.8 per cent and 6.3 per cent respectively. Figure 6. Housing prices in 2006–2010 Source: TurkStat The number of sales in the housing sector started to drop in the second quarter of 2008 and declined to 92.516 in the fourth quarter. The first two quarters of 2009 saw the increase in the sales whereas in the third quarter it declined again to 85.000 and reached 97.000 in the last quarter (see Figure 7. Sales in the housing sector in quarters.) Figure 7. Sales in the housing sector in quarters Source: TurkStat 33 A number of regulations related with loans and liquidity and other financial matters were introduced as a response to the crisis. However, none of them are specific to housing. 2.6 Urban and social aspects of the housing situation • What is the distribution of housing types in the city scale (e.g.: are rented houses mainly in the city centres and owner occupied in the suburbs?) vs. the region scale (e.g.: more rented houses in the big cities, less in the villages?) The distribution of housing types ranges according to the population of the province and the level of the development of the region. In the western cities of Turkey –those which are more developed than the eastern ones– the number of rental tenure is higher than the eastern ones which have the highest home ownership. In the eastern part of Turkey, the number of owner occupied dwellings is the highest, ranging from 78.1 per cent to 84.3 per cent, whereas in western cities it lags behind, amounting only from 59.5 per cent to 69.6 per cent. Similarly, the big provinces (Istanbul, Ankara, Izmir, Bursa, Antalya, Gaziantep), have the lowest owner occupancy rate, 59.5 per cent – 64.7 per cent. On the other hand, Bolu and Tunceli have the same rate although they are not among the ten big cities of Turkey. Figure 8 below shows the proportions of the home ownership on a province-­base across Turkey. According to the Figure, provinces with the highest proportions of owner occupied dwellings are Ardahan (84.3 per cent), Ağrı (82.2 per cent) and Muş (82.1 per cent). Provinces with the highest proportion of rental housing are Istanbul (31.5 per cent), Ankara (30.2 per cent) and Antalya (29.9 per cent). Figure 8. Proportion of households who are owners of the dwelling they reside Source: TurkStat PHC 2011 • Are the different types of housing regarded as contributing to specific “socio-­urban” phenomena, e.g. ghettoization and gentrification 34 Ghettoization and gentrification have been almost inexistent until recently in the ways these concepts are understood in the international context. With the urban renewal projects of the TOKI which have gained weight specifically in the last decade, ghettoization and gentrification have started to become a social issue by the existence of a considerable social group who have been directly or indirectly forced to leave their neighbourhoods and move to certain places, usually outskirts of the city centres. These groups, whose socialization chances with the rest of the society other than their neighbours, are composed of both tenants and home owners;; their tenure type does not play a significant role. • Do phenomena of squatting exist? What are their – legal and real world – consequences? Squatting, especially on state-­owned land has been a major problem in big cities as discussed in previous sections (see Historical evolution of the national housing situation and housing policy in 1.2). Despite the existing laws to prohibit and prevent squatting, it has been socially regarded as an acceptable way of home ownership in practice by local authorities. As far as squatting private properties are concerned, it is socially less acceptable and also not difficult for the owners of the property to evict the squatters. Squatting is a violation of the dwelling immunity and is penalised under the Criminal Code. The Turkish law does not allow property acquisition through squatting. Acquisition of property by means of adverse possession is subject to strict conditions set out in the Civil Code. 2.7 Social aspects of the housing situation • What is (are) the dominant public opinion(s) towards certain forms of rental types or tenure forms? (e.g. is renting considered as socially inferior?) In particular: Is only home ownership regarded as a safe protection after retirement? • What is the typical attitude of tenants towards different forms of tenure (e.g. owners of privatised apartments in former Eastern Europe not feeling and behaving as full owners). Despite the clear social perception of the superiority of home ownership over rental housing and despite the desirability of owning several dwellings, tenancy is not socially considered gravely inferior. Whereas for the previous generations, the tenure type of a household was an important clue on their economic situation and social standing, this approach have started to disappear by the increasing number of well-­educated families who prefer to live in rented apartments for various reasons. Nevertheless, for some socio-­
economic classes a social difference –no matter how subtle it might be– between home owners and tenants exist. As for the inhabitants of gecekondu neighbourhoods, for a long time there has been a moral legitimacy based on the recognition of the need for shelter as a basic need, but this 35 legitimacy was lost by the late 1990s.97 On the other hand, they are not regarded as members of an inferior social class. Home ownership is generally regarded as a safe protection after retirement. In the absence of efficient social welfare systems, the Turkish households are almost “forced to become home owners where there is almost no better chance”.98 Home ownership, for the Turkish, is therefore not only a means of sheltering but also a safe solution to future concerns of the family.99 Summary table 2. Urban and Social Aspects of the Housing Situation Home ownership Renting with Renting a public task without a (‘lojmans’) public task Dominant public opinion Superior Usually respected as certain civil servants or members of military Etc. Slightly inferior (for some –– circles only) Contribution to gentrification? Impact of gentrification is a newly emerging problem Contribution to ghettoization? Ghettoization is an emerging problem Squatting? Squatting has been a serious problem but has eased to some extent 3. Housing policies and related policies 3.1 Introduction • How is housing policy related to the structure and concept of the (national) welfare state, to other welfare policies and the tax system? A clear classification of the Turkish welfare regime has not been offered so far. While the Turkish system has different characteristics from the liberal, corporatist and social democratic welfare regimes in developed countries as classified by Esping-­Andersen, it 97
Bugra, Ayse & Çaglar Keyder, ‘The Turkish Welfare Regime in Transformation’. Journal of European Social Policy 16, no. 3 (2006): 211–228. 98
Sarıoğlu-­Erdoğdu, 100, 101. 99
Ibid. 36 shows a similarity with the Southern European model of welfare and has been classified, by some scholars, in the same group as Greece, Italy, Portugal and Spain. In that vein, like in the southern European or the Mediterranean rudimentary model, the family has a central role in the Turkish welfare regime along with the state’s role as employer and provider.100 The reflections of the Turkish welfare regime on the housing policy can be observed specifically through three informal pillars;; the continuing ties of newly urbanized immigrants with their villages of origin, the importance of family and neighbourhood assistance mechanisms and the possibility of informal housing. However, these pillars have been also in transformation as a result of economic social and political developments and can no longer provide socio-­economic security to the individual.101 Traditionally, the first waves of the rural-­urban migration had not affected the strong ties of the migrants with their relatives in the village letting them rely on income supplements from their villages. Similarly, strong family assistance mechanisms had contributed to the housing needs of individuals through financial support or other forms such as allocating apartments to close family members free of rental charge. Possibilities of informal housing and thus the formation of gecekondu neighbourhoods as discussed previously, is also closely related to the transformations observed in urban space since 1980s. Immigrants at this period who have occupied public land became the owners of those houses as these illegal settlements were eventually formalized. Furthermore, they could even go up in floors or expand their buildings to obtain rental income. Thus these squatter houses became a source of wealth and security. Informal networks based on kinship or co-­locality ties had a significant role in finding the appropriate plot, constructing the house and carrying out the formal procedures at a later stage.102 On the other hand, those traditional mechanisms of support have become less significant in the last two decades with the changing nature of rural-­urban migration, difficulties for the new immigrants in finding plots in the same neighbourhood as their relatives and co-­
locals, the halt of the development of gecekondus and the weakening of the role of the family as a result of the decline in fertility rates, ageing of the population and the rise of the nuclear family norm.103 • What is the role of the constitutional framework of housing? (in particular: does a fundamental right to housing exist?) Article 57 of the Constitution of Turkey provides for a right to housing in its second part on “fundamental rights and duties”, third chapter on “social and economic rights and duties” under the title health, the environment and housing. According to Article 57, “the State shall take measures to meet the need for housing within the framework of a plan that takes into account the characteristics of cities and environmental conditions, and also support community housing projects.” 100
Bugra & Keyder, 212. Ibid, 220. 102
Ibid. 103
Ibid, 220–221. 101
37 While this provision gives the state the duty to adopt the necessary policies to provide the citizens with adequate housing, it does not grant the citizens the right to demand individually any housing units. 3.2 Governmental actors • Which levels of government are involved in housing policy (national, regional, local);; what are they called;; how many are there of each? • Which level(s) of government is/are responsible for designing which housing policy (instruments)? • Which level(s) of government is/are responsible for which housing laws and policies? National government is the most influential actor through a number of institutions. Generally speaking, the Turkish administrative system consists of central ministries whose involvement in city affairs is coordinated by a governor directly appointed by central government. At the city level, metropolitan municipalities have a certain role in housing production as well as some other local institutions affiliated with the central government. At the local level, there are subdivisions or districts (ilçe) which have their own municipalities. Regional level has generally less role in the governance than the central and city levels despite the recent establishment of twenty-­six development agencies to assist in the coordination between the municipal and central bodies as well as civic institutions for budgeting and planning of large-­scale urban projects.104 There is no specific national housing act. The legislation on housing comprises a number of acts and other legal instruments, each dealing with a certain aspect of housing policy. Since social housing system as understood in Europe does not exist, relevant law on social housing involves ownership and providing affordable housing which is in practice not really affordable for low income groups. Since the 2000s, the most important actor in the housing policy is the Housing Development Administration of Turkey (TOKI). TOKI determines general policies on providing lands and housing and the land production areas with priority. Other institutions at governmental and municipal level also have certain functions in designing and implementing the housing policy. These institutions and the relevant legislation is briefly described below. TOKI TOKI is directly linked to the prime ministry. The main function of TOKI is to develop housing projects and to provide housing financing in order to increase the housing supply. It aims at producing housing for the low and medium income groups. The mass housing model as developed and implemented by TOKI is currently the dominant model of the housing production. In addition, TOKI develops urban transformation (urban renewal) projects in cooperation with municipalities. The Mass Housing Code (1984) grants special powers to TOKI for the development of large scale construction of urban settlements in Turkey. The mass housing production envisaged within the ambit of the law are disaster 104
Elliott, 8. 38 housing, urban transformation projects, housing production on mass housing areas for low and middle income groups, agriculture villages and social housing fund raising projects, land provision and production in cities.105 Municipalities Municipalities are granted certain responsibilities by various laws. Their main responsibilities related to housing are as follows: the preparation of land-­use plans within the boundaries of municipalities and adjacent areas, determination of squatter areas and upgrading zones and preparation and approval of their land-­use plans, preparation and approval of upgraded implementation plans, the construction and occupancy permits, and the approval of land-­use plans related to land uses other than tourism in tourist areas and centres. 106 As regards the national housing policy, municipalities were left outside until 2000s when the indigenisation became an important governmental policy. Their role in housing sector has significantly increased after the adoption of the Municipality Code107 in 2005 which entitles municipalities to provide plots with complete infrastructure within the municipal boundaries and contiguous areas as well as to engage in purchase, expropriation, exchange of plots for construction, lease of mass housing and to cooperate with the financial and public institutions to conduct joint housing projects. However, despite the legal infrastructure for including the municipalities within the development and implementation of housing projects, their role in practice has been limited since TOKI became a property developer and minimized its cooperation with municipalities as well as with housing cooperatives.108 Ministry of Environment and Urban Planning The former Ministry of Public Works and Settlement found in 1983 (by the merger of Ministry of Public Works and the Ministry of Development and Housing) was renamed in 2011. The Ministry of Environment and Urban Planning sets the standards for construction activities financed by public funds and provide their enforcement aiming safe and modern constructions in urban and rural areas. In 2012 the ministry has been assigned for the detection and renovation of the constructions under risk in disaster risk areas.109 The State Planning Organisation (DPT) The State Planning Organisation (Devlet Planlama Teşkilatı, DPT) develops medium-­to-­
long term plans for the public construction projects. These development plans have long been the basic source for the national housing and urbanisation policy. However, the Ninth Development Plan (2007–2013), unlike previous plans, did not include any title regarding the housing sector or any provision on the housing policy to be followed. This caused 105
See official website of TOKI, http://www.toki.gov.tr Ibid, 37. 107
Municipality Code No. 5393 (2005), O.J. 25874/13 July 2005 (Belediye Kanunu). 108
Karasu, 263. 109
European Commission, 'Infrastructure for Spatial Information in the European Community’, http://inspire.ec.europa.eu/index.cfm/pageid/42/list/6/id/38770 106
39 uncertainty and debates on the process of developing housing policy.110 The Tenth Development Report, effective for 2014–2018, includes a title on the urban transformation and housing. Governorates At provincial level, governorates have related functions such as the preparation and approval of land-­use plans outside the municipal and adjacent area boundaries, the announcement of mass housing areas and the determination of village settlement areas and approval of their plan.111 Regional institutions In addition to the above, the South Eastern Anatolian Project Regional Development Administration and the Regional Councils of Cultural and Natural Resources Protection Councils have relevant responsibilities at the regional level. The first is responsible for the use of rights and competence in planning and infrastructural issues in South-­Eastern Anatolian Region Provinces. The latter one is responsible for giving instructions on land-­
use plans with conservation objectives in urban and archaeological natural conservation areas.112 3.3 Housing policies • What are the main functions and objectives of housing policies pursued at different levels of governance? o In particular: Does the national policy favour certain types of tenure (e.g. rented housing or home ownership (owner-­occupation)? As a result of the general elections in 2002, the Justice and Development Party (Adalet ve Kalkınma Partisi, AKP) came to power alone, winning over two-­thirds of parliamentary seats. The new government, which was re-­elected and still in power, issued an Immediate Action Plan in 2003 which set the main objectives of the current housing policy. The Plan has specified two priority areas: the prevention of squatting (namely finding a solution for the long-­standing gecekondu problem) and the initiation of a housing production campaign.113 In accordance with the Plan, the Law No. 2985 was amended in 2003 and new tasks were assigned to TOKI. Among these new tasks were establishing companies related to housing as well as becoming partner to the existing ones, providing individual and collective loans, providing loans for the urban transformation projects, producing houses, 110
Ministry of Public Works and Settlement (Turkey), ‘KENTGES Integrated Urban Development Strategy and Action Plan 2010-­2023’ Ankara: 2009. 111
Planning Code No. 3194 (1985) O.J. 18749/9 May 1985, Mass Housing Code No. 2985(1984), O.J. 18344/17 March 1984, Village Code No. 442 (1924), O.J. 68/ /336 7 April 1924 (Köy Kanunu), Elliott, 37. 112
Elliott, 37. 113
T.C. 58. Hükümet Acil Eylem Planı, http://ekutup.105 dpt.gov.tr/plan/aep.pdf (retrieved 15 October 2013). 40 infrastructure and social facilities. Consequently TOKI has become an actor directly involved in the housing production process.114 After the initiation of the so-­called Planned Urbanization and Housing Production Program in 2003, TOKI has started the construction of 608.263 housing units, 563.440 of which have been finished and delivered by October 2013.115 The Marmara Earthquake in 1999 had caused around 17,000 deaths and left around 500,000 people homeless revealing the poor construction of the buildings. It was reported that in 2005, three quarter of the population lived in areas highly vulnerable to earthquakes and are highly vulnerable to loss of life as well as property from earthquakes.116 The poor construction of most dwellings especially of those in gecekondu areas has been the major driving factor for the recent Turkish housing policy and the development and implementation of the urban transformation projects. Besides urban transformation, TOKI’s housing program, including social housing production, disaster housing, agricultural village projects and migrant dwellings, base on merely home ownership. It is worth repeating that social housing in Turkish housing parlance merely implies housing production for lower income groups and the social housing projects merely target increasing the home ownership countrywide. A famous speech by then-­Prime Minister Erdogan illustrates the Turkish housing policy which clearly favours home ownership and furthermore considers home ownership as the only solution to housing. In 2007, describing the goals of the new government and the projects of TOKI, Erdogan has stated “our main goal is to make each family home owner until 2013... We will ensure that especially the low income group will become home owners within five years.”117 This approach is not new to the traditional Turkish housing policy which leaves out any other type of housing tenures than the ownership. Tenancy has been ignored even in the case of projects aiming to upgrade squatters or reconstruct settlements after natural disasters. o Are there measures against vacancies (e.g. fines or forced assignments of vacant houses)? There are no measures against vacant houses in Turkey. As renting is regarded as a profitable investment and there is always a demand for rental housing especially in big cities, landlords avoid leaving their apartments vacant even for short periods. There are, on the other hand, households who have multiple dwellings and keep a secondary apartment furnished, usually in another city, for themselves and for family members. o Are there special housing policies targeted at certain groups of the population (e.g. migrants, Sinti and Roma etc)? 114
Çoban, 97. TOKI, http://www.toki.gov.tr/baskan/HPR.asp (retrieved 15 October 2013). 116
Elliott, 57. 117
‘2013’e Kadar Herkes Ev Sahibi Olacak’, Haber Türk,12 September 2007, http://www.haberturk.com/yasam/haber/35781-­2013e-­kadar-­herkes-­ev-­sahibi-­olacak (retrieved 15 October 2013). 115
41 Migrant Dwellings In some cases, when deemed required, TOKI provides for housing to political asylum seekers. In 1990 Migrant Dwellings Coordinatorship was established in order to provide shelter and housing for more than 300 thousand migrants from Bulgaria with Turkish origins. This task was later assigned to TOKI in 2004. In order to meet the needs of migrant families, TOKI is in charge of the coordination of certain projects for a total of 23,495 dwellings.118 Romas The urban renewal projects have caused several social issues for the Roma neighbourhoods. It can not be said that the Roma population was directly targeted in the first place but many Roma neighbourhoods had to be upgraded within the framework of the urban renewal projects. They were directly or indirectly forced to sell their apartments for low prices or had to face expropriation decisions and move to other districts. While homeowners who had to move to unfamiliar places suffered from socialisation problems, it was even harder for tenants;; some of them became homeless as it was impossible for them, because of their identity. to find any rental apartments outside Roma neighbourhoods. 3.4 Urban policies • Are there any measures/ incentives to prevent ghettoisation, in particular: o mixed tenure type estates119 o “pepper potting”120 o “tenure blind”121 o public authorities “seizing” apartments to be rented to certain social groups o Other “anti-­ghettoisation” measures could be: lower taxes, building permit easier to obtain or requirement of especially attractive localization as a condition to obtain building permit, condition of city contribution in technical infrastructure. Ghettoisation has only recently been regarded as a potential social threat for Turkey. Given the absence –or the absence of the recognition– of such problem, no state policy has so far involved adopting any measures or incentives to prevent ghettoisation. On the 118
See http://www.toki.gov.tr Mixed tenure means that flats of different tenure types: rented, owner-­occupied, social, etc. are mixed in one estate, it is the simplest way of avoiding homogenised communities, and to strengthen diversification of housing supply. 120
This mechanism is locating social housing flats among open market ones, so as not to gather lowest income families in one place. The concept is quite controversial, however in English affordable housing system was used for a long time to minimize the modern city ghettos problem. 121
This is a mechanism for providing social housing in a way that the financial status of the inhabitants is not readily identifiable form outside. It is used to avoid/minimize stigmatization and social exclusion which could be caused by living in a (openly identifiable) social stock. 119
42 contrary, it is the recent housing policy itself which is criticised to cause ghettoisation. Indeed, particularly the urban renewal projects are strongly criticised for ignoring their possible social outcomes by formation of new ghettos composed of the previous inhabitants of the renewed districts. As no social housing schemes exist, mechanisms such as pepper-­potting or tenure blind do not exist in Turkey. The gecekondu neighbourhoods are different from ghettos in many ways. They imply rather a socio-­economic class and their inhabitants are not excluded from the social life or the city life. On the other hand, their co-­existence in close areas with the high income level groups has caused the emergence of gated communities which become more and more widespread. The inhabitants of those gated communities usually have a certain life style and avoid socialising with people outside their social circles. Again, this phenomenon is at its relatively early stages (as compared to gecekondus);; its growth and potential disadvantages for the society have not yet received attention from the policy makers. • Are there policies to counteract gentrification? Gentrification is also a relatively new issue for Turkey which has gained weight with the urban renewal projects in 2000s. There are no clear policies to counteract gentrification. • Are there any means of control and regulation of the quality of private rented housing or is quality determined only by free market mechanisms? (does a flat have to fulfil any standards so that it may be rented? E.g.: minimum floor area, equipment, access to technical and/or social infrastructure and/or public transport, parameters such as energy efficiency, power/water consumption, access to communal services such as garbage collection. If so: how are these factors verified and controlled?) There are no direct means of control of the quality of private rented housing. While the buildings rented for business are subject to stricter controls, the only regulatory control for residential units comes at the stage of construction. The procedure of getting licences and building permits have been strengthened especially after the Marmara Earthquake in 1999 which revealed the amount of very poorly-­constructed dwellings. The units on the portfolio of the REITs, either for rent or for sale, are said to bear a certain level of quality. Other than that, the tenancy law requires that the apartment should be in a condition fit for its designated use which is determined by the contractual agreement and the requirements of its normal use.122 • Does a regional housing policy exist? (in particular: are there any tools to regulate housing at regional level, e.g.: in order to prevent suburbanisation and periurbanisation? Is it possible to distribute local taxes so that villages can afford the limitation of housing areas?) The housing policy is mainly developed at the national level. Municipalities have a very limited role in the implementation of housing projects in coordination with the central government. 122
Art. 301 Turkish Code of Obligations No. 6098 (2011), O.J. 27836/4 February 2011 (Türk Borçlar Kanunu). 43 3.5 Energy policies • To what extent do national and or local energy policies affect housing? Many buildings in Turkey are energy inefficient. Given the high rates of carbon dioxide emission and the combustion of fossil fuels, the building sector presents significant possibilities for cost-­effective energy and carbon dioxide savings, estimated at some 30–
50 per cent of the current levels.123 The application of energy efficiency in housing production projects of TOKI, the biggest house producer of Turkey, remains insufficient.124 A strategy paper, the Energy Efficiency Strategy Paper 2012–2023, was adopted in 2012. It sets the goals, among others, “to decrease energy demand and carbon emissions of the buildings;; to promote sustainable environment friendly buildings using renewable energy sources.”125 According to the Strategy Paper, at least one quarter of the building stock in 2010 shall be made sustainable building by 2023 under the responsibility of Ministry of Energy and Natural Resources and the Ministry of Environment and Urbanisation. A UNDP project financially funded by Global Environment Facility (GEF) on energy efficiency in buildings in Turkey is currently conducted in cooperation with the Directorate of Electrical Power Resources Survey and Development Administration, the Ministry of Public Works and Settlements, TOKI, and the Ministry of National Education. The projects aims to reduce energy consumption and associated GHG emissions in buildings in Turkey by raising building energy performance standards, improving enforcement of building codes, enhancing building energy management and introducing the use of an integrated building design approach.126 Summary table 3. Housing Policies National level Lowest level (e.g. municipality) Policy aims -­ Prevention of squatting -­ Encouragement of home ownership -­ Providing plots with complete infrastructure -­ Mass housing production -­ Purchase, expropriation, exchange of plots for construction, -­ Lease of mass housing -­ Cooperation with the financial and public institutions to conduct joint housing projects 123
Elliott, 78. Karaca, Mehmet & Çiğdem Varol “Konut Alanlarında Enerji Etkinliği – Toplu Konut İdaresi Başkanlığı (TOKİ) Toplu Konut Projeleri Üzerine Eleştirel Bir Değerlendirme’. METU JFA 2 (2012) 127–141. 125
Energy Efficiency Strategy Paper (2012), O.J. 28215/25 February 2012. 126
A brochure for the project ‘Promoting Energy Efficiency in Buildings’ is available at the UNDP official website: http://www.tr.undp.org/content/turkey/en/home/ 124
44 Laws -­ Mass Housing Code No. 2985 (1984) -­ Municipality Code No. 5393 (2005) -­ Municipal Revenues Law No. 2464 (1981) Instruments -­ Planned Urbanization and Housing Production Program (2003) -­ Land-­use plans -­ Determination of squatter areas and upgrading zones -­ Projects developed and -­ Construction and occupancy implemented by TOKI: permits -­ Disaster housing -­ Urban transformation -­ Housing production on mass housing areas for low and middle income groups -­ Agriculture villages -­ Social housing fund raising projects -­ Land provision and production in cities 3.6 Subsidization • Are different types of housing subsidized in general, and if so, to what extent? (give overview) • Explain the different forms of subsidies for tenants, (certain) landlords and, if relevant, housing associations or similar entities acting as intermediaries (e.g. direct, by means of investment loans, tax privileges). Which level of government is competent to assign the subsidies? Is there a right to certain subsidies or does the public administration have discretion in whom to assign the subsidy? • Have certain subsidies been challenged on legal grounds (in particular: on the basis of competition law or budget law)? As mentioned previously, the foremost objective of the Turkish housing policy has constantly been increasing the ownership. In the past, housing allowances for certain civil servants were granted. Other than that, in order to encourage home ownership, subsidies are granted in the form of loans for those who buy a residential unit. On the other hand, subsidization schemes specifically designed generally for landlords or tenants do not exist in Turkey. In the event of natural disasters (typically earthquakes), local municipalities or governorates provide for temporary rent allowances. Some forms of specific subject-­based subsidization are described below. Subsidies granted within the process of urban renewal have gained significance in the last decade. 45 KEY (Konut Edindirme Yardımı, Housing Support) KEY system was a form of subject-­based subsidisation adopted in 1986 and applied until 1999.127 KEY allowances were transferred to a specific bank account to be paid to those specified in Article 1 of the said Law which mainly comprised civil servants, public officials, certain workers and certain pensioners. The initial amount of the allowances ranged from TLR 3,500 to TLR 16,000 in 1987 and from TLR 17,500 to TLR 80,000 in 1995. When the KEY subsidization was abolished in 1999, it was decided that the beneficiaries would be granted equity shares of the planned REIT which was to be established upon the transformation of the previous financial institution holding the bank account for the allowances. However, it has become dysfunctional over the years and finally in 2008, it was decided that the entire amount collected in the fund should be repaid to the beneficiaries.128 The repayment process is still pending. Lojmans Although linguistically originating from the French logement, the word lojman indicates a certain type of tenure which is officially referred to as public house, again a misleading term. Lojmans denote the dwellings which are allocated for the employees of a certain workplace, typically a public institution, free of charge or against a rental fee which is less than the normal value. Lojmans can be considered as an indirect form of subject-­based subsidy in that their beneficiaries enjoy a complete or a significant amount of rent reduction. The assignment of lojmans to certain employees is prescribed by regulations on the basis of special situations, tasks, services and periods of service129 (see Regulatory types of tenures with a public task in 4.3). Subsidies for victims of fight against terrorism Victims of terrorism and their families have the possibility to apply for rental subsidies. The criteria for eligibility and the conditions related to the dwelling to be rented, such as its size, location and facilities are laid down in the Anti-­Terror Law (1991)130 and a prime ministry mandate adopted in 2006. The subsidies cover the full amount of the rent which should not exceed the market value;; they exclude, however, the utilities and other expenses (such as the condominium maintenance fee) as these are not typically included in the rent in Turkey. There is also a time limit: victims of fight against terrorism have the possibility to receive rental subsidies for a maximum of ten years. As regards the tenancy, there is no different regulation;; the provisions of the Code of Obligations on tenancy are applicable. The tenancy contract is concluded between the landlord, who is typically a private person, and the tenant who is eligible for the subsidies. 127
The system was adopted by the Law No. 3320 dated 11 December 1986 and abolished by the Statutory Decree No. 388 dated 26 November 1999. 128
The Law No. 5664 concerning the payment to the right holders for KEY (2007), O.J. 26537/30 May 2007. 129
Art. 3 Public Dwellings Code No. 2946 (1983), O.J. 18218/11 November 1983 (Kamu Konutları Kanunu). 130
Anti-­Terror Law No. 3713 (1991), O.J. 20843/12 April 1991 (Terörle Mücadele Kanunu) Article 21(b) of the Anti-­Terror Law deals with rental subsidies. 46 In order to receive the rental subsidy, the victim should then obtain a confirmation of the tenancy contract from the relevant state institution. Rental subsidies provided by urban renewal projects The Law on Restructuring of Areas under Risk of Natural Disasters131 introduced rental subsidies for the right owners in relation to the buildings that have been identified to be under risk within implementation of the urban renewal projects.132 Both the owners and the tenants who are residing in the building under risk have the possibility to apply for the rental subsidies. Holders of limited real rights may also apply. Applications are made to the provincial directorates of environment and urbanisation. Upon the approval of the ministry of the environment and urbanisation, the beneficiaries receive a certain amount of allowance. If the beneficiary residing in the building under risk is the owner, he or she is granted allowances for eighteen months and the amount of the allowance is fixed by the ministry. Tenant beneficiaries residing in the buildings under risk may receive the allowances for only two months, paid in a single sum that is calculated on the basis of the monthly rental allowance in the province where the building is located.133 Housing allowance for first-­home buyers In January 2015, the Prime Minister Davutoğlu announced a new housing allowance for first-­home buyers. The relevant legislative decree was amended accordingly in March 2015. In practice, the housing allowances will start to be paid from 2018. The state will pay maximum 20 per cent on top of savings in a bank account opened specifically for the purpose of saving money to buy a dwelling, kept for three years, and then used for buying the dwelling. The amount paid by the state shall not exceed TLR 15,000.134 Summary table 4. Subsidization of landlord Subsidization of landlord Tenure type 1 Tenure type 2, etc. Subsidies for landlord do not exist in Turkish housing system 131
The Law No. 6306 on Restructuring of Areas under Risk of Natural Disasters (2012), O.J. 28309/31 May 2012. (Afet Riski Altındaki Alanların Dönüştürülmesi Hakkında Kanun). Application Regulations of the Law No. 6306 (2012), O.J. 28498/15 December 2012. 132
Art. 5 Law No. 6306, Art 16 Application Regulations of the Law No 6306. 133
Ministry of Environment and Urbanisation (Turkey) ‘Kira Yardımı Uygulamaları Kılavuzu’ (2015).www.csb.gov.tr/db/altyapi/banner/banner749.pdf (retrieved 22 May 2015). 134
Art. 15 Law Amending Certain Laws and Statutory Decrees No. 6637 (2015) O.J. 29319/7 April 2015. 47 Summary table 5. Subsidization of tenant Subsidization of tenant Private rental Lojmans Subsidy before start of contract (e.g. voucher allocated before find a rental dwelling ) Subsidy at start of contract (e.g. subsidy to move) Subsidy during tenancy (in e.g. housing allowances, rent regulation) -­ Subsidies for victims of Employees benefiting from fight against terrorism the lojman system either -­ Urban renewal subsidies receive a lojman-­subsidy or reside in lojmans (free or against a rent that is lower than the market or receive) Summary table 6. Subsidization of owner-­occupier Subsidization of owner-­
occupier Subsidy before start of contract (e.g. savings scheme) Subsidy at start of contract (e.g. grant) Subsidy during tenancy Housing allowance for first-­home buyers (e.g. lower-­than market interest rate for investment loan, subsidized loan guarantee, housing allowances) 48 3.7 Taxation • What taxes apply to the various types of tenure (ranging from ownership to rentals)? In particular: o Tenants: Do tenants also pay taxes on their rental tenancies? If so, which ones? o Homeowners § Income tax of homeowners: is the value of occupying a house considered as a taxable income? § Is the profit derived from the sale of a residential home taxed? The Turkish direct taxation system consists of two main taxes: income tax imposed on individuals for their income and earnings and corporate tax imposed on companies. Although income tax and corporate tax are subject to two separate Codes (1960 Income Tax Law and 2006 Corporation Tax Law135), many rules and provisions of the Income Tax Law also apply to corporations, particularly in terms of income elements and determination of net income.136 Besides the direct taxation system, there are also several indirect taxes such as the VAT (Value Added Tax), stamp tax, real estate tax, motor vehicle tax, banking and insurance transactions tax, inheritance and gift tax. As for the tax liability, the residency criterion is applied in general and nationality criterion is applied within a limited scope.137 Taxable income includes, among others, the income from immovable property and rights.138 This income tax, levied on the rental income, is one of the main direct taxes imposed on landlords. In addition to that, the direct and indirect taxes described below concern tenants and landlords. 135
Income Tax Law No. 193 (1960), O.J. 10700/6 January 1961 (Gelir Vergisi Kanunu), Corporation Tax Law No. 5520 (2006), O.J. 26205/21 June 2006 (Kurumlar Vergisi Kanunu). 136
Revenue Administration, ‘Turkish Taxation System’ http://www.gib.gov.tr/en/references-­and-­
resources/turkish-­taxation-­system (retrieved 18 March 2015). 137
Ibid. “In general residency criterion is employed in determining tax liability for individuals. This criterion requires that an individual who has his place of residence in Turkey is liable to pay tax for his worldwide income (unlimited liability). Any person who remains in Turkey more than six months in a calendar year is assumed as a resident of Turkey. However, foreigners who stay in Turkey for six months or more for a specific job or business or particular purposes which are specified in the ITL are not treated as resident and therefore, unlimited tax liability does not apply to them. In addition to residency criterion, within a limited scope, nationality criterion also applies regardless of their residency status, Turkish citizens who live abroad and work for government or a governmental institution or a company whose headquarter is in Turkey, are considered as unlimited liable taxpayers. Accordingly, they are subject to the income tax on their worldwide income. Non-­residents are only liable to pay tax on their income derived from the sources in Turkey (limited liability).” 138
Art. 2 Income Tax Law. 49 Taxes concerning tenants Except for the stamp duties arising from the tenancy contracts concluded in written form, there are no taxes imposed on the tenants directly arising from the tenancy. On the other hand, the environmental sanitation tax (çevre temizlik vergisi), also colloquially known as ‘garbage tax’ (çöp vergisi), levied by the municipalities for environmental services (such as garbage collection) they provide, is paid by the inhabitants of the buildings getting those services regardless of their tenure type. Therefore, tenants have to pay the sanitation tax (in two yearly instalments in March and November) which is, in case of residential dwellings, added to the water bills. The Income Tax Law sets forth a tax withholding system in taxation of the income from immovable property from commercial tenancies. It requires that the tenant should pay a certain amount (that is prescribed by law) of the rent to the tax authority on behalf of the landlord. This system applies only to commercial tenancies and thus is not further discussed in the present report. Taxes concerning landlords and homeowners Taxes imposed on landlords include those levied on real estate ownership and those levied on the rental income. Real estate tax (emlak vergisi) is levied by the municipalities on the value of land and buildings at a rate varying according to the use of the land. It is imposed upon the owner of a building, upon the holders of usufructuary rights in case of the existence of such rights on the building, and if neither owner nor any usufructuary right holder exist, upon those who dispose the building as if they are its owners.139 In most cases landlords are also the owners of the dwellings they rent and thus have to pay the real estate tax. The amount of the real estate tax is determined every year taking into account changes in the value of the land and building. It is paid on a yearly basis in two equal instalments in spring (March–May) and in November. In 2014, the real estate tax rate was announced, for residential premises, as 2 per mille (0.2%) in metropolitan municipalities and 1 per mille (0.1%) in other districts. Rental income tax (kira geliri vergisi) is levied on the rental income that exceeds a certain amount set annually. The Income Tax Law provides for a list of types of income from immovable property which covers rental income.140 The rental income tax rates vary according to several facts depending on whether the dwelling is rented for residential or commercial use and whether the tenant is a real person or a legal entity. Landlords must submit a declaration to the Ministry of Finance if the total annual rent is above the tax exemption announced each year.141 For instance, residential real estate owners who have earned more than TLR 3,300 rental income have to declare their 139
Art. 3 Real Estate Tax Law No. 1319 (1970), O.J 13576/11 August 1970 (Emlak Vergisi Kanunu). Art. 70 Income Tax Law 141
This limit was fixed as TLR 2800 for the rental income earned in 2011, TLR 3000 for 2012, TLR 3200 for 2013 and TLR 3300 for 2014. 140
50 incomes in 2015 and pay the corresponding taxes. On the other hand, in cases where the landlords have other commercial, agricultural or occupational income, even if the amount of the annual rental income is below the announced limit (e.g. TLR 3300 for 2014), it should be declared along with the annual income.142 In cases where the dwelling is rented against a rent which is lower than the amount of equivalent rent or somebody is/are allowed to live in the dwelling free of rent, the equivalent rent of the dwelling is taken into consideration in calculating the taxable rental income. The equivalent rental value of a dwelling is fixed by competent authorities or courts. If there is no such appreciation or assessment for a specific dwelling, the equivalent rental value is calculated as 5 per cent of the amount of the real estate tax.143 Equivalent rental value does not apply in certain cases set forth in the Income Tax Law.144 Among these cases are, for instance, letting the use of the dwelling by others for the purpose of its protection as well as allocating the dwelling to one’s children, parents or siblings. The equivalent rental value is also calculated and applied in cases where it is not possible to determine the rent or it is prearranged to declare the rent lower than its real amount;; in the latter case the equivalent rental value is considered as a tax security system.145 Transfer tax (intikal vergisi) and stamp duty (damga pulu vergisi), which are levied in on the sale of a property and on the sale contract are also relevant for those who purchase a property whether to rent out or to reside in. The amount of the transfer tax on the sale of a property is 4 per cent of its declared purchase price, 2 per cent to be paid for each party, ie, the buyer and the seller.146 Inheritance and gift tax (veraset ve intikal vergisi) is levied on persons who receive property situated in Turkey or belonging to a Turkish national. Items acquired as gifts or through inheritance are subject to a progressive tax rate ranging from respectively 10 per cent to 30 per cent and from 1 per cent to 10 per cent of the item’s appraised value. Tax paid in a foreign country on inherited property is deducted from the taxable value of the asset. Inheritance and Gift Tax is payable in biannual instalments over a period of three years.147 Finally, it could be repeated that the sanitation tax described above as a sort of tax concerning tenants is imposed on the inhabitants of the buildings which means that it involves those residing in a dwelling be they tenants or home owners. • Is there any subsidization via the tax system? If so, how is it organized? (for instance, tenants being able to deduct rent from taxable income;; landlords being able to deduct special costs;; homeowners being treated favourably via the tax system 142
Revenue Administration, https://intvd.gib.gov.tr/kirabeyan/index.html (retrieved 18 March 2015). Art. 73 Income Tax Law. 144
Art. 73 Income Tax Law 145
Revenue Administration, http://www.gib.gov.tr/index.php?id=644 (retrieved 18 March 2015). 146
The tax rate for the transfer of property was increased from 1.65 per cent to 2 per cent in September 2012 (Council Ministers Decision No. 2012/3735 (2012), O.J. 28419/22 September 2012. This increase leads to around 4 per cent overall title deed charge. 147
Revenue Administration, ‘Turkish Taxation System’ http://www.gib.gov.tr/en/references-­and-­
resources/turkish-­taxation-­system (retrieved 18 March 2015). 143
51 There are some subject-­based exemptions from the real estate tax in accordance with the Real Estate Tax Law and the decree of council of ministers. The list of persons and institutions that, upon their declaration, do not have to pay the real estate tax under certain conditions includes, among others, pensioners, persons without any income, disabled persons, and orphans and widows of martyrs and veterans. The real estate tax rate for these taxpayers is fixed as 0 per cent by the council of ministers and thus these persons are exempt from the real estate tax until the rate is changed by the council of ministers. The tax exemption does not apply if these persons have more than one dwelling in Turkey or the size of their single dwelling is larger than 200 square meters. Rental income tax exemptions, discussed above, are applied in cases where the annual rental income is below a certain amount announced each year. Apart from that, the deduction of certain expenses is possible in the calculation of the net income from an immovable property: costs related to maintenance, management, renovation and running, and depreciation may be deducted from the gross income on the actual basis. It is also allowed to make a lump sum deduction instead of actual costs at a rate of 25 per cent of the rental income.148 Taxpayers may choose between the actual deduction method and the lump sum method. If they choose to apply the lump sum method, allowing them to deduct 25 per cent of the income as the lump sum expense, they can not opt for actual expenses method for the next two years.149 A tax reform, expected to be effective in late 2015 will extend the scope of tax deductions from rental income. • In what way do tax subsidies influence the rental markets? Taxes imposed on homeowners and landlords are not very high in Turkey. The amount of the real estate tax is lower than many other countries and there are also several exemptions to that. Furthermore, rental income tax is not paid if the amount of the total annual rent is below a certain level;; and, if it is required, deduction is possible for the expenses made to maintain the property and preserve its financial value. All these tax arrangements make it attractive both to acquire property and to rent it out. Tax burdens do not cause any setback for landlords who want to enter in the rental markets. • Is tax evasion a problem? If yes, does it affect the rental markets in any way? Tax evasion is generally a problem in Turkey. The share of unrecorded activity in Turkey’s overall economy (estimated to be around 30–40 per cent) is high compared to other OECD countries as a result of several demographic and developmental factors, policy factors and cultural factors.150 In economies with high unrecorded elements, tax evasion is less likely to be considered unacceptable by most of the population.151 This might be one of the reasons in relatively low tax morale in Turkey which has its reflections in the rental 148
Revenue Administration, ‘Turkish Taxation System’ http://www.gib.gov.tr/en/references-­and-­
resources/turkish-­taxation-­system (retrieved 18 March 2015). 149
Diyadin, Yakut ‘Foreign landlords in Turkey need to file taxes by March 25’. Hürriyet Daily News, 20 March 2015. http://www.hurriyetdailynews.com/foreign-­landlords-­in-­turkey-­need-­to-­file-­taxes-­by-­march-­
25.aspx?pageID=238&nID=79896&NewsCatID=344 (retrieved 18 March 2015). 150
Oxford Business Group, ‘The Report: Turkey 2012’ www.oxfordbusinessgroup.com/country/Turkey (retrieved 18 March 2015). 151
Ibid. 52 markets although this is, in author’s opinion, only a small part of the general tax evasion problem. Nevertheless, it is not uncommon that landlords avoid declaring their dwellings that are rented out or the actual amount of the rental income in order to make use of the tax exemptions in the latter case. It has been reported that some landlords owned more than 150 apartments and had not paid any tax thus far, and many landlords make a deal with their tenants to receive only a certain amount of the rent on their bank account and get the remaining amount in cash in order to pay less tax by reporting the rent lower than its actual amount.152 In order to prevent such tricks, on the other hand, new control mechanisms were developed resulting in a significant increase, in recent years, in the number of landlords who declare their rental income properly. Among those mechanisms, a rather effective – but also unpleasant – system rewarded tenants who inform on their landlord’s tax evasion with a payment of 10 per cent of the fine imposed on the landlord;; it is guaranteed that the informer-­tenant’s identity is kept confidential.153 Besides this system, letters sent to taxpayers and inspections carried out street by street have contributed to the increase in the number of registered landlord-­taxpayers, which exceeds 550 thousand.154 Summary table 7. Taxation Home-­owner Landlord Taxation at point of Inheritance and gift tax acquisition Transfer tax Tenant Stamp duty
Stamp duty Taxation during tenure Real estate tax Rental income Environmental sanitation tax tax Environmental sanitation tax Taxation at the end of Transfer tax occupancy Stamp duty 152
‘Uyanık Kiracılar İş Başında’. NTV 29 March 2010 http://www.ntv.com.tr/arsiv/id/25075410/#storyContinued (retrieved 19 March 2015). 153
Ibid. 154
‘Ev Sahibini İhbar Et Ödülü Kap’. Milliyet 29 January 2011 http://www.milliyet.com.tr/ev-­sahibini-­ihbar-­et-­
odulu-­kap/ekonomi/ekonomidetay/29.01.2011/1345709/default.htm (retrieved 19 March 2015). 53 4. Regulatory types of rental and intermediate tenures155 4.1 Classifications of different types of regulatory tenures • Which different regulatory types of tenure (different regulation about contracts and tenant security) do you classify within the rental sector? What are their shares in dwelling stock (compare summary table 1)? As municipal rental housing and limited-­profit housing do not exist, private renting is the only regulatory type of rental tenure and all tenancy contracts on residential premises are subject to the provisions of the Code of Obligations. The only exception to the private renting is the lojman system which is subject to a specific law, i.e. Public Dwellings Code.156 The 2011 Population and Housing Census by Turkstat showed that 23.8 per cent of the tenures were private renting, whereas only 1.5 per cent of the tenures were lojmans. According to the census, 299,000 households resided in lojmans compared to 4,637,000 households residing in dwellings as tenants. While most of the lojmans are owned by public institutions, some belong to private institutions in order to be rented to their employees. In 2012, it was stated that the number of lojmans owned by public institutions in Turkey reached 236,811. The Turkish National Police has the highest number of lojmans as 46,200 units, followed by the Ministry of Education (43,785 lojmans) and the Ministry of National Defence (41,995 lojmans).157 4.2 Regulatory types of tenures without a public task • Please describe the regulatory types in the rental sector in your country that do not have a public task. This category may be called private or market rental housing.158 o Different types of private regulatory rental types and equivalents: § Rental contracts • Are there different intertemporal schemes of rent regulations? The regulations in the Code of Obligations on rental contracts apply to the entire market rental housing. The current Turkish Code of Obligations No. 6098 (TCO) has been adopted on 11.01.2011 and entered into force on 01.07.2012.159 The Law on the Enforcement and Implementation of the Law of Obligations No. 6101 (Enforcement and 155
I.e. all types of tenure apart from full and unconditional ownership. Public Dwellings Code No. 2946 (1983), O.J. 18218/11 November 1983 (Kamu Konutları Kanunu). 157
‘Kamu Lojmanları 70 İldeki Konut Sayısını Geride Bıraktı!’. Emlak Kulisi 31 December 2011 http://emlakkulisi.com/kamu-­lojmanlari-­70-­ildeki-­konut-­sayisini-­geride-­birakti/98130 (retrieved 4 February 2014). 158
Market rental housing means housing for which the rent price determines the conclusion of contracts and not some social rules of allocation based on need. 159
Turkish Code of Obligations No. 6098 (2011), O.J. 27836/4 February 2011 (Türk Borçlar Kanunu). 156
54 Implementation Law) has been adopted on 12.01.2011 and also entered into force on 01.07.2012.160 The new TCO mentioned just above has repealed the previous Code of Obligations No. 818 dated 22.04.1926161 and the Enforcement and Implementation Law has repealed the GKHK No. 6570 dated 18.05.1955.162 While the two previous codes are not effective any longer, certain provisions of the both codes are still applicable to previous legal transactions including tenancy contracts. According to the provisions of the Enforcement and Implementation Law regarding the acts and transactions concluded before the entry into force of the TCO, the laws in force at the time of the conclusion of the legal act or transaction apply to those acts and transactions. However, the provisions of the (new) TCO on default, termination and eviction apply even to the tenancy contracts that had been concluded before the entry into force of the new TCO. Accordingly, tenancy contracts concluded before 01.07.2012 are partly subject to the previous Code of Obligations and the repealed GKHK and partly subject to the new TCO. For example, whether a tenancy agreement concluded in 2010 is legally binding would be determined according to the previous Code of Obligations No. 818 whereas any disputes on its termination would be solved within the sphere of the new Code of Obligations No. 6098 (TCO).163 • Are there regulatory differences professional/commercial and private landlords? between o Briefly: How is the financing of private and professional/commercial landlords typically arranged (e.g. own equity, mortgage based loan, personal loan, mix, other) There are no regulatory differences between professional/commercial and private landlords. There are no state arrangements specifically for the financing of any kind of landlords either. • Apartments made available by employer at special conditions There is no specific regulation for the apartments made available by private employers;; provisions of the TCO on tenancy contracts are applicable leaving the special conditions to be determined by the parties. On the other hand, public employees might benefit from the lojman system explained below. In case of lojmans, a lojman protocol is signed instead of concluding a tenancy contract. The protocol is subject to the provisions of the Public Dwellings Code. 160
The Law on the Enforcement and Implementation of the Law of Obligations No. 6101 (2011), O.J. 27836/4 February 2011. 161
Art. 647 TCO 162
Art. 16 Enforcement and Implementation Law 163
The provisions of the TCO that apply to the tenancy contracts concluded before the entry into force of the TCO, ie. 1.7.2012, are Arts. 304/I, 305/II, 306/II, 315, 316/II-­III, 322, 324-­325;; 327–336;; 347-­348, 349, 350–356. Gümüş p. 9. 55 • Mix of private and commercial renting (e.g. the flat above the shop) Mix of private and commercial renting is possible as long as the intended use is agreed upon by the parties. The TCO system provides a separate section for the residential and roofed commercial tenancies. Therefore, in most cases, the same rules apply to both residential and commercial renting. § Cooperatives There are no specific regulatory schemes regarding the rental sector for cooperatives. However, their rental income is subject to a different taxation regime from the rental income of private landlords. Corporate income tax is imputed on their incomes from their dwellings that are rented out. § Company law schemes Company law schemes do not exist in Turkey. § Real rights of habitation The real right of habitation is specified as a real right in the Turkish Civil Code (TCC) granting its holder the right to live in all or in part of a building .164 It is subject to the provisions on usufruct unless otherwise is stipulated by law;; tenancy law regulations are not applicable to the real right of habitation. § Any other relevant type of tenure See Intermediate tenures in 1.4 (Types of housing tenures). 4.3 Regulatory types of tenures with a public task • Please describe the regulatory types of rental and intermediary tenures with public task (typically non-­profit or social housing allocated to need) such as o Municipal tenancies o Housing association tenancies o Social tenancies o Public renting through agencies o Privatised or restituted housing with social restrictions o Public entities (e.g. municipalities) taking over private contracts, typically for poor tenants to counteract homelessness o Etc. 164
Art. 823 Turkish Civil Code No. 4721 (2001), O.J. 24607/8 December 2001 (TCC, Medeni Kanun) 56 Regulatory types of rental and intermediary tenures with a public task do not exist in Turkey. There are no non-­profit or social housing schemes such as municipal tenancies or any of other types listed above. On the other hand, there is an idiosyncratic tenure type called ‘public dwellings’ or ‘lojmans’, which are state-­owned dwellings allocated to public servants and other public employees. These dwellings are officially called ‘kamu konutlari’, which literally means ‘public dwellings’, but in practice and sometimes also in official documents they are referred to as lojmans. While the word lojman, when used alone, might imply both private dwellings (i.e., owned by private entities for their employees) and public dwellings (i.e., owned by public entities), in practice, it denotes, mostly, the public ones. In the following pages, this common use is followed: in this report, lojman implies, dwellings owned by the state and public institutions and allocated to public employees free of rent or at a very low rent. The lojman system differs substantially from the above-­listed tenure types. It is, nevertheless, closer to the regulatory type of tenure with a public task than the private renting. Therefore, it is explained below from a different methodical perspective. • Specify for tenures with a public task: o selection procedure and criteria of eligibility for tenants o typical contractual arrangements, and regulatory interventions into, rental contracts o opportunities of subsidization (if clarification is needed based on the text before) o from the perspective of prospective tenants: how do I proceed in order to get “housing with a public task”? Lojmans are defined as dwellings purchased, rented or built by public institutions to be allocated to public servants and other public employees in order to solve possible housing problems that might occur during their duty assignments and thus to motivate them in this respect.165 The allocation, rental aspects, maintenance, renovation and administration of lojmans and the period of residence (demeure) in a lojman are prescribed by law. The allocation of and the amount of rent to be paid for the public dwellings are determined by a commission coordinated by the ministry of finance at least three months prior to the beginning of each year and published in the official journal by a decree of council of ministers. Types of lojmans The Code of Public Dwellings divides lojmans into four groups described below.166 -­ Dwellings allocated based on specific authority and ranks are reserved for officers having representative power. Whereas some officials (the president, prime minister, ambassador, representatives of the military councils, etc.) residing in these special dwellings do not pay any rent, some of them (ministers, undersecretaries, governors, force commanders, etc.) 165
Aydemir, S. R. ‘Türk Kamu Yönetiminde Kamu Konutları (lojman) nın Satışı Sorununa İlişkin Bir Değerlendirme’. Mevzuat Dergisi 64 (2003). 166
Art. 3 Public Dwellings Code. 57 may reside in the dwellings by paying the rent. For both groups of employees, who reside in these dwellings during their duty terms, expenses for heating, fixed assets and the basic needs such as the electricity, gas and telephone are paid by the relevant institutions. -­ Dwellings allocated based on the occupation are those allocated to certain public officials who have a central role with authority and responsibility. Members of high courts, highest ranking employees from several public institutions affiliated with the prime ministry, ministries, state universities, etc. may reside in this kind of lojmans during their duty terms. -­ Dwellings allocated based on priority scoring system / waiting list are public dwellings that are made available for the public servants according to their scores obtained due to several factors such as the service period, the duration of previous habitation in public dwellings, the number of children and other dependent relatives, the state of income, the period of waiting for the public dwellings, and whether the spouse is also a public employee within the scope of the Public Dwellings Code. The public servants with higher scores usually have the right to these dwellings. In cases where the scores are equal, the longer service period is taken into consideration. If that is also equal, the authorised commission decides by drawing lots. The maximum period of residing in dwellings allocated based on priority scoring system is fixed as five years except for the staff of the armed forces. In the absence of other public servants in the waiting list upon the expiration of five years, the public servant is allowed to stay longer in the dwelling. -­ Dwellings allocated based on service are buildings constructed for the staff, bodyguard, official driver and janitors who are on duty out of working hours in places far from residential areas with limited transportation facilities. These dwellings are usually huts, prefabs, construction site extensions, caravans and cottages built for certain facilities such as communications, stations, border posts, observation and investigation, and construction places causing social and economic difficulties due to their locations. Employees just mentioned reside in these dwellings during their duty term. The persons who are allowed to reside in any of the above public dwellings together with the public employee to whom the dwelling is allocated are limited to the spouses and certain family members that the public employee is legally obligated to support. The lojman protocol Public employees who move to a lojman are required to sign a lojman protocol, also known as lojman tenancy agreement. It is also signed by the public administrator and it includes the following information: the name, surname and the duty of the employee, the date of the allocation of the dwelling, the number of the allocation decision, the date of the handing over of the dwelling and the moving in of the employee, the address of the dwelling, the value of 1 square meter of the dwelling, information on the monthly rent, declaration of handover of the dwelling, declaration on the use of the dwelling in accordance with the Regulation on Public Dwellings and with due care, declaration for the compensation to be paid in case of loss of any items in the inventory and in case of any damage to the dwelling. Unlike the tenancy contracts, lojman protocols are subject to the provisions of the Law on Public Dwellings and the Regulation on Public Dwellings. 58 The sale of lojmans The idea of public dwellings goes back to the announcement of Ankara as the new capital of the Turkish Republic. Initial plans of establishing a system of ‘public servant houses’ have later transformed into the policy of ‘providing a lojman for each public servant’ in order to make Ankara an attractive place for public employees and bureaucrats. This policy later created an ‘empire of lojmans’ with around 230,000 lojmans by 2003167 and more than 236,000 by 2013.168 On the other hand, many difficulties in the lojman system were caused by attempts to maintain a fair system for all public employees. Public employees who were not able to benefit from lojmans were paid compensation, but a very small amount. Despite the above-­said five-­years-­rule for the dwellings allocated on a priority scoring system, in the absence of an efficient enforcement mechanism, public employees refused to leave lojmans once they were residing in even if they owned another dwelling. Discussions on the sale of lojmans, along with the economic downsizing arguments, to provide new economic sources for the state started in 1990s resulting with a new law authorizing the council of ministers to determine the rules and methods for selling off the public property which are not required for the public services, and these public properties included lojmans.169 The law caused several discussions and some of its provisions were annulled by the Constitutional Court.170 After more than a decade, the lojmans came to the forefront once more. In 2003, the process of the sale of lojmans was initiated from those reserved for the member of parliaments. However, in ten years only 108 of them were sold. In 2012, the Prime Minister Erdoğan instructed to conclude the process of the sale of lojmans within six months;; however, this was not possible due to bureaucratic and administrative difficulties. The process of the sale of lojmans is currently under progress. 167
Aydemir. Kayaoğlu, Y. ‘Saraçoğlu Evleri'nde Kamu Lojmanları Satışı Bürokratik Engellere Takıldı!’ Emlak Kulisi 15 October 2013 http://emlakkulisi.com/saracoglu-­evlerinde-­kamu-­lojmanlari-­satisi-­burokratik-­engellere-­
takildi/200741 (retrieved 4 February 2014). 169
In 1994, the draft bill for the sale of lojmans was vetoed by the president by reasoning that the absence of lojman policy might cause economic problems for public employees especially in cities where rents are high. Furthermore, the public dwellings were considered as vested rights after seventy years of practice and also a requirement of the social state principle. Several years later, a new legislative proposal was prepared authorizing the council of ministers to determine the rules and methods for selling off the public property which are not required for the public services including the property used as lojmans. The Law No. 4182 on the Sale of the Immovable Property of Public Institutions entered into force in 1996. Some of its provisions were, however, annulled by the Constitutional Court. 170
The Decision of the Constitutional Court No. 1996/47, O.J. 23322/24 April 1998. 168
59 Summary table 8. Regulatory types of tenure Rental housing without a public task Main characteristics (market rental housing for which the • Types of landlords ability to pay determines whether the • Public task tenant will rent the dwelling);; for example different intertemporal schemes of • Estimated size of market share different landlord types with different within rental market tenancy rights and duties • Etc. Private tenancy -­ All types of landlords but mainly private persons -­ 67 per cent of the housing stock -­ Freedom of contract is essential but protection of tenant is gaining weight Rental housing for which a public task has been defined (Housing for which government has defined a task;; often non-­profit or social housing that is allocated according to need, but not always) Lojman system -­ Dwellings are owned by mostly public and sometimes private institutions -­1.5 per cent of the housing stock -­ Allocation of the dwellings to the employees depending on various criteria -­ Abolition of the system and the sale of public lojmans are currently under progress • For which of these types will you answer the questions in Chapter 5 and 6;; which regulatory types are important in your country? Private rental housing is the sole rental scheme that applies to residential dwellings and the roofed commercial dwellings. The public lojman system which constitutes a very small share in the housing tenures is ceased. Almost all dwellings are subject to the tenancy law regulated mainly in the Code of Obligations. The following sections describe the private rental housing and the relevant provisions of the Code of Obligations. 60 5. Origins and development of tenancy law • What are the origins of national tenancy law and where was and is it laid down (civil code, special statute, case law)? Turkish tenancy law is mainly laid down within the Turkish Code of Obligations which is an adopted version of the French text of the Swiss Federal Code of Obligations and Civil Code. During the Ottoman period, Islamic principles were applied until 1870s. In 1876 the Medjelle (the Ottoman Civil Code) was enacted representing the first codification during the Ottoman legislature. After the establishment of the Turkish Republic in 1923, the Medjelle was repealed and western laws were taken as models for the west-­oriented new state. In 1926, the Turkish Code of Obligations entered into force forming the cornerstone of the Turkish private law together with the Turkish Civil Code. The Turkish Civil Code includes four main parts (law of persons, family law, law of succession and law of property) and a preliminary chapter (application of the Code, good faith principle, general principles of evidence). The Code of Obligations forms the fifth part of the civil law, but is adopted, for the sake of convenience, as a separate code having its own chapters and sections. The Code of Obligations, as adopted in 1926 (Türk Borçlar Kanunu) laid down the rules and principles relating to tenancy in two sections under the eighth chapter, ‘lease’. The first section (Arts. 248–249) dealt with ordinary lease and the second section (Arts. 270–
298) dealt with usufructuary lease. In addition, a specific rental law, the Law No. 6570 Concerning the Lease of Real Estate (Gayrımenkul Kiraları Hakknda Kanun, GKHK) was in force from 1955 until 2012. Under the current system, effective since 01.07.2012, tenancy law forms the fourth section of the Turkish Code of Obligations (TCO)171 (lease contracts, Arts. 299–378) composed of three subsections. The first subsection lays down the general provisions that apply to movable and immovable, ordinary lease and usufructuary lease (Arts. 299–338). The second subsection specifies the tenancy for residential premises and roofed commercial premises which was previously covered by the Law Concerning the Lease of Real Estate (Arts 339–356). The third sub-­section deals with usufructuary lease (357–378). • Who was the political driving force? Was it based on a particular legal philosophy (e.g. socialism)? Is there a particular philosophy behind the rules (e.g. protection of the tenant’s home as in Scandinavia vs. just a place to live as in most other countries) Turkey’s Westernisation and Europeanisation attempts began towards the end of the ninetieth century and intensified after the establishment of the modern Republic of Turkey in October 1923. Atatürk, the founder and the first president of the new state attached great importance to the modernisation of the state at many levels including the legal system. Therefore, Turkey has abandoned the previous Ottoman laws which had their roots in Islamic law and followed the continental European law system with the reception of codes from different European states. For instance, whereas the Criminal Code was adopted from Italy, the Commercial Code based on the German model and the administrative law on the French model. 171
Turkish Code of Obligations No. 6098 (2011), O.J. 27836/4 February 2011. 61 Tenancy law, under these conditions, was not adopted specifically as a result of a certain philosophy or the own needs of the society. Due to the determination of the founder and his colleagues to set modern standards for the newly established state, it was rather the outcome of an overall reform process and the reception of an entire civil code from Switzerland, a highly respected western state. Various reasons are stated as to why the Swiss model was chosen. It was expressed in the legislative intention that the Swiss Code des Obligations was one of the uppermost legal works of the contemporary civilisation and its reception would be appropriate for meeting the requirements of the new Turkish Republic.172 The language of the Swiss Code was suitable for translation and the general system of the Code avoided juridical conceptualism, unlike the German Civil Code. Some also argue that the reason behind the preference of the Swiss model to other European examples lies on the backgrounds of the prominent political leaders of the time rather than the suitability of the Code. Some, on the other hand, make a link with the main features of the Code favouring democratic equality by freedom of contract, freedom of testation, equal rights in intestacy and gender equality.173 It should be noted that, despite the overall reception of the Swiss Law of Obligations, discrepancies with the Swiss system exists in the Turkish tenancy law since its adoption. • What were the principal reforms and their guiding ideas up to the present date? The previous Code of Obligations (Law No. 818) based on the principle of freedom of contract which applied to tenancy contracts. Besides common features of the contract law such as the freedom to enter into a contract or to choose the other party, the principle could be expanded to setting the rent price and the renewal of the tenancy contract. According to that, the tenancy law did not provide any restrictions to the amount of the rents and the tenancy contracts terminated automatically in the absence of explicit or implicit declaration of intent. The previous Law No. 818 principally approached the landlords and tenants equally. In other words, it did not tend to protect the rights of the tenants considering them as the weaker party.174 Further, the Law No. 818 (basing mainly on the principles of freedom of contract and equality of the parties) did not make a distinction between a residential dwelling and a dwelling used for business purposes. Therefore, various other codes and judicial precedents were effective especially in cases concerning the rents until 1955 when the above-­mentioned specific law on the lease of real estate, GKHK, took effect. The GKHK pursued a more protective approach towards tenants as the weaker party in the contractual relationship.175 It mainly dealt with the two issues mentioned above: rents and termination of the tenancy contracts. However, the provisions of the Law specifying restrictions on the rent increases176 were cancelled by the Constitutional Court in 1963.177 Afterwards, the High Court of Appeals played a major role in setting the rules for rent increases. Regarding the termination of tenancy contracts, the GKHK included provisions 172
Acar, F. Kira Hukuku Şerhi (TBK m.299–312). Istanbul: Beta, 2013, 1. Adal, E. Fundamentals of Turkish Private Law Revised Tenth Edition. Istanbul: Legal, 2012, 56–57. 174
Acar, 2. 175
Acar, 3–6. 176
Arts. 2, 3 GKHK. 177
Anayasa Mahkemesi E. 1963/3E K. 1963/67 T. 26.3.1963. 173
62 in favour of the tenant as opposed to the equal approach of the Law No. 818.178 For a long time, the two laws, namely the Law No. 818 and GKHK were in force together forming a system that allowed an absolute contractual freedom in the formation of tenancy contracts but imposed certain restrictions to their termination.179 In 2011, the new Turkish Code of Obligations No. 6098, TCO, was adopted to replace the previous Law No. 818. The TCO entered into force in 01.07.2012 marking a milestone in the Turkish private law. It repealed the previous Law No. 818 and its accompanying enforcement law,180 and the GKHK.181 Further, it changed the structure of the section on the lease contracts as described in the previous section. Although the previous Code of Obligations, ie, Law No. 818, was adopted from the Swiss Civil Code, it excluded a considerable part of the tenancy regulation from its scope. The adoption of the GKHK later in order to ‘fix’ this legal deficit created a hybrid system which was not found appropriate by the Turkish legislator any longer. According to the legislator, advanced legal systems such as those of France, Germany and Switzerland should be taken as a model and those systems do not provide for special laws for certain types of lease contracts, but instead lay down all the relevant provisions within the scope of their Civil Code.182 Another important driving force in the adoption of the provisions relating to tenancy was the increasing point of view that the tenancy regulation should protect tenants and this should be reflected in the provisions of the TCO. Recent changes in the Swiss Code and the Supreme Court precedents have also been taken into consideration in the preparation of the new law which would, according to the legislator, meet the needs of the society. • Human Rights o To what extent and in which fields was tenancy law since its origins influenced by fundamental rights enshrined in § the national constitution § international instruments, in particular the ECHR o Is there a constitutional (or similar) right to housing (droit au logement)? The principle of freedom of contract as the core principle of the Turkish tenancy law is guaranteed under Chapter III of the Constitution (Art. 48–Freedom of work and contract) as a form of social and economic right. Fundamental rights and freedoms enshrined under Chapter II of the Constitution such as the right to life (Art 17–Personal inviolability, corporeal and spiritual existence of the individual), the right to demand respect for private and family life (Art. 20–Privacy of private life), inviolability of the domicile (Art. 21), freedom of residence and movement (Art. 23), right to property (Art. 35) might be considered as 178
For instance, according to Article 7, termination of the contract would be subject to certain reasons and eviction action. 179
Acar, 6. 180
Art. 647 TCO. 181
Art. 16 TCO. 182
Gümüş, A. “Yeni” 6098 Sayılı Türk Borçlar Kanunu’na Göre Kira Sözleşmesi (TBK m.299–356) Revised Second Edition. Istanbul: Vedat Kitapçılık, 2012, 3. 63 relevant provisions to tenancy law. Furthermore, provisions on the protection of the rights such as the freedom to claim rights (Art. 36), the principle of natural judge (Art. 37) and the right to prove an allegation (Art. 39) are also applicable to tenancy law as well as other fields of law. The protection of the tenant as the weaker party in the contractual relationship might also be linked with the equality principle and the principle of social state governed by the rule of law. Providing that the weaker party in economic and socio-­cultural terms is not prejudiced on the basis of his or her weakness during the proceedings is a result of the fact that both constitutional principles apply in legal judgments.183 In this regard, these principles influence most legislative acts including the provisions of the TCO on tenancy agreements. Although the direct effect of the Constitution to private law is denied both by the legal doctrine and the jurisprudence, its indirect effect is usually accepted.184 Therefore, courts have to consider fundamental rights and freedoms in their judgments including, inter alia, tenancy disputes. Apart from the above rights, The Turkish Constitution includes a specific right to housing, as described above. (See Historical evolution of the national housing situation and housing policy in 1.2.) 6. Tenancy regulation and its context 6.1 General introduction • As an introduction to your system, give a very short overview over core principles and rules governing the field (e.g. basic requirements for conclusion, conditions for termination of contracts by the landlord, for rent increase etc.;; social orientation of tenancy law in force;; habitability [i.e. the dwellings legally capable of being leased]). The TCO sets out general provisions for all types of leases which apply both to movable and immovable property. According to the general definition, a lease contract is a contract whereby the lessor undertakes to grant the lessee the use of a thing or the use and relevant usufruct right of a thing and in exchange the lessee undertakes the payment of a certain rent.185 Residential and roofed commercial premises form the second subsection (Arts. 339–356 TCO) of the fourth section of the TCO governing the lease contracts. The TCO, however, does not define either residential or commercial lease. The provisions governing the lease of residential and roofed commercial premises apply also to the objects on those premises which are for the use of the tenant. On the other hand, these provisions are not applicable in cases where premises that can be, by their nature, allocated for temporary use are rented for a period of six months or less.186 While, holiday 183
Sungurtekin-­Özkan, M. S. ‘Anayasanın Sosyal Hukuk Devleti İlkesi ve Medeni Yargılama Hukuku’. Dokuz Eylül Üniversitesi Hukuk Fakültesi Dergisi 11, No. 2009 (2010): 553–574. 184
Ibid, 554. 185
Art. 299 TCO. 186
Art. 339 TCO. 64 homes definitely fall within the scope of “allocated for temporary use by their nature” there is uncertainty as to what other kinds of dwellings are covered by the phrase. The provisions of the TCO regarding the lease are applicable also to all the lease contracts concluded by the public institutions. Although the TCO does not specifically define residential tenancy contracts, the application of the above provision would mean that the landlord (lessor) undertakes to grant the tenant (lessee) the use of an inhabitable property against the payment of a certain price by the tenant. The intended use of the dwelling as habitation is the main element of a residential tenancy contract distinguishing it from other lease contracts. There are no criteria under TCO as to the inhabitability of a dwelling. It is accepted that a dwelling, in order to be rented, should at least be capable of being used as shelter which protects the tenant from the environmental effects and should satisfy the sleeping need of the tenant.187 Tenancy contracts are not subject to any requirements regarding their form: they can be concluded in writing as well as orally and even tacitly. Nevertheless, the written form is recommended for purposes of proof and might have central importance for protecting tenants in the compulsory sale of dwellings as a result of enforcement proceedings. According to the general provisions of the TCO on the conclusion of contracts, a contract is concluded by the mutual and corresponding declaration of intent by the parties. This declaration of intent might be made explicitly or implicitly.188 The parties are free to specify the duration of the contract. Whereas the previous Law No. 818 did not have clear provisions on the duration, the current TCO provides for two types of tenancy contract in terms of duration, namely open-­ended contracts and time-­limited contracts.189 Time-­limited contracts are prolonged one year subject to the same conditions in the absence of a notice by the tenant at least fifteen days prior to the expiry of the period.190 Open-­ended contracts can be terminated by a notice of termination by the tenant,191 by extraordinary termination and litigation by either party,192 or by mutual termination agreement. In cases where it is not clear whether a tenancy contract is open-­ended or time-­limited, it would be deemed as open-­ended by way of inference.193 • To what extent is current tenancy law state law or infra-­national law (if legislative jurisdiction is divided: what is the allocation of competencies and for which subject matters) Turkish tenancy law, as well as all other laws, is a state law and applies within the entire national territory. The Turkish administrative and legislative system is not divided, thus all laws are applied at the national level. 187
Gümüş, 23–24. Art. 1 TCO. 189
Art. 300 TCO. 190
Art. 347/1. 191
Art. 328 TCO. 192
Art. 330 TCO. 193
Art. 300 TCO (i.e, inferred from the wording of Art. 300 TCO). 188
65 • Is the position of the tenant also considered as a real property right (and therefore also governed by property law) or (only) as a personal (obligatory) right? The position of the tenant is considered as a personal right in the TCO and does not invoke any property right governed by property law. Unlike the property rights that can be exercised against everyone, tenancy contracts establish rights and obligations binding merely the parties of the contract, ie, the landlord and the tenant. • To what extent is the legislation divided up into general private law and special statutes? To what extent are these rules mandatory and dispositive? Does the relationship between general and special rules work properly so as to create legal certainty? Until the new TCO took effect in July 2012, the Turkish tenancy law was governed by the relevant provisions of the previous Law No. 818 on leases along with a special law on the lease of real estate, GKHK. This division of the regulation of tenancy contracts created several problems in practice. Under the new system, the TCO governs all matters relating to tenancy contracts. The fourth chapter of the TCO with the heading ‘lease contracts’ is divided into three sections. General provisions forming the first section (Arts. 298–337) apply to both tenancy (second section, Arts. 339–356) and usufructuary lease (third section, Arts. 357–378). Whereas the regulation of tenancy law in a single statute reduces the conflicts and helps creating legal certainty, the structure of the TCO in itself requiring the applicability of the general provisions to usufructuary lease is criticised.194 • What is the court structure in tenancy law? Is there a special jurisdiction or is the ordinary one competent? What are the possibilities of appeal? The current Turkish judicial system, which was recently changed, has a multipartite structure at the levels of first instance courts, district courts and supreme courts. The system is mainly divided into two as the civilian judiciary and the military judiciary and both of them are split into two categories as ordinary and administrative judiciary. Because of its multipartite structured judicial system, Turkey has several supreme courts as the final decision making authorities in the fields of civilian, administrative and military judiciary195 (see Figure 9. Turkish judiciary). 194
The application of general provisions to both kinds of leases (i.e. tenancy and usufructuary) is the major structural difference between the TCO and the Swiss Civil Code as the latter system deals with the usufructuary lease under a separate title to which the general provisions on lease are not applicable. Article 358 TCO provides that in cases of absence of special rules for usufructuary leases, general provisions on lease contracts apply. The problem raised by this provision is illustrated as follows: usufructuary lease for residential and commercial premises applies to objects made available together with such premises (as envisaged in Art 276 Swiss Civil Code). However, because of Article 358, the provisions of the second section on residential and commercial premises are not applicable to the usufructuary lease affiliated with residential and commercial premises;; only general provisions are applicable. It is suggested that the law should have been formulated allowing the application of the provisions on the residential and commercial premises to the usufructuary lease by analogy. Gümüş, 5. 195
Aksel, İ. ‘Turkish Judicial System: Bodies, Duties and Officials’. Ankara: The Ministry of Justice of Turkey, the Department for Strategy Development, 2013. 66 Figure 9. Turkish Judiciary Source: Ministry of Justice (Turkey) (Aksel, İ. ‘Turkish Judicial System: Bodies, Duties and Officials’) First instance courts of ordinary jurisdiction are divided into two units as criminal law courts and civil law courts. Some of these courts are courts of general jurisdiction and others are specialized courts. While the specialised courts are only to be found in larger cities, some cities also deal with cases of small cities where there are no courthouses. The jurisdiction of the courts is decided by the High Council of Judges and Prosecutors.196 Some courts are established to deal with cases on certain matters which they are specialised in. Currently, these specialised courts are commercial courts, specialised courts for maritime, land registry courts, labor courts, family courts, civil courts for industrial and intellectual property rights, civil courts of enforcement and consumer courts (see Figure 10. First instance courts of ordinary jurisdiction). 196
Ibid, 59–61. 67 Figure 10. First instance courts of ordinary jurisdiction Source: Ministry of Justice (Turkey) (Aksel, İ. ‘Turkish Judicial System: Bodies, Duties and Officials’) There are no courts specialised in tenancy law. The Code of Civil Procedure197 specifies that the ordinary ‘civil courts of peace’ will, regardless of the amount or the value of the matter in dispute, deal with all the cases concerning lease relation except those cases where the provisions of the Code of Enforcement and Bankruptcy198 concerning the eviction of the tenant by a proceeding without judgment are applicable. Therefore, all eviction cases, cases concerning the termination of contracts, cases concerning fixing the price and accompanying actions of debt and claims for damages shall be heard at the ordinary civil courts of peace. The parties can decide the court of competent jurisdiction in the contract. The decision of the enforcement court on the eviction does not prevent filing a claim for eviction at the civil court. The decisions of the civil courts could be challenged directly at the High Court of Appeals. The long-­planned district courts of appeals have not yet been operational in Turkey. • Are there regulatory law requirements influencing tenancy contracts o E.g. a duty to register contracts;; personal registration of tenants in Eastern European states (left over of soviet system) The Turkish tenancy law does not impose a duty to register contracts;; however allow their registration by the land registry if agreed on in the contract.199 Solely the tenant’s request for the registration is not sufficient, the landlord should agree thereupon and this agreement should be made in writing either as part of the tenancy contract or as a separate contract. Otherwise, the parties may not request the registration. If the landlord 197
Code of Civil Procedure No. 1086 (1927), O.J. 622,623,624/2,3,4 July 1927 (Hukuk Usulü Muhakemeleri Kanunu). 198
Code of Enforcement and Bankruptcy No. 2004 (1932), O.J. 2128, 19 June 1932 (İcra ve İflas Kanunu). 199
Art. 312 TCO. 68 is not the owner of the dwelling, the clause on the registration requirement is not valid unless the landlord holds a specific authorisation or the owner gives consent.200 The registration of tenancy contracts at the land register is not mandatory but it is highly recommended for their enforceability against third parties and new owners. Especially in cases where the ownership of the dwelling is transferred as a result of execution proceedings, tenants do not have the possibility to continue their tenancy unless they prove the existence of the contract either by registration or by an official document. o Regulatory law requirements on -­ new and/or old -­ habitable dwellings capable of being rented -­ e.g. on minimum size, number of bathrooms, other mandatory fittings etc. There are no regulatory law requirements specified for rental housing ensuring that the buildings are habitable or bear a minimum level of quality for habitability. On the other hand, all dwellings, regardless of their tenure type, must comply with some regulatory law requirements (including, among others, earthquake-­resistance rules and energy regulations) in order to obtain the permission to be used for habitation. The only check in relation to the capability of being rented arises from the tenancy law and the contractual agreement of the parties, as discussed in the following sections. o Regulation on energy saving The Energy Efficiency Law (2007), has set the legal framework for energy efficiency and prevention of wasteful use of energy in order to reduce the burden of energy costs on the economy and protect the environment. On 15.12.2008, a Regulation on Energy Performance of Buildings was published by the former Ministry of Public Works and Settlement. Accordingly, buildings (except a few categories such as buildings smaller than 50 square meters) built after 2007 have to comply with the insulation standards in order to get license. As for the dwellings that have been previously built in accordance with the regulatory requirements, an energy performance certificate (Enerji Kimlik Belgesi, EKB) has to be obtained until 02.05.2017. The new regulation on energy saving stipulates the existence of the energy performance certificate for the purchase, sale or lease of a building or independent parts of a building. The landlord has to submit a copy of the energy performance certificate to the tenant immediately or, in case of dwellings built before 2007, as soon as the certificate is issued.201 200
Aydemir, E. Kira Hukuku: Yeni Türk Borçlar Yasasına Göre. Second Edition. Ankara: Seçkin, 2013, 113. Ministry of Environment and Urbanisation (Turkey) ‘Binalarda Enerji Kimlik Belgesi (EKB) Nedir?’ https://www.csb.gov.tr/db/samsun/webmenu/webmenu4379.pdf (retrieved 16 June 2014). 201
69 6.2 The preparation and negotiation of tenancy contracts Preliminary Note: We suggest that for each section (6.2 through 6.7) and each tenancy type some concluding remarks should be provided in a summary table about the rights and duties of tenant and landlord and the main characteristics (in telegram style). Summary Table 9. Preparation and negotiation of tenancy contracts Choice of tenant -­ No obligation for a landlord to enter into a contract (freedom of contract) -­ Exceptions deriving from family law, inheritance law and the sale of the dwelling Ancillary duties Good faith principle • Freedom of contract o Are there cases in which there is an obligation for a landlord to enter in to a rental contract? The principle of freedom of contract lies at the core of the Turkish tenancy law. As a general rule, there is no obligation for a landlord to enter into a rental contract. On the other hand, transfer of the ownership of a rented dwelling might be considered as an indirect limitation to the freedom of contract. The person who acquires the dwelling with a tenant residing in becomes the landlord party to the tenancy contract. The transfer of the tenancy contract to the heirs of the tenant in the case of his or her death might be another exceptional case where the landlord’s freedom of contract is partially limited. • Matching the Parties o How does the landlord normally proceed to find a tenant? Real estate agents are widely preferred by landlords to find a tenant. Online portals are also increasingly used. Notices hung on the windows of the dwellings for rent usually with an accompanying telephone number is also widespread. A very traditional, though still quite effective way, is to ask friends, neighbours and acquaintances whether they know someone looking for an apartment for rent. This is because the landlords want to find tenants whom they can trust for the proper use of the apartment as well as for the payment of the rent. In most cases, landlords take all these steps to find a tenant, ie, ask acquaintances, advertise in the Internet, hang notices on the window and inform one or more real estate agents about the availability of the dwelling. o What checks on the personal and financial status are usual? In particular: May the landlord ask for a salary statement? May he resort to a credit reference agency and is doing so usual? There is no regulation on what kinds of checks on the personal and financial status are allowed. In most cases, landlords ask for one or two guarantors with whom they would 70 conclude guarantee agreements to secure the payment of the rent. Landlords are not prohibited from asking salary statement or other proofs of income from a potential tenant to demonstrate his or her financial status. Asking information from credit reference agencies, on the other hand, is not common in Turkey. However, it is reported that some landlords would get information on a potential tenant’s financial situation in unusual ways: they would find out whether a potential tenant is eligible for consumer loan, by sending a text message including the potential tenant’s ID number to some credit institution which offers the possibility to apply for loans via text message. Traditionally, single tenants and non-­married partners are not favoured as it is believed that such tenants would not use the dwelling properly and would cause trouble to the neighbours. Therefore, landlords, although very rarely nowadays, ask couples to prove their marriage by showing their certificate of marriage. o How can information on the potential tenant be gathered lawfully? In particular: Are there blacklists of “bad tenants”? If yes, by whom are they compiled? Are they subject to legal limitations e.g. on data protections grounds? Almost any means of gathering information is acceptable in Turkey as no effective data protection rules exist. In practice, tenants are already willing to provide for any information voluntarily in order to have higher chances of renting an apartment, thus they do not usually mind landlords seeking information about their financial situation or private life. There are no official blacklists of “bad tenants.” However, real estate agents in a certain neighbourhood usually have an informal networking and keep each other informed about tenants who creates problems by, for instance, not paying the rent on time, causing damage to the dwelling, disturbing neighbours, or else demonstrating undesirable behaviours. Although there is no such legal obligation, real estate agents want to find ‘good tenants’ to keep the business going with the landlord for the future tenancy relations. There is usually a fast circulation especially in big cities and landlords might have to find new tenants every two–three years. o What checks may and does the tenant carry out on the landlord (e.g. to avoid being trapped by a swindler landlord) The Turkish land registry is open to public and confirming the ownership of the property by the landlord would be a rational check. However, in practice no or very few tenants carry out any checks on the landlord as tenants are usually in a weaker position, especially when looking for an apartment. In cases where the landlord lives at the same building, prospective tenants sometimes ask the neighbours or the real estate agents on the landlord’s personality regarding whether he or she would tolerate noise, parties, etc. and whether he or she would intervene with the private life of the tenant which is not an untypical case in Turkey. o Services of estate agents (please note that this section has been shifted here) § What services are usually provided by estate agents? Services of real estate agents typically include finding a tenant for landlords, bringing the two parties, i.e. the landlord and the tenant, together and making the initial arrangements 71 for the conclusion of a tenancy contract. They usually serve as a price negotiator between the landlord and the tenant and they look after the interests of both parties in this regard. Real estate agents also accompany prospective tenants to the dwellings for rent to show the dwelling. They are not allowed to charge additional fees for this service, although in practice some of them would unlawfully ask a certain fee to show the apartments for rent. § To what extent are estate agents regulated? In particular: are there rules on how an agent should present a house, i.e. on the kind of information which needs to be given? Real estate agents remain unregulated to date, however a draft bill regulating the basic issues such as the establishment, rights and duties of the real estate agents has been proposed in 2013. Currently, real estate agencies function according to a Communication on Compulsory Standards issued by the Ministry of Industry and Commerce.202 The Communication lays down general rules on the services, management, service environment and the employees of the real estate agencies. Only few rules on how real estate agents should present a house exist under the Communication. It is stipulated that agents should own or otherwise ensure that a transport vehicle is available to their service to show the dwelling onsite to their customers. Written and visual documents describing the dwelling should be prepared in a way that they can be referred to as legal documents in cases of conflict. Signs on the real estates’ windows indicating they are for sale or rent should be big enough to be noticed from a distance.203 § What is the usual commission they charge to the landlord and tenant? Are there legal limitations on the commission? According to the Communication mentioned just above, services of the real estate agencies should be provided in accordance with the tariff of fares prepared by the relevant trade association or chamber of commerce or in accordance with the custom. The amount of commission to be charged should be indicated on a notice hung in the real estate office in a way that would be easily noticed by the customers. The notice should also include the information that showing customers the dwellings is free of charge. Under the current practice, landlords are not charged any commission. Tenants are charged 10 per cent of the annual rent and the VAT regardless of the duration of the tenancy agreement. • Ancillary duties of both parties in the phase of contract preparation and negotiation (“culpa in contrahendo” kind of situations) There are no provisions in the TCO directly dealing with the phase of contract preparation and negotiation. Culpa in contrahendo is, though, applied by the courts either through 202
Communication on the Compulsory Standards for the Services of Real Estate Agents No. ÖSG-­2003/59 (2003), O.J. 25162/8 July 2003 (Emlak Komisyonculuğu Hizmetleri Mecburi Standart Tebliği). 203
Paragraphs 1.1.9, 1.1.10, 1.1.11 Communication No. ÖSG-­2003/59. 72 specific provisions204 or by way of applying the good faith principle enshrined in the Turkish Civil Code.205 The High Court of Appeals has ruled that, during the phase of contract preparations, the parties must show due care and must take necessary measures to avoid causing harm to each others’ personality and property rights.206 6.3 Conclusion of tenancy contracts Summary Table 10. Conclusion of tenancy contracts Requirements for valid conclusion -­ No requirements regarding the form of -­ General requirements of any valid contract (mutual and corresponding declaration of both parties’ intent on the use of the object) Regulations limiting -­ Contracts including impossible, unlawful or immoral clauses freedom of contract are void in whole or in part. • Tenancy contracts o distinguished from functionally similar arrangements (e.g. licence;; real right of habitation;; Leihe, comodato) Tenancy contract is a typical contract which means that its essential points, rights and obligations of its parties and its termination are prescribed by law.207 As a principle, it is the substance of the contract that determines the type of the contract. Therefore, provisions relating to the tenancy contracts apply even when the parties name it under other names or do not name it at all. Tenancy contracts are similar to some other contracts specified under the TCO, such as the loan for use, loan and leasing. However, there are also essential differences between these types of contracts and tenancy contract as briefly explained below. Loan for use (commodatum) The TCO defines the loan for use as “a contract whereby the lender undertakes to make an object available for the use of the borrower for free and the borrower undertakes to return the object to the lender after using it.”208 204
For instance, in cases of mistake in contracts, according to Article 35 of the TCO, “Where the mistake is due to the negligence of the rescinding party, he is bound to compensate for the damage resulting from the cancellation of the contract, unless the other party knew or should have known the mistake.” Translation: Adal, E. The negligence of the party is considered as a failure to show due care in contract negotiations. 205
Art. 2 TCC provides that “Every person is bound to exercise his or her rights and fulfil his or her obligation’s in accordance with the principles of good faith. The law does not protect the evident abuse of rights.” (AT). 206
Y. HGK E. 2012/13-­1220 K.2013/239 (13.2.2013). 207
Acar p. 41. 208
Article 379 TCO (AT). 73 The loan for use contract differs from tenancy contracts mainly because of the absence of a simultaneous mutual obligation for both parties. Whereas the tenancy contract is a typical synallagmatic contract obliging both parties to provide something to the other party, the borrower in loan for use contract gets the object for his or her use for free. The absence of a reciprocal obligation in loan for use contracts has several practical results. For instance, unlike tenancy contracts, ordinary loan for use contracts can be terminated by the lender merely upon his or her request.209 Loan for consumption (mutuum) Under the TCO, a loan for consumption contract is “a contract whereby the lender undertakes to transfer a certain amount of money or other fungible goods to the borrower and the lender undertakes to return objects of the same quantity and quality.”210 The distinctive character of the loan for consumption contract lies in the fact that the lender has the authority to consume the good or the money which is the object of the contract. This basic feature of the loan contract exposes its main difference from the tenancy contract. Indeed, fungible goods cannot be the subject of a tenancy contract. Such difference between the two types of contracts has practical aspects requiring, for instance, due care under tenancy contracts on the use of the object, which would be impossible in loan for consumption contract by its very nature. The transfer of the ownership of the object and thus the requirement of lender to be the owner of the object in the first place also differs from the tenancy contract whereby the owner is not necessarily a party to the contract.211 As explained in the following sections, a tenancy contract might be concluded between tenant and landlord who might be a person other than the owner of the dwelling. Financial Leasing Financial leasing contract is regulated by the Financial Leasing, Factoring and Financing Companies Law Nr. 6361.212 According to that, a leasing contract involves transferring the possession of an asset by the lessor to the lessee at the end of lease giving the lessee the right to purchase the asset at a sum less than its current market value on certain conditions relating to the lease period.213 209
Art. 384 TCO provides as follows: “Where the loaned object is provided and neither the duration of the loan nor the purpose of use is stipulated, the object may be reclaimed by the lender whenever the lender wishes.” (AT). Acar, 49–50. 210
Art. 386 TCO (AT). 211
Acar, 51. 212
Financial Leasing, Factoring and Financing Companies Law No. 6361 (2012), O.J. 28496/ 13 December 2012. (Finansal Kiralama, Faktoring ve Finansman Şirketleri Kanunu). 213
Article 3(ç) of the Financial Leasing, Factoring and Financing Companies Law provides as follows: “Financial leasing: A leasing transaction enabling one of the following aspects on condition to be based on a financial leasing contract;; transferring the possession of an asset by the lessor authorized pursuant to this Law or related legislation to the lessee at the end of lease giving the lessee the right to purchase the asset at a sum less than its current market value at the end of the lease period, lease period shall cover more than eighty percent of the asset’s economic life, or the sum of current value of lease payments to be made pursuant to the financial leasing contract shall constitute more than ninety percent of the current market value of the asset.” Translation available at: Banking Regulation and Supervision Agency, http://www.bddk.org.tr/websitesi/english/Legislation/115986361factoringlaw_engrev_er_onx.pdf 74 Financial leasing contracts appear to be similar to rent contracts as they deal with rights and obligations of the parties entailing the use (and usufruct) of a thing against an agreed payment, although they differ from tenancy contracts in many ways. First of all, the objective of getting loan or providing finance dominates the financial leasing contract and it involves the transfer of ownership as an ultimate objective. Furthermore, the freedom of contract is limited in financial leasing contract as only those prescribed by law can be the lessor.214 Other differences between the two types of contracts include the obligatory insurance of the leased good in financial leasing and the prohibition of the transfer of ownership by the lessor to third parties.215 o specific tenancy contracts, e.g. contracts on furnished apartments;; student apartments;; contracts over room(s) only (e.g. student rooms);; contracts over rooms or apartments located in the house in which the landlord lives himself as well. Please describe the legal specificities in these cases. The TCO does not cover any specific tenancy contracts regarding furnished apartments or student apartments. The provisions on regular tenancy contracts apply in all cases. In practice, specific provisions are included in the tenancy contract in order to tailor it to the particular circumstances. For instance, in cases where only a certain part of the apartment, for instance one bedroom, is rented, this is explicitly mentioned in the contract along with the detailed information on the common areas which the tenant is allowed to use and on his or her rights and obligations over those areas. It is sometimes the case that one room in a rented apartment is left outside the scope of the tenancy agreement and reserved for the use of the landlord as storage. In such cases, tenants are usually not allowed to enter the locked room. In case of renting out furnished apartments, landlords mostly list the specific furniture and equipment in the tenancy contract and depending on their value, the amount of deposit might be higher than usual (within its legally specified limits). Students often conclude tenancy contracts where only one student signs the contract as the tenant. This is, however, not recommended as when the student-­tenant moves out, the other students who continue living in the apartment might be easily evicted on the basis of unlawful occupation.216 • Requirements for a valid conclusion of the contract o Formal requirements There are no formal requirements for a valid conclusion of a tenancy contract. It can be concluded by the mutual and corresponding declaration of both parties’ intent explicitly or implicitly, in writing, orally or even tacitly. 214
Article 3(d) of the Financial Leasing, Factoring and Financing Companies Law defines lessor as: “participation banks, development and investment banks as well as financial leasing companies.” Translation: Regulation and Supervision Agency. 215
Acar, 54–60. 216
Hakimler ve Savcılar Yüksek Kurulu Hukuki Müzakere Toplantısı Raporu, Konya, 22–23 September 2012. 75 o Is there a fee for the conclusion and how does it have to be paid? (e.g. “fee stamp” on the contract etc) Until 2005, a fee stamp at the value of 1.65 per mille of the annual rent was to be adhered on the tenancy contracts. Starting from 1 January 2005, a new system of direct payment to the tax office replaced the former practice. Currently, tenancy contracts for business premises are subject to a tax stamp at the value of 1.65 per mille of the annual rent which is paid either by the landlord or by the tenant. If the tenancy contract is prepared in duplicate, the tax stamp is paid twice for each.217 If guarantors or joint debtors are involved, five times of 1.65, i.e., 8.25 per mille of the annual rent is paid.218 On the other hand, tenancy contracts for residential premises concluded by natural persons are not subject to tax stamp unless they are concluded before public notary or submitted to public notary.219 o Registration requirements;; legal consequences in the absence of registration Note: If relevant, please distinguish the various existing registers, e.g. land register, tax register, register of domicile. There are no mandatory registration requirements specifically for tenancy contracts. The following registers, however, are relevant. Registration of the tenancy contract by the land register is not mandatory, but it is recommended for providing proof. It is also advised to register the contract for the protection of the tenants for several reasons. If the tenancy contract is registered in the land register, it will be binding for the new owners when the ownership of the apartment is transferred. Even in cases where the ownership is transferred to a mortgagee, the mortgagee does not have the possibility to evict the tenant immediately if the tenancy contract is registered. Unregistered tenancy contract creates right in personam, not right in rem. The registration of the tenancy contract solely by the tenant, i.e., without authorization of the landlord, is not valid.220 On the other hand, it can be stipulated under the tenancy contract that the contract shall be registered in the land register. Tax authorities should be notified of those tenancy contracts to which stamp duty, discussed above, applies. The absence of notification causes tax penalty for the tenant and landlord jointly and severally. Register of domicile is obligatory regardless of the tenure type;; the new address should be registered within twenty days after moving to a new dwelling. The tenant should provide the local authority (muhtarlık) with a document indicating his or her new address. The document can be a subscription agreement for electricity, phone, etc. as well as an approved tenancy contract. Failing to comply with the registration within twenty days incurs penalty of 390 Turkish Liras. 217
Art. 5 Stamp Tax Code No. 488 (1964) O.J. 11751/11 July 1964 (Damga Vergisi Kanunu). Art. 6 Stamp Tax Code. 219
Table No IV/31 and Table No 2, IV/34 Stamp Tax Act. 220
Özkan, H. Kira Sorunları El Kitabı. Istanbul: Legal 2013, 6, 19. 218
76 • Restrictions on choice of tenant -­ antidiscrimination issues o EU directives and national law on antidiscrimination There is no specific national law on antidiscrimination. The legal fight against discrimination, by rather general provisions, stems from the Constitution, relevant international treaties to which Turkey is a party, several national codes including provisions on discrimination in specific fields (such as the Political Parties Code,221 Labour Code,222 National Education Basic Code,223 Law on the Establishment of Radio and Television Enterprises and their Media Services,224 Law on Social Services and Child Protection Institution)225 and, most notably, the new Turkish Criminal Code No. 5237, effective from 2005.226 The Criminal Code, includes, for the first time in Turkish legislative history, an explicit provision identifying discriminatory behaviour as an offence in its seventh section on offences against freedom. The provision is as follows: “(1) Any person who makes discrimination between individuals because of their racial, lingual, religious, sexual, political, philosophical belief or opinion, or for being supporters of different sects and therefore;; a) Prevents sale, transfer of movable or immovable property, or performance of a service, or benefiting from a service, or bounds employment or unemployment of a person to above listed reasons, b) Refuses to deliver nutriments or to render a public service, c) Prevents a person to perform an ordinary economical activity, is sentenced to imprisonment from six months to one year or imposed punitive fine.”227 Within this framework of the amended Turkish Criminal Code, refusing to sell or rent a property to a particular person, although the property has been offered to the public for sale or rent, is considered discrimination and has become a crime. But discrimination is prohibited only as regards a number of items listed in the Criminal Code as the race, language, political opinion, philosophical belief, religion, sect and similar reasons and hate-­based practices. Some other grounds of discrimination, ethnic origin, sexual orientation and gender identity are not included within the list, even after the amendment in March 2014. Sexual orientation and gender identity still create social problems. The above provision of the Criminal Code is criticised also from a practical point of view, more specifically, on grounds of proof: specific intent sought for the imputability of the offence makes it almost impossible to prove its existence except truly evident cases. It is, 221
Political Parties Code No. 2820 (1983), O.J. 18027/24 April 1983 (Siyasi Partiler Kanunu). Labour Code No. 4857 (2003), O.J. 25134/10 June 2003 (İş Kanunu). 223
National Education Code No. 1739 (1973), O.J. 14574/24 June 1973 (Temel Eğitim Kanunu). 224
Law on the Establishment of Radio and Television Enterprises and Their Media Services No. 6112 (2011) O.J. 27863/15 February 2011 (Radyo ve Televizyon Kuruluş ve Yayın Hizmetleri Hakkında Kanun). 225
Law on Social Services and Child Protection Institution No. 2828 (1983), O.J. 18059/27 May 1983 (Sosyal Hizmetler ve Çocuk Esirgeme Kurumu Kanunu) 226
Criminal Code No.5237 (2004), O.J. 25611/12 October 2004 (Türk Ceza Kanunu) 227
Art. 122 Criminal Code. Unofficial translation at: http://www.legislationline.org/documents/action/popup/id/6872/preview 222
77 therefore, seen far from providing a protection against discriminative practices, – including the discriminative choice of tenants – at least until the jurisprudence establishes otherwise.228 Current practice of choice of tenants by the landlords is rather discretionary;; landlords, in some cases openly, avoid entering into tenancy agreement with certain individuals on grounds of their nationality, ethnicity, gender, marital status, religion and occupation. They even declare that they would not rent their apartment to people from certain religions or ethnic groups. • Limitations on freedom of contract through regulation o mandatory provisions in rental contracts, in particular: mandatory minimum requirements of what needs to be stated in a tenancy contract There are no mandatory provisions with regard to the content of the tenancy contracts. On the other hand, essential terms of the contract must be met according to the general provisions of contract law. Accordingly, “a contract is concluded upon the expression by the parties of their mutual and corresponding intent. The expression of intent might be express or implied.”229 When the parties agree on the essential terms of the contract, the contract is deemed to be concluded regardless of the secondary terms. In the absence of agreement on the secondary terms, the court decides them according to the nature of the transaction.230 In this regard, essential terms of a tenancy agreement are as follows: -­ handing over the use of the object of the tenancy, -­ the rent, -­ agreement of the parties.231 o control of contractual terms (EU directive and national law);; consequences of invalidity of contractual terms Generally, the principle of freedom of contract prevails in contract law.232 However, contracts containing provisions against imperative rules, ethics, public order and individual rights;; and contracts whose substance is impossible are absolutely null and void.233 If only some provisions of the contract are void, this partial invalidity does not affect the validity of other parts. On the other hand, if it is clear that the contract would not have been concluded without the invalid parts, the entire contract becomes invalid.234 228
Karan, U ‘Türk Hukukunda Ayrımcılık Yasağı ve Türk Ceza Kanunu’nun 122. Maddesinin Uygulanabilirliği’. TBB Dergisi 73 (2007) 1146–173. 229
Art. 1 TCO (AT). 230
Art. 2 TCO provides as follows “Where the parties have agreed on the essential terms of a contract, the contract is presumed to be concluded even if the secondary terms have been left out. Where no agreement can be reached on the secondary terms, the judge determines them with due regard to the nature of the transaction. The provisions on the form of the contracts are reserved.” (AT). 231
Gümüş, 34–36. 232
Art. 26 TCO provides as follows: “Parties may determine the substance of a contract freely within the legally prescribed limits.” (AT). 233
Art. 27/I TCO. 234
Art. 27/II TCO. 78 While this general rule on contract law is applicable to tenancy contracts, there are also specific provisions concerning the contractual terms on tenancy contracts. For instance, Article 346 of the TCO explicitly prohibits the acceleration clauses in tenancy contracts. If the tenancy contract includes an acceleration clause, the clause is invalid while the contract itself is valid and effective between the parties. At a more specific level, a new consumer law, the Law No. 6502 on Consumer Protection235, entered into force on 28 May 2014, aiming at bringing the Turkish consumer legislation in line with the EU acquis, besides providing more efficient protection for consumers than the protection provided by the previous law. The Consumer Protection Law defines unfair terms generally and leaves the procedures and principles in regard to their control to be determined by a regulation which also provides for an unrestrictive list of unfair terms.236 Unfair terms in a consumer contract are null and void while the contract itself is valid and effective.237 The Law provides, regarding the control of unfair terms, that the Ministry of Customs and Trade takes the necessary measures to prevent the use of unfair terms and to remove unfair terms from the general consumer contracts. The Ministry requests the removal of the unfair terms from the party who has drawn up the contract and gives a period of thirty days which can be prolonged up to ninety days. The nullity of the unfair terms, then, should be communicated to the consumers clearly in writing or in electronic environment. The contract remains valid without the unfair terms. If the unfair terms are not removed within the period given by the Ministry, an administrative fine is imposed for each contract including the unfair terms.238 It should be emphasized that most of the landlords in Turkey are private landlords and thus the just-­described control of the unfair terms does not apply to typical tenancy contracts in practice given the absence of business-­to-­consumer aspect. However, it is theoretically possible to consider tenancy contracts as consumer contracts in cases where the landlord is a company or a profit making institution. On the other hand, provisions concerning consumer contracts apply to time-­share contracts which are mixed contracts having elements of tenancy contract, service contract and sale contract;;239 and might be relevant for tenants in some other cases such as the conclusions of contracts with providers of utilities. o statutory pre-­emption rights of the tenant Tenants do not have any statutory pre-­emption rights on the dwellings. However, they could be granted such rights by the contractual agreement. In that case, the pre-­emption right of the tenant should be registered in the land register. Registered pre-­emption rights may be exercised within a certain period indicated in the contract and in any case, for a maximum period of ten years.240 235
Consumer Protection Code No. 6502 (2013), O.J. 28835/28 November 2013 (Tüketiciyi Koruma Kanunu). 236
Art. 5(1), Art. 5(9) Consumer Protection Act. 237
Art. 5(2) Consumer Protection Act. 238
Art. 8, Art. 77 Regulation on the Unfair Terms in Consumer Contracts (2014), O.J. 29033/ 17 June 2014.(Tüketici Sözleşmelerindeki Haksız Şartlar Hakkında Yönetmelik). 239
Ankara Barosu Tüketici Hakları, Avukatlar İçin Tüketici Hukuku Rehberi Ankara: 2012, 70. 240
Art. 735 TCC. 79 o are there provisions to the effect that a mortgagor is not allowed to lease the dwelling (charged by the mortgage) or similar restrictions? There are no restrictions preventing a mortgagor from renting the dwelling charged by the mortgage. Many mortgagors, especially second-­home buyers, rent their dwellings to pay the mortgage. 6.4 Contents of tenancy contracts Summary Table 11. Contents of tenancy contracts Description of dwelling General contract law (in case of fundamental error or fraud related to the description of the dwelling, parties may not be bound by the contract) Parties to the tenancy contract -­ Tenant (natural or legal person) -­ Landlord (natural or legal person, not necessarily the owner of the dwelling) Subletting by a tenant is possible Multiplicity of persons as landlord or as tenant are possible Duration -­ Either open-­ended or limited in time -­ No minimum or maximum duration for validity -­ General provisions on lease contracts apply to tenancy contracts with a period of less than six months -­ Specific provisions on residential and roofed commercial premises apply to tenancy contracts with a period of more than six months Rent -­ No rent control system -­ Initial rent can be agreed freely -­ Rent increase rate is subject to an upper limit (PPI rate of the previous year) Deposit -­ Legally designated as a guarantee to cover claims of the landlord arising from the tenancy -­ Maximum three month’s rent -­ The tenant has to deposit the security in a bank savings in his/her name, not be released without the authorisation of the lanldord Repairs -­ Landlord has to maintain the dwelling in a condition fit for its designated use and has to repair defects that can not be 80 considered as usual or regular and that do not arise from defects attributable to the tenant -­ Tenant has to repair minor defects and defects which are attributable to him Utilities In the absence of any agreement or any local practice, utilities (heating, electricity and water) are borne by the tenant • Description of dwelling;; indication of the habitable surface (and consequences in case of the provision of wrong data) The TCO does not contain detailed provisions as to the description of the dwelling. However, it sets a minimum criterion on the dwelling by stipulating that the landlord should hand over the apartment in a condition fit for its designated use.241 In practice, tenancy contracts in writing include a term describing the designated use of the dwelling as well as its habitable surface and other facilities available in the dwelling. In cases where the wrong data are provided, tenants have the right to invoke the provisions regarding the defects of the dwelling. (see xyz). • Allowed uses of the rented dwelling and their limits o In particular: to what extent are mixed (residence/commercial) contracts lawful and usual (e.g. having a shop, a legal office or a doctor’s studio in the dwelling) The tenant is required to use the rented dwelling in accordance with the tenancy contract.242 The intended use of the dwelling is specified according to the purpose of renting and the fundamental nature of the dwelling. The application of the good faith principle, enshrined in Article 2 of the TCC, requires that the tenant can not use the dwelling for his or her professional activities or as a warehouse if he or she has rented the dwelling for residential purposes.243 Similarly, a dwelling rented to be used as a greengrocery can not be used as a café.244 • Parties to a tenancy contract o Landlord: § Who can lawfully be a landlord? Every natural or legal person can be a landlord. Ownership over a dwelling is not required to rent it. In other words, a tenancy contract concluded by a landlord who does not have any property right or personal right on the dwelling is valid. However, in cases where the dwelling is under the owner’s possession and if it is clear according to the good faith principle and the specific circumstances that the landlord would not be able to transfer the 241
Art. 301 TCO. Art. 316/I TCO. 243
Gümüş, 156. 244
Ibid. 242
81 use of the dwelling to the tenant, the landlord is responsible for the tenant’s positive damages unless he is at fault.245 Persons under guardianship can also be landlords;; the conclusion of open-­ended tenancy contracts and tenancy contracts for a period of more than three years in this case requires both the consent of the guardian and the permission of the guardianship authorities.246 It is possible to rent a dwelling by multiple landlords in cases of joint ownership and co-­
ownership. A dwelling subject to joint ownership can be rented out by a majority decision except the cases in which renting is deemed a compulsory and urgent management issue.247 On the other hand, a tenancy contract relating to a dwelling subject to co-­
ownership requires a unanimous decision, if it is not stipulated otherwise in the contract.248 § Does a change of the landlord through inheritance, sale or public auction affect the position of the tenant? When the ownership of a rented property is passed to someone else for any reason, the new owner becomes the landlord, and thus a party to the tenancy contract except in cases where the apartment is expropriated by public institutions.249 Inheritance All the rights and obligations derived from tenancy contract will be passed to the heirs of the landlord in case of his or her death. The tenancy contract will then be effective between the tenant and the heirs of the landlord. Sale When a rented dwelling is sold, its new owner becomes party to the tenancy contract as the landlord and the provisions of the tenancy contract remain effective between the tenant and the new owner. On the other hand, the new owner (landlord) has the possibility to terminate the contract only under certain circumstances set out in the TCO. • In cases where the sale has taken place as a result of enforcement proceedings, the new owner becomes the new landlord only if the tenancy contract is registered at the land register or the existence of a tenancy contract is proven in accordance with the law. Where the tenancy contract is not registered and the tenant does not have any such proof, he or she will be forced to return the dwelling within fifteen days. (See below, connections of the contract to third parties). o Tenant: 245
Gümüş, 37. Relevant provisions of the TCO are Article 112 (failure of performance, liability for damages) and Article 136 (impossibility of performance). Article 112 provides as follows: “Where the obligation is not performed at all or is not performed properly, the debtor is liable for damages unless he or she proves that no fault is attributable to him or her.” (AT) Article 136/I provides as follows: “An obligation ceases where its performance becomes impossible due to grounds that are not attributable to the debtor.” (AT) 246
Art. 462/b.6 TCC. 247
Arts. 689, 691/I TCC. 248
Art 702/II TCC. 249
Art. 310 TCO. 82 § Who can lawfully be a tenant? Every natural or legal person can lawfully be a tenant. Persons under guardianship can also be tenants;; the conclusion of open-­ended tenancy contracts and tenancy contracts for a period of more than three years in this case requires both the consent of the guardian and the permission of the guardianship authorities.250 A multiplicity of tenants is also possible. § Which persons are allowed to move in an apartment together with the tenant (spouse, children etc)? The TCO does not specify which persons are allowed to move in together with the tenant. On the other hand, specific provisions exist on the ‘family residence’ under both the TCC and the TCO. When the judicial practice and the provisions of the Turkish family law are considered, besides spouses and children, adoptees and close family members such as siblings and parents are allowed to live together with the landlord unless otherwise is stipulated in the tenancy contract.251 The principle of good faith and the specific circumstances of a case come into play when determining, for instance, how many siblings would be allowed to move in within the sphere of the tenant’s obligation to use the dwelling with due care and consideration. § Changes of parties: in case of divorce (and equivalents such as separation of non-­married and same sex couples);; apartments shared among students (in particular: may a student moving out be replaced by motion of the other students);; death of tenant Divorce The concept of ‘family residence’ was introduced in 2002 by the new Turkish Civil Code, TCC, which amended the previous one to a large extent. The relevant provisions of the TCC,252 however, do not define the family residence. It can be understood as the residence which is accepted as the centre of living for the family, i.e., the spouses and their children. The TCC provides that253, in cases where one of the spouses is the tenant of the family residence, the other spouse who is not a party to the tenancy contract has the possibility to become a party by a unilateral declaration. In that case, he or she is jointly and severally liable with the other (tenant) spouse. Under the TCO, family residence is also mentioned254 among the provisions on the leases of residential and roofed commercial premises. In case of divorce, the transfer of the rights and obligations under the tenancy contract to either of the spouses is not stipulated as a general provision by the TCC.255 However, the 250
Art. 462 TCC. For instance, letting the single sister live in the dwelling together with the tenant does not constitute a breach of the tenancy contract. Özkan, 32. 252
Arts. 240, 255, 279 and 652 TCC. 253
Art. 194 TCC. 254
Art. 349 TCO. 255
Compare the source Swiss Civil Code (Art. 121). 251
83 spouses may agree that the family residence would be allotted to one of them. On the other hand, a similar specific provision provides for the cases where the spouses have concluded an agreement of shared separate property that the judge may decide the allocation of the dwelling to the spouse who is not party to the tenancy contract.256 In this case, the contractual rights of the landlord are protected by a decision accompanying the judgment for divorce or annulment of the marriage. The situation of the separation of non-­married and same sex couples are not prescribed by law. Provisions relating to the regular tenancy contracts apply in such cases. Death of the tenant The TCO makes a distinction between the death of lessee in lease contracts and the death of tenant in tenancy contracts for residential and roofed commercial premises. In the first case, i.e. the death of the lessee, his or her heirs may terminate the contract by giving the legally prescribed notice on the next admissible termination date.257 As far as the tenancy contracts for residential and roofed commercial premises are concerned, the TCO provides that heirs of the deceased tenant or partners of the deceased tenant or heirs of the partners who carry out the same profession and craft and those who lived in the same apartment together with the deceased tenant have the right to retain the tenancy contract as long as they comply with its terms and with the law.258 § Subletting: Under what conditions is subletting allowed? Is subletting being abused e.g. with the aim of circumventing the legal protection of tenants (when the tenant is offered not an ordinary lease contract but a sublease contract only)? With regard to subletting and transferring the use of leased property to a third person, the TCO makes a distinction between lease contracts in general and tenancy contracts for residential and roofed commercial premises. In lease contracts, “the lessee is allowed to sublet or transfer the use of the leased object entirely or partly to a third party on the condition that it does not cause any harm to the lessor.”259 The extent of the harm is not mentioned in the provision. It is suggested that it should be read as “major disadvantages to the landlord” as in the source Swiss Law and the objective criteria should be considered for deciding whether the damage is major.260 The word “condition” in the provision does not literally imply a technical condition for the validity of the contract. Therefore, the subletting contract is valid even in cases where it causes major damage to the lessor;; the lessee is then liable for those damages in accordance with the general provisions of the TCO.261 As regards tenancy contracts for residential or roofed commercial premises, written consent of the landlord is required for subletting.262 However, it is suggested in the Turkish 256
Art. 254 (4) TCC. Art. 333 TCO. 258
Art. 356 TCO. 259
Art. 322/I TCO (AT). 260
See Art. 262 Swiss Code of Obligations. Gümüş, 213. 261
Art. 112 TCO. Gümüş, 213. 262
Art. 322/II TCO. 257
84 legal literature that the written form is not sought as a means of validity, but merely as a means of proof.263 The tenant is liable to the landlord if the subtenant uses the property in a way other than the permitted. In this case, the usual rights against the tenant may also be claimed against the subtenant by the landlord.264 The duration of the subletting contract can not be longer than the original tenancy contract. Otherwise, upon the expiration of the tenancy contract, the landlord has the possibility to evict the subtenant, if the legally prescribed conditions are met. In that case, the tenant is liable to the subtenant in terms of the subletting contract. Fraudulent agreements between the landlord and the tenant to terminate the tenancy contracts give rise to their liability to the subtenant in accordance with the provisions on tort liability.265 § Is it possible, and if yes under what conditions, to conclude a contract with a multiplicity of tenants (e.g. group of students)? In cases where there are several tenants, the landlord can either conclude separate contracts with each, for instance for a certain part of the apartment, or a single contract with a multiplicity of tenants. No specific rules relating to the multiplicity of tenants are laid down within the TCO. According to the prevailing opinion in the legal literature, when there is a multiplicity of tenants forming one party of the tenancy contract, each of them should be partially liable. This means that if joint and several liability is not explicitly or implicitly agreed to or no such motive can be derived from the specific circumstances, the tenants will be liable for the rent in proportion to their shares in their internal relation except for the commercial leases where statutory joint and several liability applies.266 On the contrary, some legal scholars of opposite views argue that joint and several liability does not necessarily need to base on contract or statutory law. These scholars apply provisions of the TCO on loan for use and safekeeping contract by analogy.267 According to this view, provisions on joint and several liability are applicable to the cases of multiplicity of tenants;; all of the tenants are liable and their liability may not be divided or proportioned.268 • Duration of contract o Open-­ended vs. limited in time contracts § for limited in time contracts: is there a mandatory minimum or maximum duration? 263
Gümüş, 221. Art. 322/III TCO. 265
Gümüş, 215. 266
Art 7/I Code of Commerce No. 6102 (2011), O.J. 27846/14 February 2011 (Ticaret Kanunu) Gümüş, 40–
41. 267
Loan for use (commodatum), Art. 382 TCO. Safekeeping contract, Art. 567 TCO. 268
Aydemir, 46. For a list of scholars who is of the opinion that joint and several liability applies to tenancy contracts with a multiplicity of tenants, see Gümüş, 41. 264
85 Lease contracts might be concluded either open-­ended or limited in time.269 There is no minimum or maximum duration for the validity of a lease contract. A long duration is valid;; however, if the duration is excessively long the contract is considered as open-­ended and the parties have the right to terminate the contract extraordinarily. On the other hand, specific provisions on the tenancy contracts for residential and roofed commercial premises270 is limited to the tenancy contracts with a period of more than six months. The TCO provides that “[t]hese provisions [regarding residential and roofed commercial premises] are not applicable to the leasing of immovables that are, by their nature, designated for temporary use, where the duration of the lease is six months or less.”271 Nevertheless, tenancy contracts with a period of less than six months can be concluded;; general provisions on lease contracts apply to such contracts. Movable and immovable properties regulated by the State Procurement Law272 form an exception to the general flexibility regarding the duration of rental contracts. For these properties, only limited in time contracts with a maximum duration of ten years can be concluded. Certain pieces of land, mostly relevant with tourist facilities or natural gas or energy production facilities, are exempted from this rule of maximum ten years.273 o Other agreements on duration and their validity: “chain contracts”;; prolongation option;; contracts for life etc. The conclusion of limited in time tenancy contracts might be in different ways as far as the duration is concerned;; the duration can be specified in terms of days, months or years as well as by just indicating the beginning and ending dates. It is also possible to conclude a tenancy contract with duration due on a future occasion such as until the retirement or return from abroad. However, in unpredictable cases such as the dissolution of a joint stock company, the contract will be deemed open-­ended.274 The duration of the tenancy contract can be determined explicitly or tacitly.275 In case of contracts where the duration is tacitly determined, the objective of the tenancy contract, for instance renting a room during a congress, would determine the duration of the contract.276 The TCO contains a specific provision for the prolongation of time-­limited tenancy contracts for residential and roofed commercial premises. In the absence of notification by the tenant at least fifteen days prior to the termination of the contract, the contract will be deemed to be prolonged on the same terms and conditions for one year.277 The notification is only valid if it is given in writing.278 In cases where it is unclear whether a lease contract is concluded as an open-­ended or as a time-­limited contract, it should be 269
Art. 300 TCO. Arts. 339–356 TCO. 271
Art. 339 TCO. (AT). 272
State Procurement Law No. 2886 (1983), O.J. 18161/10 September 1983 (Devlet İhale Kanunu). 273
Art. 64/I State Procurement Law. Gümüş, 43–44. 274
Gümüş, 42–43. 275
Art. 327 TCO. 276
Gümüş, 43. 277
Art. 347 TCO. 278
Art. 348 TCO. 270
86 considered as an open-­ended contract.279 Nevertheless, as a result of the above-­
mentioned provision on time-­limited contracts for residential and roofed commercial premises, and the common practice, the chain contracts are not regarded as open-­
ended.280 Tenancy contracts concluded for the lifetime of the parties are void on grounds of the principle of good faith.281 • Rent payment o In general: freedom of contract vs. rent control The TCO lays down specific rules concerning rent payment for residential and roofed commercial premises.282 Tenancy contracts can not be amended to the disadvantage of the tenant except for the purpose of determining the amount of the rent.283 Rent control does not exist as an established system in Turkey. The term ‘rent control’ usually refers to the limitations to the rent increase. The principle of freedom of contract is central in Turkish tenancy law and the rent control (i.e., limitation of the rent increase as understood in Turkish legal parlance) has remained unregulated for a long time. The main reason for the absence of a rent control regime is the annulment of the related provisions of the Law Concerning the Lease of Real Estate, GKHK, by the Constitutional Court. The said Law, which entered into force in 1955, was the first legal act restricting the amount of rent in order to protect tenants: it froze the rents at the level of 1953 market value as an upper limit. Its provisions on rent freeze and rent control were, however, annulled by the Constitutional Court on the grounds that those provisions constitute a restriction that interferes with the essence of the right to property. In fact, the Constitutional Court has not in principle rejected the rent control but merely scrutinised the relevant provisions and gave the legislative organs a period of six months in order to establish rational and up-­to-­date rent control mechanisms.284 Since no such regulation was made in the aftermath of the decision of the Constitutional Court, the gaps have been filled by the judiciary, more specifically the High Court of Appeals, for a long time. Indeed, a well-­
established legal precedent on the control of rent increases was effective until the entry into force of the new Code of Obligations, TCO, in July 2012. Whereas there is no specific control against the initial rent, which can be fixed freely by the parties’ will, in the event of a major change in the circumstances the rent may be adjusted as explained below. Adaptation of tenancy contracts An indirect limitation to the principle of freedom of contract is the adaptation of tenancy contracts to new circumstances. The tenant and the landlord, while concluding a tenancy contract, build their motives on the common – or at least not contentious – view that no 279
Art. 300 TCO, Gümüş, 44. 281
Art. 2 TCC. Gümüş, 45. 282
Arts. 343–346 TCO. 283
Art. 343 TCO. 284
Öncü, Ö. ‘6098 Sayılı Türk Borçlar Kanunu’na Göre Kira Bedelinin Belirlenmesi’. İzmir Barosu Dergisi Borçlar Kanunu Özel Sayısı 77, no. 2 (2012): 300–348. 280
87 major change which could excessively disturb the balance between the performances of the parties would take place in the future. It Is this envision of the parties that constitutes the basis for a long-­term contractual relationship and if this envision collapses because of extraordinary and unexpected circumstances that affect the social life of a party significantly, he or she may request the alteration of the tenancy contract. In other words, if due to unforeseeable change of the circumstances and thus the change of the real rental value, fulfilment of the obligations becomes seriously difficult, parties may request the court to adapt the contractual obligations to new conditions. Both parties, ie, tenant and landlord, have the possibility to file a request for the adaptation of the rent. Usually, landlords would seek for the adaptation in times of high inflation rates and tenants in times of high devaluation rates if the rent is fixed at a foreign currency.285 The adaptation of tenancy contracts has its legal basis under general provisions on obligations prescribed in the TCO.286 According to that, parties might request the adaptation of a contract and if this is not possible they might terminate the contract in the event of new conditions that: -­ are extraordinary, -­ were unforeseeable at the time of the conclusion of the contract, -­ do not originate from the debtor, -­ change the circumstances at the time of the conclusion of the contract to the extent that the fulfilment of the obligations is no longer expectable by virtue of the principle of good faith;; -­ the debtor either has not yet fulfilled his or her obligations or has fulfilled his or her obligations but reserved his or her rights originating from the hardship of performance. The possibility of requesting the adaptation of a contract is limited to cases where the circumstances have extraordinarily changed such as the case of an unexpected economic crisis, very high inflation, an earthquake or other natural disaster. As the extraordinary conditions imply those having social dimension, it is not possible to file a claim for the adaptation of a tenancy contract if the new conditions lack social dimension. In such cases, the tenant may still revoke the contract if the conditions for extraordinary termination are met.287 o Rent control: how is it legally framed;; when does it apply;; who carries it out;; what are the consequences when the parties agree on an excessive rent It is worth repeating that the concept of rent control in Turkish legal parlance refers to the restrictions on the rent increases. The principle of freedom of contract applies strongly in setting the initial rent which in practice shapes according to the market forces and often the interests of the landlord. The reason for the absence of rent control is usually sought in the historical development of the tenancy law, as discussed above. 285
Gümüş, 82. Art. 138 TCO. 287
Art. 331 TCO (extraordinary termination on grounds of important reasons). Gümüş, 84, 87. 286
88 The strict application of the principle of freedom of contract to rent payment leaves only a little room for the possibility of challenging the rent in exceptional cases such as fraud or within the context of the adaptation of the contract to the new circumstances. In the same vein, the new TCO introduced a rent (increase) control system only with regard to the rent increases, while it left the control of the initial rent unregulated. o Maturity (fixed payment date);; consequences in case of delayed payment Unless otherwise agreed or required by local custom, the payment, as well as the accessory charges if applicable, has to be made at the end of each month.288 This provision applies to all tenancy contracts whether they are open-­ended or limited in time.289 In practice, the tenants mostly pay the rent prior to the use. According to the High Court of Appeals, if parties have agreed on advance payment in the beginning of the month, the payment should be made until the third day of each month.290 The fixed payment date, as agreed to by the parties of the tenancy contract, is considered within the scope of the provision of the TCO setting the conditions for the default of the debtor.291 Thus, the tenant would be directly in default upon the expiry of the time limit for payment;; no notification from the landlord is required.292 Two delayed payments within one rental year or within the rental period for contracts with a period of less than one year gives the landlord the possibility to terminate the contract on certain conditions that are legally prescribed.293 o May the tenant exercise set off and retention rights over the rent payment? (i.e. the tenant withholding the rent or parts of it when the landlord does not respect his contractual duties, e.g. does not repair a defect);; According to the general provisions of the TCO, if two persons owe each other sums of money or other identical obligations and both claims are due, each of them may set off his or her debt against his or her claim.294 The debtor may waive his or her set off right in advance.295 In line with this general rule, the tenant may exercise set off rights over the rent payment. Furthermore, the TCO covers a specific prohibition with regard to lease contracts: the lessor and the lessee may not waive in advance their right to set off claims arising from the lease.296 Within this framework, the tenant can not waive in advance his or her set off rights from the rent payment for claims arising from the value increase due to the alterations made in the apartment.297 288
Art. 314 TCO. Gümüş, 184. 290
Y. 6. HD E. 2007/1868 K. 2007/3965 (5.4.2007). 291
Art. 117 TCO. 292
Regarding the notification, opposite views exist in the legal literature. See Gümüş, 185. 293
Art. 352/2 TCO. 294
Art. 139 TCO. 295
Art. 145 TCO. 296
Art. 326 TCO. 297
Gümüş, 207. 289
89 The TCO does not grant any specific retention rights to the tenant. On the contrary, the landlord has retention rights if the conditions are met.298 o May claims from rental agreements be assigned to third parties (i.e. may the landlord assign his rent claim to a bank?) According to the general provisions of the TCO on assignment of claims, a creditor may assign his or her claim to a third party, without the debtor’s consent unless prohibited by law, contract or the nature of the legal relationship.299 In that vein, the landlord may assign his or her claims from the rental agreement to a third party such as a bank. Similarly, in cases where the tenant has claims from a sublease may assign these claims to a third party which is usually the landlord in sublease cases. o May a rent payment be replaced by a performance in kind (e.g. reparation, renovation)? Does the tenant have a statutory right to this effect? Could a lien of the “tenant-­contractor” create problems in that case? (a lien is a statutory right of a contractor to ensure his being paid for his performances, e.g. improvements to the house, e.g. § 648 BGB) It is possible that the rent payment is replaced by performance in kind if the parties agree thereupon. In such cases where the tenant undertakes performance in kind instead of monetary or other fungible payment, the contract is usually considered as a mixed contract.300 o Does the landlord have a lien on the tenant’s (movable) property in the house (Vermieterpfandrecht as in § 562 BGB, which functions as a guarantee for the payment of the rent by the tenant)? If yes, what is the scope of this right? How is it enforced? The landlord has a lien on the tenant’s movable property used for the decoration of the dwelling or located in the dwelling for other purposes.301 The lien constitutes a guarantee for the amount of accrued rent for one year or accruing rent for six months. If a subtenant is residing in the dwelling, the landlord’s lien covers the movable property in the apartment belonging to the subtenant provided that it does not exceed the rental debt of the subtenant owed to the tenant. The lien may not cover the non-­distrainable goods of the tenant. If the tenant wants to transfer the movables away from the rented apartment the landlord has the possibility to withhold the movables that are of value corresponding the lien upon the decision by a justice of peace or by a bailiff. The landlord may not take or remove any movable secretly or forcefully;; otherwise the landlord will be forced by police to return them within ten days from the date of taking or removal. 298
Arts. 336–338 TCO. Art. 183 TCO. 300
For opposite views, see Gümüş, 183. 301
Art. 336 TCO. 299
90 • Clauses on rent increase o Open-­ended vs. limited in time contracts o Automatic increase clauses (e.g. 3% per year) o Index-­oriented increase clauses The principle of freedom of contract rules the conclusion of tenancy contracts including the contractual terms on fixing the amount of the initial rent. However, while the parties may determine the initial rent upon their agreement, clauses on rent increase are subject to certain restrictions prescribed by the TCO. The previous law, in force until July 2012, allowed parties of the tenancy contract to include rent increase clauses entirely on their will basing on the principle of freedom of contract. It was possible to agree to rent increases of 70% or 80% per year.302 With a view to protecting the tenant, the new TCO sets out more detailed rules and restrictions on the clauses on rent increase. A temporal exception to the rent increase clauses is prescribed under the Law No. 6217 Amending Certain Laws in order to Accelerate Judicial Services. In commercial tenancies where the tenant is a merchant within the meaning of the Turkish Commercial Law or a private or public law legal entity, Article 344 of the TCO on the rent increases will not be applicable for eight years (starting from 01.07.2012). In such cases, contractual provisions will be applicable within the sphere of the principle of the freedom of contract. If there are no provisions in the contract, the provisions of the repealed Code of Obligations shall apply.303 The specific provisions of the TCO on residential and roofed commercial premises lay down the rules on rent increase making a distinction based on the duration of the tenancy contracts with a term up to five years and tenancy contracts with a term for more than five years. Tenancy up to five years The rent increase rate is determined on the basis of the agreement of the parties on the condition that the increase rate does not exceed the increase rate of the Producer Price Index (PPI) of the previous year.304 The TCO points out that the amount of the rent increase in tenancy contracts up to five years is fixed by the parties’ will;; however, the agreed amount may not exceed the PPI increase rate of the previous year. In cases where the parties agree to the rent increase in proportion to other indices (such as consumer price index or wholesale price index), the PPI increase rate still provides the basis in determining the maximum amount of the rent increase. This means that in cases where the parties have agreed to a rent increase, the judge can not interpret the rule otherwise for instance on equitable basis. 302
The High Court found the rent increase clauses “not less than 80%” and “70%” lawful in its decisions in 2000 and 2003 (Y. 12. HD E. 2000/14385 K. 2000/15278 T. 17.10.2000, Y. 6. HD E. 2003/8598 K. 2003/8719 T. 4.12.2003). 303
Gümüş, 68, 69. 304
Article 344/I TCO 91 On the other hand, judges have more room in cases where there is no contractual term on the rent increase. If the parties have not specified how the rent increase would be made, the new rent will be determined by the judge by considering the condition of the dwelling and on an equitable basis;; however the rent will not exceed the PPI increase rate in this case either.305 This rule applies both in cases where the parties have not agreed on an increase at each prolongation or have agreed thereupon however have not specified the amount of the increase. Tenancy for more than five years The provision of the TCO on rent increases includes a separate paragraph for tenancy contracts with a period of more than five years, and for tenancy contracts prolonged after five years regardless of whether any agreement thereupon exists.306 According to that, at the end of each period of five years, the new rent is determined by the judge on an equitable basis considering the PPI increase rate, the condition of the dwelling and the rental value of the equivalent dwellings. The rent determined in this way after each period of five years can be altered for the following years in accordance with the principles explained above for the tenancy up to five years. • The provision, with the phrase “tenancy contracts with a period of more than five years or prolonged after five years” covers all renewed time-­limited tenancy contracts –no matter how many times the original tenancy contract has been renewed– until the end of the fifth year. For example, in case of the fourth renewal of a tenancy contract with duration of one year, the rent increase at the end of the fourth renewal period (fifth renewal year), will be determined on this basis.307 The new rent in these cases of renewal after five years will be determined by the judge on an equitable basis considering the PPI increase rate, the condition of the dwelling and the rental value of the equivalent dwellings. Unlike the tenancy contracts up to five years where the PPI rates constitutes an upper limit for rent increases, the first rent increase after five years is not restricted with the PPI rate. If the expert reports show that the new rent determined basing on the condition of the dwelling and the rental value of the equivalent dwellings is higher than the rent that would be found basing on the PPI increase rate, the judge decides on the applicability of the exceeding amount by considering the other two criteria on an equitable basis. In considering the condition of the dwelling, the judge takes into account various features such as its size, age, location, quality, luxurious elements such as swimming pool, sports facilities, etc.308 Equivalent dwellings are those situated in the same floor of the same building and similar in size and quality. In cases where no such dwelling exists, it is possible to consider the dwellings in the nearest buildings as equivalent.309 305
Article 344/II TCO. Article 344/III TCO. 307
Gümüş, 72. 308
Gümüş, 73. 309
Aydemir, 237. 306
92 The Application of PPI Before the TCO, entered into force in July 2012, the issues on rent increases were solved on the basis of the High Court of Appeals’ precedent as the previous Law of Obligations had not included any provisions on the rent increases. The new regulation restricting the rent increase with the PPI of the previous year created uncertainty as to which one of the two yearly PPI indexes should be applied: the rate of change basing on the twelve month averages or the rate of change basing on the equivalent month of the previous year. The TCO does not specify which one of the indices should be considered. The High Court of Appeals has clarified this in a decision where it was held that the yearly increase rate of the rent is calculated on the basis of the average value of the PPI of the twelve months of the previous year (as announced by the TurkStat).310 The average PPI for 2014 has been announced as 10.25%.311 Foreign currency The TCO includes another restriction to rent increases with regard to contractual clauses regarding the payment in foreign currency. If the tenancy contract stipulates the payment in foreign currency, the rent can not be altered before five years from the conclusion of the contract;; however excessive hardship in performance (specified under Article 138 TCO) is reserved.312 After the expiration of five years, the aforementioned rule for tenancy for more than five years313 applies taking into account the changes in the currency exchange. Even though the parties of a tenancy contract agree to a rent increase besides payment in foreign currency, the increase clause shall not be applicable for the first five years.314 The process The tenant may always challenge excessive rent increase. Under the TCO, it is possible for both parties to file a suit to fix the rent at any time.315 However, the date of the effect of the court’s decision might differ according to the date of the lawsuit and the existence of a rent increase clause in the tenancy contract. -­ If the tenancy contract does not include any rent increase clause, a lawsuit should be filed or a notice should be given before the new rental period. In this case, the court’s decision is effective on the new rental period if certain conditions are met. In cases where a lawsuit to fix the rent is to be directly filed without any notice, it should be filed at least thirty days before the beginning of the new rental period. It is also possible to file the lawsuit at a later date, provided that a written notice is given (by the landlord) at least thirty days before the beginning of the new rental period.316 For example, if the rental period ends on 15.07.2014, either a lawsuit should be brought or a notice should be given latest 310
Y. 6. HD E. 2013/13435 K. 2013/16370 T. 5.12.2013. Turkish Statistical Institute, http://www.tuik.gov.tr/PreHaberBultenleri.do?id=18648 312
Article 344/IV TCO. 313
Art. 344/III TCO. 314
Aydemir, 239. 315
Art. 345/I TCO. 316
Art. 345/II TCO. 311
93 by 15.06.2014. Where these periods are not complied with, the decision will take effect starting from the next rental period.317 -­ If the tenancy contract includes a clause on the rent increase for the new rental period, the court’s decision on the rent following the lawsuit (which has been brought until the end of the new rental period) takes effect starting from this new period.318 Accordingly, parties have the possibility to file a lawsuit until the end of the new rental period and no prior notice is required for that.319 In cases where a lawsuit is filed without following the regular periods, the decision will be effective starting from the next period. For example, for a tenancy contract effective from 20.05.2011, the end of rental period is 20.05.2012. If the lawsuit is filed on 10.07.2012, the court’s decision on the rent increase will be effective for the rental period starting from 20.05.2013.320 • Utilities o Describe the usual kinds of utilities (e.g. basic utilities like the supply of water, gas and electricity vs. additional utilities, i.e. services such as waste collection) and their legal regulation Utilisation and operational expenses, as referred to in Turkish tenancy law, imply the expenses resulting from the services that the tenant makes use of in relation to the dwelling. These expenses usually include heating, water supply, electricity supply, and concierge services. In addition, environmental sanitation tax is considered among the utilisation expenses.321 Electricity, water and gas charges are invoiced on a monthly basis by the relevant institutions and the bills are sent to individual customers. The service fee covers the common expenses of the apartment blocks such as the concierge services and gardening services. It is usually charged on a monthly basis and its amount might range according to the scope of the services included. In small apartment blocks it might merely include the cleaning of the staircases and regular repairs and maintenance, and it is easily affordable. In luxurious residences, on the other hand, it includes the maintenance of the swimming pool, sports and free time facilities and would sometimes be almost as high as the rent. Environmental tax is also considered as a kind of utilisation and operational expense. According to the Law on Municipal Revenues322 (Belediye Gelirleri Kanunu), except for certain buildings specified by law, all buildings –residential or commercial or used for else purposes– that are located within the municipal boundaries and make use of environmental cleaning services are subject to the environmental tax.323 317
Aydemir, 241. Art. 345/III TCO. 319
The Assembly of Civil Chambers of the High Court of Appeals have ruled in this vein consistently. Y. HGK. E. 2005/3-­23 K. 2005/48 T. 9.2.2005. 320
Aydemir, 240. 321
Aydemir, 87. 322
Municipal Revenues Law No. 2464 (1981), O.J. 17354/29 May 1981 (Belediye Gelirleri Kanunu). 323
Aydemir, 87. 318
94 o Responsibility of and distribution among the parties: § Does the landlord or the tenant have to conclude the contracts of supply? Parties may decide whether the landlord or the tenant has to conclude the contracts of supply. In practice, this is mostly carried out by tenants. If the tenancy agreement does not include any clauses on the supplies, the tenant has to conclude the contracts of supply and is responsible for those expenses. § Which utilities may be charged from the tenant? If not otherwise stipulated in the tenancy agreement and no contrary local practice exists, utilities such as heating, electricity and water will be borne by the tenant. The party who bears the expenses has to hand over copies of the relevant documents to the other party on his or her request.324 It is possible to agree that the rent includes the heating expenses. In that case the heating expenses are considered as part of the main rent instead of forms of utilisation expense, and their non-­payment causes the default of the tenant. On the contrary, even though it is agreed that the rent includes electricity or the concierge expenses, these may not be considered as part of the main rent. Thus the tenant is still responsible to pay these expenses, but if he or she fails to pay, he or she will not be in default for the rent, but only for the unpaid expenses.325 The environmental tax also falls outside the scope of the main rent and the accessory costs, thus accepted as a kind of utilisation expense. The tenant is responsible for the payment of the environmental tax to the municipality.326 § What is the standing practice? § How may the increase of prices for utilities be carried out lawfully? § Is a disruption of supply by the external provider or the landlord possible, in particular if the tenant does not pay the rent? In practice, tenants conclude contracts of supply directly with the provider since such expenses are deemed to arise directly from the personal consumption of the tenant. The inclusion of supplies in the rent is not widely practiced in Turkey. Moreover, landlords avoid concluding contracts of supply for their tenants fearing that tenants may disappear without paying the bills of supplies for several months. Therefore, increase of prices for utilities only affects the contractual relationship between the provider of the supply and the tenant leaving the landlord outside of any potential problems. Occasionally, tenancy contracts concluded with public institutions and private large institutions specify that the rent includes certain utilities. In those cases, the increases in the expenses for the utilities reflect on the rent by virtue of the principle of good faith.327 324
Art. 341/I, II TCO. Y. 6. HD E. 1982/8263 K. 1982/8444 T. 6.10.1982. 326
Aydemir, 88. 327
Aydemir, 237. 325
95 The disruption of supply by the landlord is not possible, as usually the landlord is not a party to the agreement between the provider and the tenant. However, the external provider would cease providing its service in cases where the tenant fails to pay the bills despite a written notice and after the elapse of a certain period specified therein. While the impossibility of disruption of supply by the landlord or an external institution is the standing practice for tenancy contracts, a slight deviation from that is exceptionally possible as far as dwellings subject to urban transformation projects are involved. The Law No. 6306 on Restructuring of Areas under Disaster Risks determines the procedures and principles regarding the rehabilitation, clearance, and renovations of areas and buildings at disaster risks. According to Article 4(3) thereof, the supply of electricity, water and natural gas for those constructions under risk or situated in areas under risk are ceased by the relevant supplier institutions upon the request of the Ministry of Environment and Urbanisation, TOKI or the authorised administration, made after consulting with the right holders.328 • Deposit: o What is the legal concept (e.g. is the deposit an advance rent payment or a guarantee deposit to cover future claims of the landlord)? In order to avoid the risk of loss in cases of breach of contract, the landlord usually requests from the tenant a certain amount of money or other securities as an assurance. The payment of an amount of money at the beginning of contractual relationship as such assurance is called “payment of deposit” in Turkish law implying a form of safeguard against the breach of the due care obligation by the tenant, for instance cases where the tenant causes damage in the dwelling or fails to pay the accessory costs. In that vein, the deposit can not be considered as an advance payment. While the deposit serves mainly covering possible future damages to the apartment, assuring the payment of the rent is usually provided by concluding surety contracts with third parties.329 Although the deposit is supposed to be considered by the landlord only as a guarantee for the damages and the accessory costs, in practice it often replaces the unpaid rents by the tenant for a certain period which would correspond to the amount of the deposit. o What is the usual and lawful amount of a deposit? The TCO explicitly states that if the tenancy agreement requires that the tenant should pay an amount of deposit, its value may not exceed the sum of three months rent.330 328
An interesting case in this regard took large place in the Turkish media in 2013. The Council of State has annulled the decision of the Ministry of Environment and Urbanisation on an urban transformation project regarding the Saraçoğlu District in Ankara. A motion for stay of execution was also granted. In October 2013, the Minister made a declaration that the Court order would be followed;; he, however, stated that the problem was mostly created by the inhabitants of lojmans in the district who are personnel of State Council and continue to reside there despite warnings, and that they would disrupt the supply of electricity and water in the lojmans. Babacan, N. ‘Devletin Lojman Kavgası’. Hürriyet, 25 October 2013 http://www.hurriyet.com.tr/ankara/24943035.asp (retrieved 5 February 2014). 329
Gümüş, 161. 330
Art. 342/I TCO. Unlike the source Swiss CoO which includes the net rent and accessory charges, the TCO limits the amount of the deposit to the value of the rent for three months. Gümüş, 164. 96 In practice, the amount of the deposit varies according to both objective criteria such as the furnishing and subjective criteria such as the landlord’s first impression on the reliability of the prospective tenant. It is stated that, for instance in Istanbul the usual amount of deposit is around 1-­2 months’ rent;; however, the landlords request higher deposits from those who they do not trust.331 Similarly, in cases where the tenant is found via a common friend or an acquaintance, the landlords sometimes do not request any deposit at all. o How does the landlord have to manage the deposit (e.g. special account;; interests owed to the tenant?) It is possible, upon the agreement of the tenant and the landlord, to specify forms of security other than cash or negotiable instruments. Cash is nevertheless the most preferred form in practice by tenants and landlords. Unlike the previous Code of Obligations, the TCO covers detailed rules with regard to the payment of the deposit. It is specified that, in residential or roofed commercial leases where security is agreed in the form of cash or negotiable instrument, the tenant has to deposit it in a bank savings in his or her own name, not to be released without the authorisation of the landlord. The bank may release such security only upon the consent of both parties or upon a final payment order or the final decision of the court.332 It is worth emphasizing that the TCO assigns the tenant to carry out the requirements and the bank account securing the deposit has to be in the name of the tenant. However, the landlord may withdraw it without any power of attorney by submitting the court’s final order on the tenancy agreement or the final execution proceedings.333 The bank has to return the security to the tenant upon his or her request, if no written notification by the landlord is sent within three months after the expiry of the tenancy contract pointing out that he or she has commenced a legal action or execution proceedings against the tenant.334 It is controversial under Turkish law to whom the interest on the deposit or other payouts from negotiable instruments (fructus) belongs. While according to one view, the tenant might request the fructus, the dominant view points out that the fructus should be accepted within the scope of the security deposit since the TCO specifies the bank account as term deposit account and forbids the release of the money without consent of the landlord.335 As mentioned, these mandatory provisions are applicable only to residential and roofed commercial leases and only in cases where the deposit is in the form of cash or other negotiable instrument. On the other hand, the provision of the TCO on the deposit payment mentioned above is among those provisions which are going to take effect only after the expiry of the stipulated time if the tenant is a merchant within the meaning of the Turkish Commercial Code or is a private or public law entity. More specifically, it will not be applicable to the mentioned tenants until 01.07.2020. Thus in those cases, relevant 331
‘Ev Sahipleri, Gözü Kiracıyı Tutmadıysa Depozitoyu Artırıyor’ Emlak Kulisi 27 September 2007 http://emlakkulisi.com/ev-­sahipleri-­gozu-­kiraciyi-­tutmadiysa-­depozitoyu-­artiriyor/974 (retrieved 11 April 2014). 332
Art. 342/II TCO. 333
Gümüş, 166. 334
Art. 342/III TCO. 335
Gümüş, 165. 97 clauses of the tenancy agreement apply;; and if there are no such clauses, the former TCO applies. o What are the allowed uses of the deposit by the landlord? The scope of the security deposit, i.e., which claims of the landlord it covers is an interpretation issue in the Turkish legal literature. It is suggested that in case of doubt, it should be accepted that the security deposit covers all claims of the landlord arising from tenancy such as arrears in rent and claims for damages. On the other hand, in cases where the landlord has obtained a separate guarantee agreement for the rent, the security deposit does not cover the arrears in rent, unless otherwise is agreed in the tenancy contract.336 In practice, however, besides the damages made to the apartment, the security deposit covers rents in arrear and sometimes unpaid expenses for utilities such as water and electricity services. It is reported that, even after the entry into force of the TCO in 2012, landlords keep requesting the security deposit to be paid to them in cash and use the money beyond its specified purpose. Although this is not lawful any longer, tenants mostly agree to it in order to be chosen to rent an apartment among a number of candidate tenants. • Repairs o Who is responsible for what kinds of maintenance works and repairs? What kind of repairs or works may lawfully be assigned to the other party (especially the tenant) The TCO stipulates that the landlord has the duties to make the apartment available on the agreed date in a way that is suitable for its designated use and to maintain the apartment in such condition throughout the duration of the contract. This provision can not be customised to the detriment of the tenant in lease agreements involving residential and roofed commercial premises.337 Besides handing over the apartment fit for its designated use, the landlord has to maintain it in that condition during the tenancy agreement. For instance, if the apartment owners in a condominium take a decision to convert the central heating system to individual heating system, the landlord has to furnish the new system.338 The suitability of the apartment to its designated use is evaluated in terms of the good faith principle enshrined in the Turkish Civil Code. For instance, according to a decision by the Turkish High Court of Appeals, the landlord must ensure that the tenant is not disturbed by the landlord’s other tenants and by the neighbours.339 According to the TCO, “the lessee has the obligation to pay the expenses for the cleaning and maintenance required for the usual use of the leased object;; local custom is taken into consideration in this respect.”340 This provision does not mention what are considered 336
Ibid, 164. Art. 301 TCO. 338
Gümüş, 105. 339
Y. 13. HD E. 1996/3139 K. 1996/3683 T. 12.4.1996 340
Art. 317 TCO (AT). 337
98 as the repairs required for the usual use. It is accepted that minor repairs and ordinary cleaning should be carried out by the tenant and expenses arising from those should be borne by the tenant.341 On the other hand, repairs which can not be considered as usual or regular and which do not arise from defects attributable to the tenant should be undertaken by the landlord. For instance, if the windows of the apartment are broken as a consequence of an unexpected and unusual hail squall, the tenant may request the repair expenses from the landlord, as the defect does not result from his or her usual use of the apartment. On the contrary, if the windows are broken by the tenant or someone else who is under his or her supervision, the tenant should be responsible according to the above-­mentioned provision of the TCO. Likewise, defects in the power outlet, door lock, light bulb, flush, faucet, etc., resulting from the regular use of the apartment by the tenant (or someone else who is under the tenant’s supervision) should be remedied by the tenant. The assessment of the regular character of repairs and maintenance, ie, what kind of defects result from the normal use of the apartment by the tenant, is made in accordance with the local custom. The duty of the tenant to pay the expenses for the ordinary cleaning and maintenance is limited to those that have occurred after the conclusion of the tenancy contract. All the defects prior to the agreement and the hand over of the apartment should be remedied by the landlord who has the duty to hand over the dwelling in a proper way.342 • Connections of the contract to third parties o Rights of tenants in relation to a mortgagee (before and after foreclosure) Rights of tenants in relation to foreclosure differ depending on whether the tenancy contract is registered at the land register or not. Although the TCO does not make any difference between the registered and unregistered tenancy contracts, the practice arising from the Enforcement and Bankruptcy Code causes serious disadvantages for tenants. Under the TCO, the general principle regarding the transfer of ownership – the so-­called “sale does not break the tenancy agreement principle” in Turkish literature – applies in relation to the rights of tenants. As mentioned previously, if the apartment is transferred to a third party for whatsoever reason after the conclusion of the tenancy agreement, the new owner becomes a party to the agreement, i.e. becomes the new landlord, except in the case of expropriation.343 This rule applies to any kind of change of ownership including “non-­voluntary” transfers such as compulsory execution resulting from debt collection.344 The tenant has his or her usual rights and duties deriving from the tenancy agreement and he or she can bring those forward in the contractual relationship with the mortgagee who becomes the new landlord. The landlord has the right to terminate the tenancy contract extraordinarily only if certain conditions are met.345 (See Termination of tenancy contracts in 6.6). However, in order to enjoy the just-­described protection in the event of a foreclosure the tenant has to prove the existence of a valid tenancy agreement. According to the 341
Gümüş, 180 Ibid, 180 -­181 343
Art. 310 TCO. 344
Acar, 301. 345
Art. 351 TCO 342
99 Enforcement and Bankruptcy Code, only if the tenancy contract qualifies as an official document, tenants’ rights are not prejudiced from the fact that the new owner has obtained the ownership of the dwelling as a result of a foreclosure decree. While the tenancy law has a protective approach to tenants, the Enforcement and Bankruptcy Code poses a serious challenge to this protection. According to that, “if the dwelling is occupied by the debtor or by others without any agreement which has been concluded before the foreclosure and has been certified by an official document, a notification is given to the debtor and occupier ordering to evict from the premises within fifteen days.”346 Tenancy contracts in writing do not qualify as an official document within the context of the above provision;; therefore, the tenant may not be able to exercise his or her rights deriving from the tenancy law unless the tenancy agreement is registered at the land register or certified by a public notary or he or she proves his or her tenant status by another official document such as a previous notice given by the landlord. In case the tenant does not have any official document demonstrating the existence of a valid tenancy agreement before the foreclosure, he or she has two options upon his or her receipt of the eviction order: either to return the premises within fifteen days or to object the order by the Enforcement Court within seven days. 6.5 Implementation of tenancy contracts Summary Table 12. Implementation of tenancy contracts Breaches prior to handover The tenant may: -­ compel performance and claim damages -­ forego subsequent performance and claim damages -­ withdraw from the contract and claim (only) negative damages Breaches after handover Depending on whether a major or a minor defect occurs, the tenant may: -­ compel performance in addition to claiming damages for the delay in performance -­ forego subsequent performance and claim damages for non-­
performance -­ request the landlord to remedy the defect -­ ask for reduction of the rent proportional to the defect -­ ask for reparation of the damages -­ terminate the contract (only in case of important damages) -­ self-­remedy the defect and ask for the deduction of expenses from the rent 346
Art. 135/2 Code of Enforcement and Bankruptcy (AT). 100 Rent increases Either upon mutual agreement or by the landlord provided that the rent increase rate does not exceed the PPI rate of the previous year Changes to the dwelling Written consent of the landlord is required (except for the changes made to remedy a deficiency) The landlord may make changes only to remedy or prevent defects or where conscionable for the tenant Use of the dwelling As specified in the contract and with all due care for the dwelling and due consideration for others who live in the building and for neighbours
• Disruptions of performance (in particular “breach of contract”) prior to the handover of the dwelling o In the sphere of the landlord: § Delayed completion of dwelling The landlord has to hand over the dwelling on the agreed date in a condition fit for its designated use in the contract, and to maintain that the dwelling remains in that condition throughout the duration of the contract;; this provision may not be amended to the detriment of the tenant.347 The duty to handover is the primary obligation of the landlord. In cases where the landlord fails to hand over the dwelling on the agreed date and offers another date which is inconvenient for the tenant or a prospective date, the tenant may refuse the handover. In such cases, the landlord is deemed to be in default.348 The handover can be either actual or notional. The actual handover implies the actual takeover of the dwelling by the tenant, whereas the notional handover would require solely making the dwelling available for the tenant.349 In this respect, the absence of the physical delivery of the dwelling does not affect the validity of the tenancy contract, if the dwelling is legally or notionally handed over. For instance, delivery of the keys to the real estate agency would suffice for the legal handover.350 The dwelling might not be yet built at the time of the conclusion of the tenancy contract and the parties might have specified a prospective date for the beginning of the tenancy. In such cases, the landlord would still have to handover the dwelling at the agreed date regardless of any situation causing the construction works take longer time even though that situation is not attributable to him or her. Since the failure to handover the dwelling causes the default of the landlord, the tenant, in this case, has the possibility to invoke the optional rights enshrined in the general provisions.351 Accordingly, the tenant may compel performance and claim damages for delay in performance;; or he or she may instead forego subsequent performance and withdraw from the contract provided that he or she 347
Art. 301 TCO. Aydemir, 94. 349
Ibid, 94, Acar, 137–138. 350
Aydemir, 94. 351
Art. 125 TCO. 348
101 makes an immediate declaration. In the case of withdrawal from the contract, the tenant is entitled to claim only the negative damages.352 It is possible to agree on a compensation clause in case of delayed handover;; however if the tenant accepts the handover without reservation, he or she is deemed to withdraw his or her compensation claims.353 § Refusal of handover by landlord (in particular: case of “double lease” in which the landlord has concluded two valid contracts with different tenants) § Refusal of clearing and handover by previous tenant The above-­mentioned provisions of the TCO on the obligation of the landlord to handover the dwelling and on optional rights354 are also applicable in the event of refusal of handover by the landlord. The failure of the landlord to handover does not affect the existence or the validity of the tenancy contract.355 If two or more validly concluded tenancy contracts for the same dwelling exist, they are all valid. However, as only one of the tenants can physically occupy the dwelling, the other tenants are entitled to claim the damages pursuant to the provisions on subjective impossibility.356 The conclusion dates of the tenancy contracts do not grant any priority to the respective tenant.357 The tenant to whom the landlord has handed over the dwelling continues to use the dwelling in accordance with the tenancy contract whereas the other expectant tenants claim for the damages. § Public law impediments to handover to the tenant The above-­mentioned provisions relating to the failure of the landlord to hand over the dwelling apply in all cases regardless of the grounds of the failure. The landlord is responsible for the non-­performance even though the non-­performance results from the public law impediments or the actions of third parties such as the refusal of clearing and handover of the dwelling by the previous tenant. o In the sphere of the tenant: § refusal of the new tenant to take possession of the house The TCO does not stipulate any such action for the tenant as to take possession of the dwelling. If the reasons for the refusal to take possession derive from the tenant’s own sphere and are not attributable to the landlord, the tenant has to still fulfil the obligations under the tenancy contract including paying the agreed rents. • Disruptions of performance (in particular “breach of contract”) after the handover of the dwelling 352
Gümüş, 102–103. Özkan, 16. 354
Art. 301 TCO (the obligation of the landlord to handover the dwelling), Art. 125 TCO (optional rights). 355
Acar, 135. 356
Art. 112 TCO. 357
Gümüş, 104. 353
102 o Defects of the dwelling § Notion of defects: is there a general definition? § Examples: Is the exposure of the house to noise from a building site in front of the house or are noisy neighbours a defect? What about damages caused by a party or third persons? Is the occupation of the house by third parties such as squatters considered as a defect in the legal terms? There is no general definition for defect under Turkish legislation. In the legal literature, defect is defined as the imperfectness and lack of standard qualities in an object.358 As regards tenancy law, the main obligation of the landlord is to handover the dwelling without any imperfection and deficiency –i.e., without any defect– and to provide that it remains in such condition. Therefore, defects of the dwelling cause the failure of the landlord to fulfil his or her obligations under the tenancy contract.359 The TCO does not mention whether merely the absence of the agreed characteristics of a dwelling in the tenancy contract is a defect. In the legal literature, it is widely accepted that the absence of any contracted characteristic of the dwelling implies a defect and is within the scope of the landlord’s responsibility.360 The TCO makes a distinction between the defects of the leased property at the time of handover361 and the defects of the property occurring after the handover.362 For both cases, the TCO further specifies defects as important and unimportant and sets forth different consequences for each. Important and unimportant defects are not defined under the TCO. The definitions in the legal literature usually base on the analogies with the definitions of defects in sale contracts.363 Important defects are those which render the leased property unfit or significantly less fit for its designated use in the contract. If the dwelling is not adequate for the use pointed out in the tenancy agreement, it would either be impossible or seriously restricted to use the dwelling. Therefore, the absence of a bathroom in a dwelling, for instance, is considered as important defect.364 Unimportant defects are those which do not comply with the designated use of the dwelling in the contract but do not affect the use of the dwelling beyond bearing. For instance, cracked glasses in the windows of the rented apartment or broken floor tiles in the kitchen are unimportant defects in this sense.365 Defects, whether important or unimportant, might be material, economic or legal. Imperfections or lack of usual characteristics in the apartment, such as cracks on the walls of the apartment or broken sinks in the bathroom are material defects. On the other hand, defects which decrease making use of the apartment are economic defects. Renting out 358
Aydemir, 98. Ibid. 360
Gümüş, 109. 361
Art. 304 TCO. 362
Art. 305 TCO. 363
Acar, 185. 364
Aydemir, 99. 365
Ibid. 359
103 a dwelling of three floors with a central heating boiler of sixteen thousand calories – which is obviously not possible – causes the consequences of economic defects. If the designated use of the dwelling in the contract is not possible or is impeded on grounds of legal requirements such as the absence of occupancy permit, the dwelling has legal defects.366 In addition to material, economic and legal defects, immaterial (moral) defects are accepted to be covered by the TCO, unlike the previous Code of Obligations. Accordingly, for instance, continuous and disturbing noise in the apartment caused by neighbours,367 continuous smell coming from the restaurant located in the same building, a newly built highway close to the building might be considered as immaterial defects. Specific circumstances of a case are taken into account to decide whether such disruptions constitute defects. If the tenant can not make the use of the apartment as designated in the contract, it would be possible to accept the disruptions as defects. If third persons cause damages which are not attributable to the tenant or to the persons for whom he or she is responsible, the tenant can take action in accordance with the provisions of the TCO on defects as explained below. The occupation of the dwelling by squatters before its handover to the tenant undoubtedly prevents the use of the dwelling for its designated use under the tenancy contract, thus it should be considered as a defect according to the author of the present report. If the dwelling, on the other hand, is occupied by squatters after its handover, the tenant can take action against squatters in accordance with the TCC.368 § Discuss the possible legal consequences: rent reduction;; damages;; “right to cure” (to repair the defect by the landlord);; reparation of damages by tenant;; possessory actions (in case of occupation by third parties) what are the relationships between different remedies;; what are the prescription periods for these remedies The TCO deals with the legal consequences of defects in leased properties in two groups basing on whether those defects exist already at the time of the handover of the dwelling or have occurred after the handover. Defects at the time of handover of the dwelling369 If the dwelling has defects at the time of its handover, the tenant has two options on the basis of the level of the defect. In case of important defects, the tenant has two options as follows: First, the tenant may invoke general provisions of the TCO regarding the default of the debtor.370 This option gives the tenant the possibility to: -­ compel performance in addition to claiming damages for the delay in performance, or -­ forego subsequent performance and claim damages for non-­performance, or -­ withdraw from the contract. 366
Ibid, 98, 99. Gümüş, 108. 368
Art. 683 ff TCC (right of possession). 369
Art. 304 TCO. 370
Arts. 123–126 TCO. 367
104 Secondly, the tenant may invoke the provision of the TCO regarding the defects of the leased property that have occurred after the handover.371 This option gives the tenant the possibility to: -­ request the landlord to remedy the defect (the right to cure), or -­ ask for reduction of the rent proportional to the defect, or -­ ask for reparation of the damages. The tenant’s right to terminate the contract is reserved in case of important damages. In case of unimportant defects the tenant may invoke only the second of the above-­
mentioned options, i.e. the specific provision of the TCO regarding the defects of the leased property that have occurred after the handover. However, the tenant does not have the right to terminate the contract in this case. A distinction is made between important and unimportant defects, giving the tenant the possibility to invoke general provisions for default only in case of important defects. Indeed, as the tenancy contract establishes a continuous contractual relationship, the landlord might be liable also for the important defects occurring after the establishment of the contract. This may cause the default of the landlord since his or her obligation to handover the dwelling is not one-­off performance.372 Therefore, the TCO provides for the possibility to invoke the general provisions on default of the debtor in case of important defects.373 In case of important defects, the tenant has also the right to withdraw from the tenancy contract.374 The way Article 305 deals with the defects is found bizarre in that it actually restricts the rights of the tenant. As mentioned above, the tenant anyway has the right to refuse the handover of the dwelling by the landlord if the dwelling is defective. If he or she yet accepts the handover with unimportant defects, he or she will only have recourse to the “available” option of his or her optional rights and will not have the right to terminate the contract.375 Defects that have occurred after the handover of the dwelling376 It is possible that defects which were not there at the time of handover of a dwelling appear after a while. If such defects are not caused by the tenant and no fault is attributable to him or her, the tenant has the following options after he or she first requests the landlord to remedy the defect (the right to cure): -­ to ask for reduction of the rental price proportional to the defect, or -­ to ask for reparation of the damages. Exercising the right to reparation of the damages does not prejudice the use of other optional rights.377 371
Art. 305 ff.TCO. Gümüş, 118. 373
Arts. 123–126 TCO. 374
Gümüş, 118. 375
Art. 306 /II TCO. Gümüş, 119. 376
Arts. 305–308 TCO. 377
Art. 305/I TCO. 372
105 If the dwelling has an important defect, the tenant also has the right to terminate the contract.378 In case of unimportant defects occurring after the handover of the dwelling, the tenant does not have the right to terminate the contract. Right to cure379 The tenant has the right to request the landlord to repair the defect within a reasonable time, even though no fault can be attributable to the landlord. The system of the TCO requires the tenant to seek for the cure before he or she proceeds to use any of the other optional rights. The kind of the defect –i.e. whether it is important or unimportant – does not have a role;; the tenant has to request the landlord to repair the defects before he or she can use his or her rights laid down in the TCO.380 The tenant’s action to exercise his or her right to cure gives the landlord the duty to repair the defect.381 The reasonable time to remedy the defect depends on the nature of the work and should be determined in accordance with the principle of good faith.382 Right to Termination383 As mentioned above, in cases where the defect is important, the tenant has the optional right to terminate the contract after giving the landlord a reasonable time to remedy the defect and the elapse of the time without any effective result. Following conditions have to be met for the termination of the contract on grounds of defects: -­ the defect (that has occurred after the handover) should be such as to render the use of the dwelling impossible or prevent its use to a substantial extent, -­ the landlord should have been given reasonable time to remedy the defect, -­ the defect should have not been remedied within the given period. Holes in the roof, burst pipes, broken central heating boilers are usually accepted as important defects and allow the tenant terminate the tenancy contract provided that he or she complies with the above procedure.384 On the other hand, giving reasonable time might not be sought to terminate the contract in exceptional cases where setting a term for the repairs is clearly of no use or cannot be expected from the tenant by virtue of the principle of good faith. For instance, if the landlord can not be contacted since his or her location is unknown, or waiting for the cure period would cause further serious damage, the tenant can terminate the contract without the need to give the landlord any time to remedy the defect.385 378
Art. 305/II TCO. Art. 306/I TCO. 380
Arts. 306–307 TCO. 381
Gümüş, 122–123. 382
Aydemir, 103. 383
Art. 306/II TCO. 384
Gümüş, 123. 385
Ibid, 124. 379
106 Whether any fault is attributable to the landlord in causing the defect does not matter for the termination of the contract, as described;; the fault of the landlord is important only for the compensation as explained below. Right to self-­remedy and deduction of expenses from the rent386 The right to termination discussed above applies only in cases where the defect is important. If the defect is unimportant, the tenant does not have the right to terminate the contract;; but may remedy the defect at the landlord’s expense. Accordingly, in case of unimportant defects, the tenant has to first request the landlord to remedy the defect within a reasonable time. If the landlord fails to remedy the defect in due time, the tenant may remedy it at the expense of the landlord and claim the costs by deducting from the rent. For instance, leaking roof, pipeline leaks, broken window are unimportant defects and might be remedied by the tenant in this way.387 It is controversial under Turkish legal literature whether the tenant is entitled to apply the self-­remedy procedure in case of important defects;; i.e., whether the tenant can take action to repair the important defects at the landlord’s expense despite his or her right to terminate. The specific provision on the self-­remedy and deduction of the expenses from the rent does not make a distinction between important and unimportant defects and thus the option therein can technically be applicable to important defects.388 On the other hand, legal scholars of the opposite view find providing the landlord with a sort of fait accompli inappropriate and argue that the tenant may not deduce the expenses for important repairs from the rent. According to the second view, the tenant may remedy the important defects at the expense of the landlord only where he or she obtains judicial authority according to general contract law.389 Reduction of the rent390 As mentioned above, if the defect occurs after the handover of the dwelling, the tenant may ask for the reduction of the rent proportional to the defect.391 It is further provided that in case of defects affecting the use of the dwelling, the tenant may request the reduction of the rent in a proportional amount to the defect for the period beginning from the date on which the landlord was made aware of the defect until the date when the defect is remedied. As to what might be regarded as a defect affecting the use of the dwelling, it is usually accepted that the provision covers unimportant defects which would then be the opposite of the important defects that render the use of the dwelling impossible or prevent its use to a substantial extent.392 Unlike the right to terminate the contract, a reduction of the rent is not a secondary optional right: the right to cure does not have to be exhausted before requesting a proportionate reduction of the rent. In the same vein, whereas the choice of the right to termination on 386
Art. 306/II TCO. Gümüş, 125. 388
Ibid, 126. 389
Art 113 TCO. Ibid 390
Art. 307 TCO. 391
Art. 305 TCO. 392
Gümüş 128 387
107 grounds of important defects exhausts all other optional rights, the right to a reduction of the rent can be exercised together with the right to self-­remedy and the right to compensation.393 Although not explicitly stated by the TCO, the tenant may exercise the right to a rent reduction as long as the defect exists and latest until the date of termination of the contract. When the optional right to a rent reduction is used, the amount to be returned corresponding to the reduction from the previous rents which have already been paid may be claimed even after the termination of the tenancy contract.394 Replacement of the property by the lessor395 The TCO includes a provision as follows: “The lessor, instead of remedying the defect of the leased property, may replace it within reasonable time with an equivalent one that is free of defect. The lessor, by replacing the leased property with a defect-­free similar one immediately and compensating the entire damage of the lessee, may prevent the lessee from using his or her optional rights” (AT). 396 Although the application of this provision to tenancy contracts is not commonplace, the landlord has the possibility to replace the dwelling with an equivalent and defect-­free one. On the other hand, it is also suggested that the tenant requests the replacement by virtue of the principle of good faith.397 Damages398 The tenant has the right to claim for damages independently or together with another optional right. The damages in this context cover the defects that prevent the tenant from making effective use of the dwelling. The landlord has to pay compensation to the tenant for the damages from the defects, as long as he or she does not prove that no fault can be attributable to him or her. The damages to be compensated by the landlord are those which are caused by the defective performance and are limited to the positive damages. In practice, such damages mostly occur following a defect. On the contrary, the tenant whose apartment was robbed, for instance, can not claim the damages from his or her landlord for failing to protect the apartment.399 393
Ibid, 129–130. Ibid, 131. 395
Art. 306/III, IV. 396
Art. 306/II, III. 397
It Is suggested that Whereas the source Swiss Law (Art. 259c Swiss CoO) grants a similar right merely to the landlord, under Turkish law it is possible for the tenant to request the replacement. Although it is not stated explicitly, the tenant can make such a claim only if it is possible to replace the property by virtue of the principle of good faith. Gümüş, 131–132. (In the same vein, the application of the provisions on sale contract by analogy would require the consideration of possibility of replacement). 398
Art. 308 TCO. 399
Gümüş, 133. 394
108 Claims of third parties In cases where a third party dispossesses the dwelling or claims any right that is not compatible with the rights of the tenant in relation to the tenancy agreement, the landlord has the duty to remedy the situation and pay the damages upon the notification of the tenant in writing.400 The responsibility of the landlord in such cases applies both to cases of squatters and cases of lawsuits or execution proceedings commenced by third parties on legitimate grounds. While the landlord has the duty, in any case, to remedy the situation, the tenant may claim damages only if he or she has given a notice in writing. In cases where a third party acquires a limited real right on the dwelling and it affects the rights of the tenant, the same rule as the transfer of ownership applies by analogy.401 o Entering the premises and related issues § Under what conditions may the landlord enter the premises? The landlord has no permission to enter the premises without consent of the tenant as long as the tenant is residing in the premises. By entering the premises without consent, the landlord violates the “inviolability of domicile” which is a criminal offence under the Criminal Code.402 In cases where the general causes of annulment of criminal liability such as lawful self-­defence and necessity exist, the landlord, just as any third person, may be exonerated from the criminal liability for entering the premises.403 On the other hand, the tenant has to tolerate the landlord’s entry in the premises on certain occasions. A duty to tolerate enshrined in the TCO,404 gives the tenant the obligation: -­ to tolerate works intended to remedy defects or to prevent damage, -­ to permit the landlord or any third party appointed by the landlord, to inspect the premises to the extent required for maintenance, sale or future renting out. The landlord, on the other hand, must inform the tenant of the works and the inspections in due time and must take into account the tenant’s interests when they are carried out. The tenant has the right to claim rent reduction or damages.405 § Is the landlord allowed to keep a set of keys to the rented apartment? There are no rules regarding whether the landlord is allowed to keep a set of keys of the rented apartment. In practice, some tenants change the keys as soon as they move in a new apartment whereas some others allow the landlord to keep a set of keys. The important thing that legally matters is that the landlord may not use the spare keys to enter the premises without the consent of the tenant. § Can the landlord legally lock a tenant out of the rented premises, e.g. for not paying rent? 400
Art. 309 TCO. Art. 311 TCO. 402
Art. 116 Criminal Code. 403
Art. 25 Criminal Code. 404
Art. 319 TCO. 405
Art. 319/III, IV TCO. 401
109 The landlord is under no circumstances legally allowed to lock a tenant out of the rented premises. If the tenant does not pay the rent or does not otherwise fulfil his or her contractual obligations, the landlord can only take legal action against him or her. • Rent Regulation (in particular implementation of rent increases by the landlord) o Ordinary rent increases to compensate inflation/ increase gains The amount of the rent increase can be decided by the parties and can be specified in the tenancy contract, on the condition that it does not exceed the increase rate of the domestic PPI of the previous year.406 The landlord is not absolutely free to decide the amount of the rent increase on his or her own. If there is no clause on the rent increase, the new rent is set by the court depending on the duration of the tenancy, quality and condition of the dwelling and equity principle provided that the amount of the increase does not exceed the increase rate of the domestic PPI of the previous year.407 o Is a rent increase after renovation measures, e.g. upgrading the energy performance of the house, or similar lawful and dealt with in a special procedure? The landlord can carry out renovations or modifications of the dwelling that can plausibly be expected from the tenant to tolerate and that does not require the termination of the tenancy contract;; he or she has to give due consideration to the interests of the tenant during renovation and modification works.408 Whether a rent increase after renovation measures is allowed or not is not specified by the TCO. The parties of the tenancy contract might agree on a rent increase after renovation measures. In the absence of a relevant clause, the landlord may not unilaterally increase the rent. On the other hand, the tenant may request the reduction of the rent and claim the damages after renovation measures.409 o Rent increases in “houses with public task” The only tenure form that can be considered within the sphere of houses with public task is the lojman system as explained above (regulatory types of tenures with a public task in 4.3) and the provisions of the TCO on tenancy, including rent increases, do not apply to lojmans. The amount of the rent to be paid for these so–called public dwellings are determined by a commission coordinated by the ministry of finance at least three months prior to the beginning of each year and published in the official journal by a decree of council of ministers. o Procedure to be followed for rent increases The parties agree on the amount of the rent increase provided that it does not exceed the increase rate of the domestic PPI of the previous year. The TCO is silent about a specific procedure for rent increases. In practice, it is often agreed to orally by the parties. The landlord is advised, nevertheless, to send a notice via notary or at least in writing. 406
Art. 344/I TCO. Art. 344/II TCO. 408
Art. 320 TCO. 409
Art. 320 TCO. 407
110 Likewise, the tenant is advised to reply by the same means the landlord has used in sending the notice (i.e. via notary or in writing), if he or she has any objections to the rent increase. § Is there some orientation at the market rent;; if yes, how is the market rent measured/calculated (e.g. statistical devices such as a Mietspiegel [= rent statistics for a certain area])? The market rent is assessed typically on a district-­based approach. Due to the ongoing urbanisation and the rapidly growing construction, trends in popular districts change quite fast depending on the new facilities such as subway stations or shopping malls in the surroundings. Besides the location of a dwelling, several factors including, among others, its size, age, quality, luxurious elements are taken into consideration. o Possible objections of the tenant against the rent increase The tenant has the possibility to challenge the unlawful rent increase if it does not comply with the contract or if it exceeds the legally prescribed increase rate pointed out above. In order to object against the rent increase formally, the tenant should send the landlord a notice indicating his or her disagreement to the rent increase and the reasons for the disagreement. The tenant has also the possibility to file a suit requesting the court to decide the amount of the rent. • Alterations and improvements by the tenant o Is the tenant allowed to make (objective) improvements on the dwelling (e.g. putting in new tiles)? o Must, and if yes under what conditions, improvements of the dwelling by the tenant be compensated by the landlord? It is common in Turkey that the tenants make improvements on the dwelling without their landlords’ consent. These are usually the kind of improvements which become integral part of the dwelling (such as replacing the door with a steel one, renewal of the heating system, renewal of the roof tiles, etc), and for which tenants are normally not responsible. Before the TCO entered into force in 2012, the Court of Appeals granted the tenants the possibility to request the expenses in certain cases. The TCO has adopted a clear provision on the modifications made to the dwelling by the tenant with the main perspective that merely the use of the dwelling is left to the tenant and thus the tenant may not, in principle, make any alterations and improvements to the dwelling. Any change by the tenant in that vein gives the landlord the right to request the restoration of the dwelling to its previous condition and to claim the damages, and even the right to termination of the contract if the other conditions are met.410 According to the current legal position, the tenant may renovate or modify the dwelling only with the written consent of the landlord. Once the landlord gives such consent, he or she may not request the tenant to restore the dwelling to its previous condition, unless it has been agreed otherwise in writing.411 This provision is applicable to cases where the 410
Gümüş, 246. Art. 321 TCO. 411
111 tenant has made modifications to the dwelling to serve his or her individual needs better. Those modifications made to remedy a deficiency or made out of necessity to make the dwelling fit for its designated use, explained above, do not fall within its scope.412 The TCO further provides that the tenant, if not otherwise agreed in writing, may not request any compensation for the increase in value of the dwelling due to the renovation and modification he or she has made upon the consent of the landlord.413 This would mean that if the tenant has obtained the consent of the landlord to make alterations and renovations to the dwelling and the value of the dwelling has therefore increased, he or she may claim compensation for his or her expenses only if agreed in written form. It is accepted that the tenant may nevertheless claim the expenses according to the provisions of the TCO on unjust enrichment.414 o Is the tenant allowed to make other changes to the dwelling? § in particular changes needed to accommodate a handicap (e.g. building an elevator;; ensuring access for wheelchairs etc)? There is no specific provision regarding the changes needed to accommodate a handicap. The same rules on changes discussed above apply in the case of any change. In view of that, in order to build an elevator or to make other changes, the tenant would require the written consent of the landlord, unless otherwise is agreed in the contract. § fixing antennas, including parabolic antennas Tenancy law does not provide for specific provisions on fixing antennas and in such cases the rules explained above apply. However, the Condominium Law includes restrictions on the use of common areas in the dwelling. According to that, consent of the owners in a condominium or a decision in this respect is required to fix antennas in common places, for instance on the roof. On the other hand, in cases where the below conditions are met, it is also possible to fix antennas in common places without consent of other owners: -­ the area occupied by the antenna system should not exceed the ownership share of the owner, -­ there should be enough space for each owner for the establishment of the same antenna system, -­ the antenna system should not cause any damage to the main construction or the independent parts, and it should not have a negative effect on the structural analysis. -­ there should not be any central antenna system on the roof with the same features and qualities.415 The Turkish High Court of Appeals considers whether the available central system allows the owners to get information on a global level as the current social and cultural life standards require. In this respect, an already existing system making it possible to view 412
Gümüş, 246. Art. 321 TCO. 414
Arts. 77–82 TCO (unjust enrichment). Gümüş, 248. 415
Y. 18. HD E. 2005/3990 K. 2005/5189 T. 17.5.2005 413
112 only a limited number of channels would not prevent an owner who wants to fix a parabolic antenna to view international channels, if he or she meets other requirements.416 • Maintenance measures and improvements, in particular upgrading the energy performance of the house by the landlord o What kinds of maintenance measures and improvements does the tenant have to tolerate? o What conditions and procedures does a landlord who wants to make renovations need to respect (e.g. giving adequate [i.e. sufficiently long] notice;; offer an alternative dwelling;; offer a rent reduction to compensate for disturbances) Maintenance measures According to the specific provision of the TCO on the duty of tolerance, “the lessee must tolerate works that are intended to remedy defects or to prevent damage. The lessee must permit the lessor or a third party appointed by the lessor to inspect the leased object to the extent required for its maintenance, sale or subsequent leasing.”417 Although the provision does not literally seek for a strict requirement for the maintenance works, it is usually accepted that it should be necessary to carry out the maintenance works, as the provision provides an exception and constitutes an intrusion to the essence of the tenant’s right. The tenant has the duty to tolerate merely those works that are related to the contractual relationship and are deemed necessary by a reasonable landlord;; he or she does not have to tolerate, for instance, those works intended for the use of the dwelling by the successive tenants.418 The landlord must notify the tenant of the maintenance works in due time and must take into account the tenant’s interests while the work is carried out. Claims of the tenant for the reduction of the rent and for damages are reserved.419 The tenant may refuse to tolerate the works if he or she has not been notified by the landlord. If the use of the dwelling as designated by the tenancy contract deteriorates severely because of the maintenance works, the tenant may request a rent reduction according and may claim compensation for the damages caused by the maintenance works;; for the latter case, the fault of the landlord is sought.420 Improvements Besides the measures for the maintenance of the dwelling, the tenant has the duty to tolerate the improvement of the dwelling on certain conditions. The relevant provision of the TCO provides as follows: “The lessor may renovate or modify the leased object where the renovation or modification does not require the termination of the contract and it can be reasonably expected from the lessee to tolerate the renovation or modification. While 416
Y. 18. HD E. 2005/3990 K. 2005/5189 T. 17.5.2005 Art. 319/ I, II TCO (AT). 418
Gümüş, 173. 419
Art. 319/III, IV TCO. 420
Art. 307 TCO (rent reduction), Art. 308 TCO (damages). Gümüş, 175. 417
113 these renovation and modification works are carried out, the lessor has to give due consideration to the interests of the lessee. Rights of the lessee for reduction of the rent and for damages are reserved.”421 Modification and renovation works imply those which make changes to the dwelling in order to maintain its value or to make it better than it was at the time of the tenancy contract such as adding shutters to the windows.422 The tenant has the duty to tolerate the improvements where two conditions are met: -­ First, the modification and renovation should be bearable by the tenant. Whether the tenant is supposed to bear the works is estimated on objective criteria. The type and the duration of the tenancy contract, the duration of the modification and renovation works, their usefulness, their effects on the balance between the performances of the parties and their financial consequences for the tenant are considered. In this regard, converting the garden to parking lot, removing a room, converting the bathroom to a kitchen are sort of modifications that cannot be expected to be tolerated by the tenant. The evaluation is made, however, according to the circumstances of each particular case. Generally, improvements that restrict the tenant’s right of use extremely, works beyond the scope of modification, and far-­reaching luxury renovations fall outside the sphere of works that the tenant is expected to bear with.423 -­ Second, modification and renovation should not require the termination of the tenancy contract. Not requiring the termination of the contract appears to be a redundant expression since in cases where the tenancy becomes unbearable to the extent that it is possible to terminate the contract extraordinarily, there is no duty of the tenant to tolerate and thus a right to terminate the contract (due to the lack of the first condition of being bearable discussed above). It is suggested that the provision is merely a mistranslation of the source Swiss Code of Obligations and should be read as if the tenancy “has not been terminated”.424 In cases where the modification or renovation of the dwelling causes a significant restriction or change of the use of the dwelling as specified in the tenancy agreement, general provisions on the amendment to the contracts425 apply. The consent of the tenant is required in these cases.426 Lastly, the TCO requires the landlord to give due consideration to the interests of the tenant during renovation and modification works which is in fact an application of the principle of good faith. For instance, the landlord may not carry out any work for the replacement of the windows or heating system in winter when it is cold. Similarly, the landlord may not carry out any work in the dwelling at nights or convert the rooms of the rented dwelling to a supply depot.427 421
Art. 320 TCO (AT). Gümüş, 176. 423
Gümüş, 177. 424
Ibid, 178. 425
Art. 13 TCO. 426
Gümüş, 178. 427
Ibid, 179. 422
114 The tenant may request the reduction of the rent and claim damages if the agreed use of the dwelling deteriorates because of the improvement and maintenance measures and fault is attributable to the landlord for the deterioration. • Uses of the dwelling o Keeping animals;; producing smells;; receiving guests;; prostitution and commercial uses (e.g. converting one room in a medical clinic);; removing an internal wall;; fixing pamphlets outside. In general, the tenant has the duty to use the dwelling with due care in accordance with the contract and show due consideration to his or her neighbours and to the persons residing in the same building with the tenant.428 Due care implies, within this context, the use of the dwelling by the tenant in the same careful and attentive way as if the dwelling belonged to him or her. For instance, replacing a broken window with a tin board or using the walls as shooting range constitutes the breach of the duty to use the dwelling with due care.429 Besides the obligation to use the dwelling with due care, the tenant has to show due consideration to neighbours and persons sharing the building. Neighbours include those who live in the adjacent buildings.430 The duty of due care and due consideration is assessed by the judge according to the specific circumstances of a particular case. Whereas the usual damages resulting from the normal use of the dwelling are acceptable, certain uses of the dwelling as illustrated below are prohibited. Keeping animals The TCO does not include any provisions on whether the tenant is allowed to keep animals in the dwelling. However, the above-­mentioned provision on the duty to show due consideration for neighbours and persons sharing the building might be invoked if keeping animals disturb the neighbours. In practice, it is accepted that the tenant can keep animals only if it is allowed in the tenancy agreement or if the explicit consent of the landlord exists. Even in the absence of any clause prohibiting keeping animals in the tenancy contract, the landlord might oppose keeping animals. In a decision, the High Court of Appeals has stated that keeping dogs in a residential dwelling is not allowed even though it is not explicitly prohibited in the tenancy contract and even though none of the neighbours or other persons in the building has complained for a while.431 Furthermore, the Condominium Law requires that the owners living in the same building have to avoid any activities or behaviours that disturb each other. Neighbours can easily prohibit keeping animals on such grounds as, for instance, a dog barking loud at nights. 428
Art. 316 TCO. Aydemir, 106. 430
Ibid, 107. 431
Y. HGK E. 1981/6-­ 499 K. 1982/334 T. 7.4.1982. In an earlier decision, keeping chicken in the dwelling was found to constitute an infringement to the tenancy contract by the High Court of Appeals although it was not explicitly prohibited in the contract. Y. 6. HD E. 1964/4015 K. 1964/4838 T. 13.11.1964. 429
115 Unless otherwise is specified in the condominium management plan, it is not possible to keep animals in an apartment block. Producing smells Although no specific provision on producing smells exist in the TCO, it is usually accepted that producing any smell, smoke or dust beyond the reasonable tolerance infringes the duty of using the dwelling with due care and showing due respect to the neighbours enshrined in the TCO as well as the TCC.432 Receiving guests The landlord can not, in principle, prohibit the tenant from receiving guests. However, in cases where receiving guests go against the duties of care and due consideration to the neighbours, the landlord might invoke the above-­mentioned provision of the TCO on the use of the dwelling with due care and due consideration to neighbours.433 Prostitution and commercial uses The use of an apartment for prostitution is considered as an unbearable behaviour for the persons sharing the building or neighbours. The tenant may not use a residential dwelling for prostitution. In the same vein, the landlord may not rent out his or her other apartment for prostitution, if the apartment is located in the same building where the tenant resides.434 Other commercial uses of the dwelling are allowed only if it is agreed in the tenancy contract. Fixing pamphlets outside Tenancy legislation does not prohibit fixing pamphlets outside. If there is no contractual term otherwise, the tenant has the right to fix pamphlets outside as long as he or she uses the dwelling in line with the duty of due care and due consideration, and complies with the condominium regulations and the public law requirements. Removing an internal wall Removing an internal wall is not accepted within the sphere of the use of the dwelling with due care. The tenant is not allowed to modify or renovate the dwelling without the written consent of the landlord. Removal of an internal wall by the tenant is thus only possible if the landlord agrees to it in writing. o Is there an obligation of the tenant to live in the dwelling? Are there specificities for holiday homes? 432
Art. 316/I TCO, Art. 737 TCC. Gümüş, 159. Art. 316/I TCO. 434
If the landlord rents his or her other apartment in the same building for prostitution, the tenant has the right to terminate the contract. The landlord may not claim damages. Y. 13. HD E. 1996/3139 K. 1996/3683 T. 12.4.1996. 433
116 There is no obligation for the tenant to live in the dwelling, unless it is stipulated otherwise in the tenancy contract. The tenant may use the dwelling partially: he or she, for instance, may use only two floors in a three-­storey building or two rooms in an apartment with four rooms;; or he or she may live in the dwelling only for a certain period, for instance six months in a year. The tenant, nevertheless, has to pay the entire rent as agreed in the tenancy contract. The relevant provision of the TCO435 provides as follows: “As long as the leased is fit for use, the lessor has the duty to pay the rent even where he or she does not use it or uses it partially for any reason deriving from himself or herself. In this case, the expenses that the lessor does not have to make any longer are deducted from the rent” (AT). • Video surveillance of the building o Is the surveillance of certain parts (e.g. corridors) of the building lawful and usual? Surveillance cameras are increasingly used for security purposes in public areas as well as in private dwellings, especially in apartment blocks and housing estates. Generally speaking, protection of privacy and private life is among the constitutional rights of the individual,436 and violation of privacy is an offence against individuals under the Criminal Code.437 However, there is no legal regulation yet on the public use of surveillance cameras such as the requirement of informative notices or restrictions on the storage of the data. Their use by the public authorities is criticised, even in cases where it does not raise any privacy concerns, since it conflicts with the main administrative law principle requiring that all activities and transactions of the administrative organs must have a legal basis. In the absence of specific legislation on surveillance cameras, the main restriction to their use in dwellings is found in the Condominium Law, more specifically in its provisions regarding the maintenance and preservation of the main property. In addition, the provisions on the protection of private life under the Constitution and the Criminal Code apply in cases where the use of cameras violates the privacy. According to the Condominium Law, activities relating to the construction, repair and facilities might be carried out only with the written consent of the four fifth of all apartment owners except certain cases requiring immediate action.438 In a recent ruling, the High 435
Art. 324 TCO. Article 20 of the Constitution provides that “[e]veryone has the right to demand respect for his/her private and family life. Privacy of private or family life shall not be violated. 437
Article 134 of the Criminal Code provides that “(1) Any person who violates secrecy of private life, is punished with imprisonment from six months to two years, or imposed punitive fine. In case of violation of privacy by use of audio-­visual recording devices, the minimum limit of punishment to be imposed may not be less than one year. (2) Any person who discloses audio-­visual recordings relating to private life of individuals are sentenced to imprisonment from one year to three years. In case of commission of this offense through press and broadcast, the punishment is increased by one half.” Translation: http://www.legislationline.org/documents/action/popup/id/6872/preview 438
Art. 19 Condominium Law provides “The owners of the apartment have joint and several liability in preserving the strength, beauty, and architectural design of the main landed estate. One of apartment owners, without written consent of four fifth of all apartment owners, cannot have the construction, repair and facilities, exterior calcimine or painting in different colors works made in the common places of main 436
117 Court of Appeals held that inserting cameras by making holes in the outside walls which are common parts required the consent of the four fifth of owners.439 On the other hand, it is controversial whether cameras might be inserted without making any damage such as holes in the walls. While it is generally accepted that apartment owners may insert cameras on their individual parts such as the balcony, window or entrance door, inserting cameras in the common places of the condominium require the consent of the four fifth of apartment owners. In both cases, however, the viewpoint and recording capabilities of the camera and the storage of the data are important;; surveillance of neighbours or other apartments might constitute a violation of privacy and invoke criminal liability. 6.6 Termination of tenancy contracts Summary Table 13. Termination of tenancy contracts Mutual termination possible Notice by tenant -­ Ordinary termination -­ Extraordinary termination -­ important reasons -­ death of tenant -­ breach of contract (failure to hand over the dwelling, failure to remedy the defects) Notice by landlord -­ Ordinary termination -­ Extraordinary termination -­ important reasons -­ bankruptcy of the tenant -­ breach of contract (tenant in arrears, care and consideration and other obligations) Other reasons for termination -­ Termination by litigation -­ necessity -­ reconstruction and improvement -­ new owner’s need -­ written undertaking -­ two legitimate notices -­ homeowner tenant real estate. However, if it is determined by the court that any defect in common places or facilities will damage main structure or any independent division and it should be fixed or the main structure should be strengthened immediately, said consent of building owners is not necessary to execute this repair or strengthening operation according to its project and technical requirements. Apartment owner, in its own independent division, cannot make any repair, facility or modification operation which may damage main structure. On connected places of independent divisions which are connected to each other by the means of ceiling, ground or wall the repair, facility and modification works which will not damage main structure may be made with the collective consent of owners of this division. Each apartment owner is liable to the other owner(s), depending on the harm he causes to the main landed estate and its other independent parts.” The English translation: http://www.alanyaprestige.com/en/prestige-­residence/turkish-­condominium-­
law.html 439
Y. 18. HD E. 2011/3117 K. 2011/6531 T. 10.5.2011. 118 Lease contracts might be, in general, limited in time or open-­ended. Lease contracts limited in time expire at the end of the agreed duration without any notice.440 Open-­ended lease contracts of indefinite duration may be terminated on notice by either party.441 Besides these provisions on the ordinary termination of lease contracts, the TCO lays down the grounds for extraordinary termination.442 While these provisions, under the first subsection of the fourth section of the TCO, set forth the rules for the termination of the lease contracts in general, the termination of the tenancy contracts for residential and roofed commercial premises is dealt with separately under the second subsection of the fourth section.443 The general provisions on the termination of lease contracts apply to tenancy contracts so long as they do not conflict with the special provisions on residential and roofed commercial premises. For instance, unlike limited in time lease contracts, tenancy contracts for residential and roofed commercial premises do not expire automatically.444 • Mutual termination agreements Parties may terminate the tenancy agreement, regardless of whether it is open-­ended or limited in time, by concluding a mutual termination agreement, according to the general provisions of the TCO on the extinction of obligations. Even in cases where certain formal requirements are prescribed by law or agreed to by the parties, no particular form is required for the mutual termination agreement.445 • Notice by the tenant o Periods and deadlines to be respected Limited in time contracts – ordinary notice The tenant can terminate the limited in time tenancy contract by sending a notice at least fifteen days prior to its expiration. In the absence of a notice by the tenant, the tenancy contract is prolonged for one year.446 The notice should be given in writing;;447 otherwise the tenancy contract can not be terminated at the end of its duration. The above-­mentioned period of ‘at least fifteen days’ is mandatory;; therefore, parties may not agree on a shorter or a longer period of notice. However, contractual clauses providing that the tenant may terminate the contract whenever he or she wants are valid.448 440
Art. 327 TCO. Art. 328 TCO. 442
Art. 331 ff TCO. 443
Arts. 347–356 TCO. 444
Art. 347/I TCO. 445
Art. 132 TCO. 446
Art. 347/1 TCO. 447
Art. 348 TCO. 448
Gümüş, 312. 441
119 Open-­ended contracts – ordinary notice Regarding the termination of open-­ended tenancy contracts, the TCO provides for special provisions that are different from the general provisions on the termination of open-­ended lease contracts.449 According to the special provisions, the tenant, unlike the landlord, may terminate the open-­ended tenancy contract any time he or she wishes to do so by a termination notice in accordance with the legally prescribed notice periods;;450 he or she does not have to give any reason for the termination.451 The notice should be given in writing.452 While the simple written form of notice is sufficient, in practice, parties often give notices via public notaries for purposes of proof.453 Regarding family residences, the tenant partner who is party to the tenancy contract does not have the right to terminate the contract without consent of his or her spouse. The termination notice given by the tenant alone therefore does not cause any consequences.454 The termination of both open-­ended and time-­limited contracts with an ordinary notice given by the tenant ends the tenancy agreement. The tenant does not have to pay any compensation if the notice requirements are fulfilled. o May the tenant terminate the agreement before the agreed date of termination (especially in case of contracts limited in time);; if yes: does the landlord then have a right to compensation (or be allowed to impose sanctions such as penalty payments)? Regardless of its duration, the tenancy agreement may be terminated by the tenant at any time, if the requirements set forth under the general provisions on the extraordinary termination of leases are met.455 Three groups of reasons for extraordinary termination are prescribed as important reasons,456 bankruptcy of the lessee,457 and the death of the lessee.458 The tenancy contract, in these cases, might be terminated by an extraordinary notice given by the tenant (or by his or her heirs in the event of the death of the tenant). Apart from these extraordinary termination possibilities set forth explicitly, it is possible for the tenant to terminate the contract on grounds of breach of the contract which, from the 449
According to the general provisions on the termination of lease contracts, open-­ended lease contracts may be terminated by a termination notice upon the expiry of the time specified in the notice. The parties may agree to specific termination dates and notice periods that are longer than those set by the TCO. The lease contracts regarding the movable and immovable constructions may be terminated according to the local custom;; and if there is no local custom, the notice periods provided under the general provisions on lease contracts should be observed. This notice period is three months before the expiry of any six-­month period (Arts. 328–329 TCO). If the notice period or termination date is not complied with, the termination takes effect for the next period as of the next termination date (Art 328/II TCO). 450
Art. 347/2 TCO. 451
Aydemir, 120. 452
Art. 348 TCO. 453
Gümüş, 316. 454
Aydemir, 170. 455
Arts. 331–333 TCO. 456
Art. 331 TCO 457
Art. 332 TCO. 458
Art. 333 TCO. 120 tenant’s perspective, specifically refers to the landlord’s failure to remedy the defects of the premises.459 Extraordinary termination for important reasons Both the tenant and the landlord may terminate the contract at any time by giving a legally prescribed notice if there are important reasons making the performance of the contract unconscionable.460 It does not matter whether the contract is open-­ended or limited in time;; if the performance of the contract has become unconscionable, parties have the right to terminate it as long as they comply with the notice periods.461 Unconscionable refers to the situation that one or both of the parties can not bear the contract any longer since, for instance, the apartment has been seriously damaged in an earthquake, or the civil servant tenant has been transferred to another city.462 Whether the situation constitutes an unbearable state for either party is evaluated on a case-­by-­
case basis considering the interests of both parties and the principles of good faith and equity.463 In this regard, the party who was at fault in causing the important reason or who was aware of or could foresee the facts at the time of the conclusion of the contract can not terminate the contract on the basis of important reasons.464 In case of extraordinary termination of the tenancy contract by the tenant on grounds of important reasons, the landlord has a right to compensation. The Court determines the financial consequences of the extraordinary termination notice taking due account of all the circumstances.465 The tenant might offer a reasonable compensation where he or she wants to terminate the contract extraordinarily. Whether this offer affects the validity of the termination notice or not is controversial. In one of its judgments, the High Court of Appeals held that if the termination is requested on grounds of unconscionable circumstances, compensation must be offered besides the notice of termination;; otherwise the notice of termination is deemed not given.466 However, it is suggested, in the Turkish legal literature, that this is not applicable if the tenant has no fault. For instance, if the tenant gives an extraordinary notice of termination after an earthquake which has caused considerable damage in the apartment, it would be inappropriate to expect the tenant to offer compensation in order to terminate the contract.467 On the other hand, whereas an excessive increase in the exchange rate might be considered as unconscionable for a tenancy agreement which has specified the rent payment in foreign currency, increase of the rent does not fall into this sphere;; it gives the possibility to file a request for the adaptation of the rent.468 459
Art. 301 TCO. Art. 331 TCO. 461
Aydemir, 138. 462
Ibid, 137. 463
Art. 2 TCC (good faith principle), Art. 4 TCC (discretion of the judge). 464
Gümüş, 268. 465
Art. 331 TCO. 466
Y. 3. HD E. 2000/6318 K. 2000/6680 T. 6.7.2000. 467
Aydemir, 138. 468
Ibid, 139. 460
121 Extraordinary termination in the event of the death of the tenant Death of the lessee is regulated as one of the grounds for extraordinary termination of the lease contracts in general. His or her heirs may terminate the contract by giving the legally prescribed notice expiring on the next admissible termination date.469 The heirs have also the possibility not to terminate the contract and in that case the lease agreement will be preserved with the same rights and obligations for both parties. For residential and roofed commercial premises, the TCO has an additional specific provision. According to that, in the event of the death of the tenant, certain people may continue the tenancy contract as tenant parties so long as they act in accordance with the contract and the law. These people are specified as the people who have resided in the same dwelling together with the deceased tenant, business partners of the deceased tenant who carried out their activities in the same workplace or their heirs pursuing the same profession or arts.470 In practice, sometimes heirs of the tenant are sued on grounds of unlawful occupation. However, if the heirs used to reside in the apartment together with the deceased tenant, they have the right to continue the tenancy agreement;; they can not be considered as unlawful occupiers.471 Termination on grounds of breach of the contract Breach of the tenancy contract by either party gives the other party the right to terminate the contract. The landlord has the contractual duties such as to hand over the dwelling in a condition fit for its designated use and to maintain its condition during the duration of the contract, to remedy the defects, and to bear the compulsory expenses. If he or she fails to fulfil any of his or her contractual duties, the tenant will have the right to terminate the contract. Failure to hand over the dwelling The foremost duty of the landlord in a tenancy agreement is to hand over the dwelling fit for its designated use and to maintain the dwelling it that condition. If, despite the conclusion of a tenancy contract, the landlord does not hand over the dwelling, the tenant has to first send a notice requesting the hand over of the dwelling. In cases where the hand over date of the dwelling was not previously agreed, the notice should include a clause giving the landlord a certain period for handing over the dwelling. If the landlord fails to hand over the dwelling after the notice, the tenant might choose his or her optional right to terminate the contract. In this case, the landlord has to pay the negative damages unless he or she proves that no fault is attributable to his or her failure to hand over the dwelling.472 469
Art. 333 TCO. Art. 356 TCO. 471
Aydemir 141. 472
Ibid, 144. 470
122 Failure to remedy the defects As mentioned previously, the tenant has optional rights in case of important defects that have occurred after the hand over of the dwelling.473 In cases where the defect prevents the tenant from using the dwelling entirely or significantly as agreed in the contract and it is not remedied by the landlord within a given period, the tenant may terminate the contract.474 The landlord should be given reasonable time to remedy the defects and only if the defect persists after the elapse of the given time, the tenant has the right to terminate the contract according to the provisions on optional rights in contracts involving continuous performance.475 If the tenancy contract is terminated because of the important defects, the tenant may claim for damages resulting from the early termination.476 o Are there preconditions such as proposing another tenant to the landlord? As far as the tenant complies with the termination notices and periods, there are no preconditions such as proposing another tenant. However, if the tenant returns the dwelling without complying with the requirements of the contract duration or the notice periods for termination, his or her obligations deriving from the tenancy contract continue for a reasonable period that makes it possible for the landlord to rent the apartment with similar terms and conditions. Yet, the tenant might be released from the obligations if he or she proposes a new tenant who is acceptable to the landlord, solvent and willing to take on the rental agreement. The landlord has to deduct from the rent the expenses he or she has saved and any earnings he or she has obtained, or intentionally failed to obtain by making use of the apartment in other ways.477 • Notice by the landlord o Ordinary vs. extraordinary notice in open-­ended or time-­limited contracts;; definition of ordinary vs. extraordinary (generally available in cases of massive rent arrears or strong antisocial behaviour) Ordinary notice of termination Open-­ended contracts Landlords may terminate open-­ended tenancy contracts by giving a termination notice in accordance with general provisions after the elapse of ten years from the conclusion of the contract.478 The termination notice must be in writing and must be given three months prior to the end of a six-­month period. The landlord does not have to give any reason for the termination after ten years;; so long as he or she complies with the formal requirements, notice periods and deadlines, the contract will be terminated. 473
Arts. 305–308 TCO. Art. 306 TCO. 475
Art. 126 TCO. 476
Aydemir, 144. 477
Art. 325 TCO. 478
Art. 347/2 TCO. 474
123 Time-­limited contracts In principle, unlike the tenant, the landlord can not terminate a time-­limited tenancy contract by sending a notice fifteen days prior to its expiration. However, in cases where the tenancy agreement has been prolonged already for ten years, the landlord can terminate the contract by sending a notice at least three months prior to the expiration of each rental period. The landlord is not required to give any reasons for the termination in this case.479 For instance, a tenancy contract signed in 1.1.2014 can be prolonged until 31.12.2024 in its normal course. The landlord may terminate the contract earliest effective from 31.12.2025 by sending a notice latest by 30.9.2025. The notice should be in writing, otherwise it is not valid.480 The termination of both open-­ended and time-­limited contracts with an ordinary notice by the landlord ends the tenancy agreement. The landlord does not have to pay any compensation if all the requirements are fulfilled. In case of a dispute on the fulfilment of the conditions and the formal criteria for termination or in case the tenant refuses to return the dwelling, the landlord may start legal proceedings against the tenant. The landlord’s right to terminate the time-­limited contract by notice after ten years is one of those provisions whose application has been postponed by the Enforcement and Implementation Law. In the case of contracts concluded before the entry into force of the TCO, the postponement will be applicable: -­ five years after the entry into force of the TCO for the tenancy contracts which have been prolonged for more than five years and less than ten years, -­ two years after the entry into force of the TCO for the tenancy contracts which have been prolonged for ten or more years. Consequently, the landlord may not exercise his or her right to termination by notice designated under Article 347/I until the end of just-­mentioned periods.481 Extraordinary notice of termination According to the general provisions on lease contracts, the lessor has the possibility to terminate the lease contract by extraordinary notice, if the conditions are met, in cases of important reasons,482 bankruptcy of the lessee,483 and death of the lessee.484 Besides these provisions (under the subtitle ‘extraordinary notice’), the TCO specifies the termination on grounds of the lessee in arrears485 and termination on grounds of breach of the contract.486 Apart from those, the specific subsection of the TCO for the tenancy regarding residential and roofed commercial premises sets forth a number of termination possibilities under the heading ‘termination by litigation’. These are again formulated in 479
Art. 347/ I TCO. Art. 348 TCO. 481
Gümüş, 313. 482
Art. 331 TCO. 483
Art. 332 TCO. 484
Art. 333 TCO. 485
Art. 315 TCO. 486
Art. 316 TCO. 480
124 two groups as ‘due to reasons caused by the landlord’ and ‘due to reasons caused by the tenant’. Necessity, reconstruction and build up487 and the requirement by the new owner488 are the reasons caused by the landlord. Written undertaking,489 two legitimate notices,490 and home ownership of the tenant491 are the reasons caused by the tenant. All these reasons, whether caused by the landlord or the tenant, give the landlord the right to terminate the tenancy contract on certain conditions specified for each. These are explained below. Important reasons The landlord may terminate the contract (whether open-­ended or time-­limited,) for important reasons that have made the performance of the contract unconscionable provided that he or she gives the legally prescribed notice.492 (For general information on the termination of the contract for important reasons, see above: notice by the tenant – extraordinary termination for important reasons). Important reasons might derive from both external factors such as war or economic crisis with a severe social effect and from personal circumstances of the landlord such as serious disease or unforeseeable changes in his or her economic conditions that require him or her use the dwelling for own needs. Revelation of the tenant’s unexpected personal involvements or tendencies such as being a member of a terrorist organisation or being sexually perverted is also accepted as an important reason for the extraordinary termination by the landlord.493 The landlord may terminate the tenancy contract, be it limited in time or open-­ended, at any time, as long as he or she complies with the notice periods and deadlines. Bankruptcy of the tenant The bankruptcy of the tenant might give the landlord the right to terminate the tenancy contract extraordinarily on certain conditions. If the contract is concluded after the bankruptcy, the landlord can terminate it only on grounds of arrears, if applicable. The extraordinary termination of the tenancy contract due to the bankruptcy of the tenant is only possible if the bankruptcy takes place after the conclusion of the contract. If the tenant becomes bankrupt after taking possession of the property, the landlord may call for security for future rent payments. For the security, the landlord has to give the tenant and the bankrupt’s estate an appropriate time limit. The contract continues upon furnishing the requested security. If no security is provided to the landlord within the given period, the landlord may terminate the contract with a notice that takes immediate effect.494 In this case, the landlord does not have to comply with the termination deadlines and periods. However, he or she has to give a notice to terminate the contract;; the contract does not terminate automatically. 487
Art. 350 TCO. Art. 351 TCO. 489
Art. 352/1 TCO. 490
Art. 352/II TCO. 491
Art. 352/III TCO. 492
Art. 331 TCO. 493
Gümüş, 270–271. 494
Art. 332 TCO. 488
125 The security might be called only for the future rent payments;; unlike in the previous Code of Obligations, unpaid rent does not fall in the scope of the provision regarding the bankruptcy of the tenant.495 Breach of the contract -­ tenant in arrears If the tenant does not pay the agreed amount of the rent or the accessory charges on the agreed date, the landlord may terminate the contract after taking the steps stipulated in the TCO. Besides the main rent agreed in the contract and the accessory charges, the tenant should pay lawfully increased amount of the rent in order to avoid falling into arrears. On the other hand, the failure of the tenant to pay the tax withholding (which has to be paid by the tenant only in tenancies for roofed commercial premises), does not cause rent arrears.496 The payment should be made in full amount;; partial payment of the rent does not prevent the tenant from falling into arrears. If the day of payment is not specified, general provisions apply: the lessor must first send a notice to the lessee and give him or her a certain period.497 Specific provisions on the lease contracts with an agreed day of payment require, on the other hand, that the lessor should meet the two requirements below in order to terminate the contract: -­ First, the lessor should have not been paid the rent or the accessory charges that have become due. -­ Second, the lessor must notify the lessee. The notification should be in simple written form, not necessarily official. The lessee should be given a time limit to pay the unpaid amount and should be notified explicitly that the lease agreement will be terminated at the end of the given time limit if he or she fails to pay the rent.498 This period given to the lessee should be at least thirty days for the tenancy contracts for residential and roofed commercial premises (for other leases, it should be at least ten days) and begins on the following day of the written notice.499 The judicial practice requires that the time limit given to the tenant should be in the form of the number of days;; if it is specified basing on the number of months (for example, ‘one month’ instead of ‘thirty days’) the notice for termination will not be valid.500 Unlike the previous Code of Obligations, the lease agreement does not terminate automatically in the event of non-­payment. If the rent and/or the accessory charges are paid within the time limit given to the tenant, the landlord does not have the right to terminate the tenancy agreement basing on the rent arrears. If the payment is done after the thirty-­day period, the landlord may terminate the contract despite the payment.501 On 495
Gümüş, 292. Aydemir, 158. 497
Art. 123 TCO. 498
Art. 315/1 TCO. The High Court held that the termination notice based on the rent arrears must include the warning that eviction case or termination case will be filed in the event of non-­payment of the rent within thirty days. Solely giving the tenant a notice requesting him or her to pay the rent and accessory charges within thirty days is not sufficient. Y. 6. HD E. 2001/857 K. 2001/1012 T. 12.2.2001. 499
Art. 315/2 TCO. 500
Aydemir, 153. 501
Y. 6. HD E. 2002/1293 K. 2002/1563 T. 11.3.2002 496
126 the other hand, if the landlord decides to start legal proceedings basing on the rent arrears, he or she must do so within reasonable time. An eviction request against the tenant on grounds of rent arrears long time after the tenant’s failure to pay the rent within the time limit set by the notification would be against the principles of good faith and equity and thus the case would be dismissed.502 Under the previous Code of Obligations, contractual clauses on the maturity of the rent for the entire rental period in case of arrears were valid, as the Code did not have any explicit prohibitions thereupon. These acceleration clauses allowed the landlord to give a notice to the tenant requesting the payment of the remaining rents if he or she failed to pay the rent and accessory charges on time. For instance, if the tenant did not pay the rent on time at the third month of the tenancy agreement, the rent for the remaining nine months would become due upon a notice by the landlord and if all the new amount is not paid despite the notice, it would grant the landlord the right to terminate the contract on grounds of rent arrears. The new TCO prohibits explicitly such clauses for residential and roofed commercial premises. According to the special provisions on the tenancy contracts regarding residential and roofed commercial premises, the tenant may not be imposed an obligation to make any other payments than the rent and the accessory charges. Clauses on the payment of penalties in case of non-­payment of the rent or maturity of remaining rents in case of unpaid rent (acceleration clauses) are particularly invalid.503 In a recent decision, the High Court of Appeals held that the acceleration clauses in tenancy contracts are void according to the new TCO. Furthermore, the provisions of the TCO on default and maturity are related with the public order and thus applicable also to tenancy contracts that were concluded before the entry into force of the TCO.504 Breach of the contract – care and consideration and other obligations The tenant has to use the dwelling in accordance with the contract with all due care and has to show due respect for others who live in the same building and for neighbours.505 If the tenant acts contrary to any of these duties, the landlord may terminate the contract by giving a notice to the tenant. The notice should be in writing. It should give the tenant a period of at least thirty days to end the breach of his or her duties and state that the contract would otherwise be terminated. Whereas the thirty-­day period is a mandatory requirement for the termination of the tenancy contracts for residential and roofed commercial premises, the other types of lease agreements may be terminated with immediate effect.506 Exceptionally, tenancy contracts for residential and roofed commercial premises may also be terminated immediately in cases where the tenant intentionally causes serious damage to the property, where it becomes clear that giving a time limit would be ineffective or where the breach of the tenant’s duty becomes unconscionable for the landlord, for the other persons living in the same building or for the neighbours.507 502
Aydemir, 154. Art. 346 TCO. The TCO overrules the previous judicial practice and a number of decisions of the High Court of Appeals. Aydemir, 159–160. 504
Y. 6. HD E. 2013/691 K. 2013/3827 T. 5.3.2013. 505
Art. 316/I. 506
Art. 316/2 TCO. 507
Art. 316/3 TCO. 503
127 A clear breach of due care and consideration duty of the tenant is the case of causing damage to the apartment or the condominium wilfully such as setting fire in the parking area after a dispute with the landlord. The landlord may terminate the contract only if the tenant causes the damage on purpose;; in the absence of wrongful intention the landlord can not base on the breach of care and consideration duty to terminate the contract.508 The landlord would not be expected to continue the tenancy agreement any longer if the acts of the tenant and his or her co-­habitors become objectively unconscionable for the landlord or other persons sharing the building or neighbours. For instance, closing the balcony with glass windows would not qualify for unconscionable situation, whereas repeated severe fights of the tenant with his or her spouse causing severe disturbance and resulting in police intervention give the landlord the right to terminate the contract on grounds of the breach of care and due consideration duties of the tenant.509 The unconscionable situation here differs from the aforementioned unconscionable situation which makes it possible to terminate the contract for important reasons.510 In that case, the important reasons do not directly relate to the breach of the contract, but rather result from the condition of the property or the changes in the situation of the parties in such a way that the tenancy agreement becomes unbearable. On the contrary, for the termination on grounds of the breach of due care and due consideration duties of the tenant, the tenant’s very behaviour must become unbearable. For instance, the use of the apartment for prostitution or the tenant’s extreme alcohol consumption resulting in picking fight in the building frequently are considered as unbearable behaviours for the persons sharing the building or neighbours.511 Likewise, in the event of the failure of the tenant to use the premises in accordance with the tenancy contract in general, such as converting the residential apartment to business place without the landlord’s consent, the landlord has the right to terminate the contract. Besides the duty of care and consideration, the tenant has other contractual obligations regarding the use of the dwelling, such as the purpose of its use. If the tenant fails to fulfil his or her contractual obligation to use the dwelling for the purpose specified in the tenancy contract, the landlord has the right to terminate the contract. The use of the residential dwelling for commercial purposes or the use of the dwelling for other commercial fields than those specified in the contract (for instance, jewellery store as a restaurant, hair styling saloon as a dry cleaning shop) illustrates the breach of contract in this regard.512 Termination by litigation As mentioned previously, the TCO sets forth the possibility of termination of the tenancy contracts by litigation on several grounds.513 These grounds of action, explained below, may not be customized by contract to the detriment of the tenant;;514 landlords may not file 508
Aydemir, 145. Gümüş, 298. 510
Art. 331 TCO. 511
Aydemir, 146. 512
Ibid, 147. 513
Arts. 350–352 TCO. 514
Art. 354 TCO. 509
128 a claim to terminate the tenancy contract on other grounds than those specified under the TCO. Necessity The landlord may terminate the contract by litigation if a genuinely imperative necessity arises to use the rented dwelling for: -­ his or her own need, -­ the need of his or her spouse, -­ the need of his or her descendants or lineal ancestors, -­ the need of those who he or she is legally obligated to support.515 Termination for necessity is only possible when the necessity is imperative and genuine. It is quite common in Turkey that the landlords base on fake situations created by them to terminate the tenancy contract due to necessity. Therefore, it is important that the Court inquire whether the necessity is imperative and genuine by considering the specific circumstances of each particular case. For instance, whereas the need of the landlord to allocate the dwelling to his or her child who is getting married is usually found genuine, engagement of the child does not qualify as imperative and genuine unless there is solid evidence about the prospective marriage.516 On the other hand, it is usually more acceptable that the landlord allocated the dwelling to his or her adult child who wishes to live in a separate place.517 In judicial practice, usually witnesses of both parties are heard as it is difficult to prove the situation in writing. The transfer of the ownership gives the new owner the possibility to claim necessity only if the new apartment is of higher quality than the one where he or she is residing518 or if there is a strong possibility of eviction for the new owner who lives in a rented dwelling. If the two apartments are of equivalent value, the protection of the tenant is preferred.519 Termination of the tenancy contract on grounds of necessity is only possible by litigation;; termination by notice is not possible. In order to terminate the contract in these cases, the landlord must file a claim. In tenancy contracts limited in time, the claim should be filed within one month after the elapse of the time;; in open-­ended tenancy contracts, the claim should be filed within one month after the termination notice and period which are determined in line with the general provisions on lease. If the termination notice is given before these periods, it is possible to file a claim until the end of the new rental period.520 Necessity might be claimed by the landlord even if the landlord is not the owner of the dwelling. The owner who is not a party to the tenancy contract may also request the termination basing on necessity (for himself or herself or his or her close relatives and 515
Art. 350/1 TCO. Y. HGK E. 1982/6-­863 K. 1984/1049 T. 12.12.1984 517
Sole engagement may not be a reason for eviction based on necessity. Since adulthood and the wish to be autonomous have not been alleged, eviction is not possible merely on the basis of engagement. Y. 6. HD E. 1996/4630 K. 1996/4784 T. 20.5.1996. 518
Y. 6. HD E. 2001/9644 K. 2001/9744 T. 24.12.2001. 519
Y. 6. HD E. 1999/5750 K. 1999/5784 T. 28.6.1999. Aydemir, 174. 520
Ibid, 178. 516
129 dependents listed just above). Legal entities, as owners or landlords of the dwelling, have also the possibility to terminate the tenancy contract due to necessity.521 The TCO includes a limitation on the use of the dwelling after the eviction on grounds of necessity. In these cases, the landlord may not rent the dwelling to anyone else than the previous tenant (who was evicted) for the next three years without just cause. The death or the relocation of the close relative for whom necessity was claimed is considered as just cause for renting the dwelling again. If the landlord violates the prohibition on the re-­
renting of the dwelling, he or she has to pay to the previous tenant compensation not less than the rent of the last one-­year rental period.522 Reconstruction and improvement Landlords have the possibility to terminate the tenancy contract by litigation due to certain reconstruction and improvement works. If an essential repair, enlargement or the modification of the dwelling is required for its reconstruction or improvement and the use of the dwelling during these works is impossible, the landlord may terminate the contract by filing a claim within the legally prescribed periods.523 For limited in time contracts, this period is one month after the elapse of the time;; and for open-­ended contracts, this period is one month after the termination of notice deadlines and periods set by the general provisions on lease. The TCO makes a distinction between the regular repairs and the essential repairs within the sphere of the above provision. The scope of the repair referred to as ‘essential repair’ for the termination on grounds of reconstruction and repair is much larger than the ordinary or important repairs. In this regard, repairs requiring the evacuation of the dwelling in order to be carried out are considered as essential repairs.524 Enlargement and modification of an apartment such as demolishing the building and reconstructing it or adding a storey to the building are accepted as grounds for termination since they make it impossible to live in the building during the period the necessary work is carried out.525 In order to file a claim to terminate the tenancy contract on grounds of reconstruction and improvement, it should be proven that it is impossible to reside in the dwelling during the construction activities, and the certified projects should be submitted to the court. The court evaluates the particular case taking into account the expert reports. If it is found that it is not possible to reside in the building, the court decides in favour of the termination of the contract and the eviction of the tenant. Where the reconstruction or the improvement of the dwelling is required but it can be carried out without the termination of the contract, it is possible to request the court a temporary eviction. In case of temporary eviction the tenancy contract remains valid.526 The TCO includes two prohibitions concerning the re-­renting of the dwelling from which the tenant has been evicted on grounds of reconstruction and improvement: 521
Ibid, 179–180. Art. 355 TCO. 523
Art. 350 TCO. 524
Aydemir, 184. 525
Ibid, 184, 526
The tenancy agreement continues in case of temporary eviction. Y. HGK E. 1989/6-­362 K. 1989/551 T. 25.10.1989 522
130 -­ If none of the activities of reconstruction and improvement despite the termination on those grounds were done, the dwelling may not be rented out during the following three years except for the existence of a just cause.527 -­ After the reconstruction and improvement, the tenant (who was evicted) has a right of preference to rent the renovated and reconstructed dwelling at its new condition and new rent;; he or she has to rent the dwelling within one month after the notice given by the landlord. The dwelling may not be rented to someone else for the next three years unless this right of preference is exhausted.528 As in the case of termination due to necessity, if the landlord does not act in accordance with the prohibition of re-­renting, he or she has to pay compensation to the tenant. The compensation should not be less than the rent of the last one-­year period. New owner’s need In cases where the ownership of a dwelling is transferred to a third person in the course of the tenancy contract, the new owner has the possibility to terminate the contract by litigation if he or she meets the conditions explained below. In these cases, the type of the transfer of the ownership does not matter: whether the change of ownership results from purchase, exchange, donation, dispossession, etc. does not affect the possibility to terminate the contract. The change of ownership is not alone sufficient to terminate the contract. The new owner has to claim an urgent need of the dwelling for himself or herself, his or her spouse, descendants or lineal ancestors, or those who he or she is legally obligated to support. The need should be imperative and genuine. Furthermore, the new owner has to file a claim within the legally prescribed periods. The new owner has two options to terminate the contract: either, as the new owner, by complying with the specific procedural requirements prescribed under the specific provision of the TCO,529 or;; as the successor of the (previous) landlord, by complying with the legal and contractual periods applicable to the tenancy agreement. 1) If the new owner wants to terminate the contract according to the specific procedure, he or she might do so by following the requirements below: -­ First, the new owner must notify the tenant about his or her urgent need and that he or she wants to terminate the contract. The notification must be in writing and the tenant must receive it within one month after the transfer of the ownership. -­ Second, six months after the transfer of the ownership, the new owner must file a claim to terminate the contract. Any claims filed before six months will be rejected by the court. On the other hand, the claim may be filed until the end of the rent period, if the notification is made on time (i.e. within one month). 2) The new owner may also terminate the tenancy contract according to the contractual terms and periods since he or she becomes the successor of the landlord after the transfer of the ownership. In this case, the new owner must request the termination of the contract 527
Art. 355 TCO. Art. 355 TCO. 529
Art. 351 TCO. 528
131 and the eviction of the tenant by a lawsuit brought within one month following the end of the rent period. These two possibilities are utterly optional;; the new owner may choose to follow either of them –whichever serves his or her interests better.530 For instance, if the tenancy contract between the previous owner and the tenant was signed on 20.01.2010 and the dwelling was sold to the new owner on 10.12.2012, the new owner would possibly prefer taking action on the basis of the contractual period (20.01.2013) to waiting six months (until 10.06.2013) to file a claim.531 In cases where a landlord who is not the owner of the rented dwelling acquires the dwelling and becomes the new owner, it should be possible for him or her to file a claim to terminate the tenancy contract on the basis of his or her need after the transfer of ownership. However, contrary decisions by the High Court of Appeals exist.532 The prohibition on the re-­rental of the dwelling for the next years and the compensation in case of its violation,533 explained right above (termination due to reconstruction and improvement) is also applicable here. Written undertaking The tenant, after the handover of the dwelling, may undertake in writing to return the dwelling on a specific date. If the tenant does not return the dwelling on time, despite his or her written undertaking, the landlord may terminate the tenancy contract by either filing a claim or commencing execution proceedings within one month from the specified date of return.534 The undertaking by the tenant is valid only if the conditions below are met: -­ It should be in written form. In case of a multiplicity of tenants, the written undertaking should be signed by all of the tenants. -­ The content of the undertaking and the return date of the dwelling should be clear and distinct, and it should not cause any doubts. In case of sub-­tenancy, the undertaking by the first tenant is binding for the sub-­tenant. Filing a claim against the first tenant suffices for the termination;; the absence of the claim against the sub-­tenant does not matter.535 The tenant’s free will while signing an undertaking is often constrained or hindered. Indeed, it is not uncommon in practice that landlords request from the tenant a written undertaking at the time of the conclusion of the contract and tenants have to sign such documents under pressure. The tenant may, in such cases, claim nullity or invalidity of 530
The person who acquires an immovable property may file a claim, basing on need, either at the end of six months with a prior notice sent within one month, or at the end of the period agreed in the contract with the previous owner. Y. 6. HD E. 2006/4202 K. 2006/6329 T. 5.6.2006. 531
Aydemir, 191–192. 532
In one of its judgments the High Court held that only a person except the landlord may file a claim basing on acquisition and need, and if the new owner is the landlord in the tenancy contract, he or she may not file a claim (Y. 6. HD E. 1996/11327 K. 1996/11586 T. 16.12.1996). 533
Art. 355 TCO. 534
Art. 352/I TCO. 535
Y. 6. HD E. 1986/3844 K. 1986/5305 T. 15.4.1986. 132 the written undertaking due to his or her defective intention;; he or she has to prove that the document was signed under pressure.536 If the tenant does not return the dwelling although he or she has undertaken in writing to return it, the landlord has the possibility to terminate the tenancy contract by taking action within one month in one of the two following optional ways: -­ The landlord may request the eviction by commencing the execution proceedings with a notice prepared by the public notary. As the proceedings halt upon an objection by the tenant;; in such case, the landlord should pass his or her request to the enforcement court. -­ The landlord may directly file a lawsuit at the authorised court requesting the eviction of the tenant basing on his or her written undertaking. If no action is taken by the landlord within one month from the date specified in the undertaking, the undertaking becomes void and the tenancy agreement continues. It is possible that a person other than the tenant undertakes the return of the dwelling. In this case, the undertaking invokes the responsibility of the person who has signed it.537 This responsibility is, however, limited to paying the damages in case the tenant does not return the dwelling.538 Two legitimate notices If the tenant fails to pay the rent on time twice within one rental year or within the rental period where the contract is concluded for a duration of less than one year, the landlord has the possibility to terminate the tenancy contract on certain conditions that are legally specified.539 A distinction is made in this case according to the term of the contract: For tenancy contracts with a period of less than one year, the landlord has the possibility to terminate the contract by litigation, if he or she has given two legitimate notices to the tenant who failed to pay the rent on time. The notice should be in writing and should be related to unpaid rents for two different periods. In order to terminate the contract because of two legitimate notices for unpaid rents, the landlord must file a lawsuit within one month starting from the end of the rental period. For instance, regarding a tenancy contract for ten months with the tenancy starting on the date of 10.08.2013, the landlord must file a lawsuit within one month after 10.06.2014. For the tenancy contracts with a period of one year or more than one year, the landlord has the possibility to terminate the contract by litigation, if he or she has given two legitimate notices for the unpaid rents within one rental year or the period exceeding the rental years. In both cases, the landlord may terminate the tenancy contract by filing a lawsuit within one month starting from the end of the rental year in which the notices were given. Again, a distinction is made in the rather confusing provision: If the tenancy contract is for one year and the tenant has been given notice twice as he or she has failed to pay the rent in one rental year, the landlord may terminate the contract by filing a lawsuit within one month, starting from the end of the rental year. The two notices should be in writing 536
Aydemir, 197. Art. 128 TCO (undertaking the action of another person). 538
Aydemir, 201. 539
Art. 352/II TCO. 537
133 and should be related to the unpaid rents for different periods. On the other hand, if the tenancy contract is for more than one year, whether the two legitimate notices should relate to the unpaid rents within one rental year or within several rental years is not clear. Under the repealed Law Concerning the Lease of Real Estate (GKHK), the entire rental period was taken into consideration;; the two legitimate notices could be relating to the unpaid rents in more than one rental year. The relevant provision of the TCO is linguistically not clear. The phrase “if the tenant has caused two legitimate notices by not paying the rent in one rental year or in the period exceeding one rental year” (AT) seems to mean that the unpaid rents need not be within one year. However, the provision should be read as follows: the two notices should be made either within one rental year or within the remaining duration of the tenancy contract which is less than one rental year. For instance, regarding a tenancy contract for twenty-­two months, the two notices should be made either within the two rental periods of twelve months or within the third period of the remaining ten months. This explicit provision overrules the previous judiciary practice which did not allow the termination on grounds of two legitimate notices given in a period less than one year, whether it be a contract with a term of less than a year or with a longer duration.540 Furthermore, the phrase of the provision specifying the period to file a claim as “one month starting from the rental year in which the notices were given” (AT) also shows that the two legitimate notices should be relating to the unpaid rent in one rental year and not the entire rental period.541 The two legitimate notices should have been received by the tenant before the payments were made. If the landlord sends a notice, but the tenant pays the rent before he or she receives it, the landlord may not terminate the contract within the scope of the possibility of termination because of two legitimate notices.542 In cases where the tenant pays the rent after he or she receives the notices, termination due to two legitimate notices is possible.543 If the delay in rent arises from the banking transactions, it is not accepted as a ground for a legitimate notice.544 Only the landlord has the right to terminate the contract basing on two legitimate notices. The owner of the property, if else from the landlord, does not have the same right unless he or she has given a notice to the tenant requesting the rent payments to himself or herself instead of the landlord from then on and the two legitimate notices for unpaid rents were given only after then.545 If the dwelling is sold after two legitimate notices, neither the previous owner nor the new owner has the possibility to file a claim to terminate the tenancy basing on two legitimate notices.546 540
Gümüş, 334–335. Aydemir, 203 542
Y. 6. HD E. 1983/11163 K. 1983/11247 T. 15.11.1983, Y. 6. HD E. 1983/13192 K. 1983/13303 T. 23.12.1983, Y. 6. HD E. 2000/10102 K. 2000/10334 T. 4.12.2000. 543
Aydemir, 205. 544
The notices given after the payment of the rent in a bank but before it was transferred to the specified account can not form a basis for two legitimate notices. Y. 6. HD E. 1992/11622 K. 1992/12275 T. 2.11.1992 545
Y. 6. HD E. 1996/11998 K. 1997/114 T. 20.1.1997 546
Y. HGK E. 1984/6-­147 K. 1985/794 T. 9.10.1985 541
134 Homeowner tenant If the tenant or tenant’s spouse with whom the tenant lives owns a convenient residential dwelling within the same district or municipal boundaries, the landlord has the possibility to terminate the contract if he or she had no knowledge thereof at the time of the conclusion of the contract. In order to terminate the contract on these grounds, the landlord has to file a claim within one month starting from the end of the contract.547 Following conditions have to be met: -­ First, the dwellings owned by the tenant (or his or her spouse) and resided by the tenant (and his or her spouse) must be located within the same district or municipal boundaries. The landlord does not have the possibility to terminate the contract within this sphere, if the dwellings are located within different districts of the same municipality, for instance one in Urla (İzmir) and the other in Karşıyaka (İzmir). -­ Second, the real estate owned by the tenant (or his or her co-­habitor spouse) must be a residential dwelling which is suitable for his or her habitation. This possibility is provided only for residential tenancies and only if both of the dwellings are used for residential purposes. Suitability for habitation should be considered according to particular circumstances. For instance, it would not be suitable for a handicapped tenant to reside in his or her own apartment which is at the third floor of a building without a lift whereas the apartment which he or she rented has a lift or is located at the ground floor.548 Several factors such as the condition of the building, social status of the tenant and the number of his or her children who live in the same dwelling should be taken into consideration for the suitability criterion.549 -­ Third, the landlord must have no knowledge of the dwelling owned by the tenant at the time of the conclusion of the contract. Termination of the contract despite such knowledge at the beginning violates the principle of good faith. 550 If all the above conditions are met, the landlord has the possibility to terminate the contract as long as he or she files a claim within one month starting from the end of the contract. The owner, if else from the landlord, may not terminate the contract on these grounds.551 Special provisions on family residence The Turkish Civil Code does not allow the termination of the tenancy contract regarding a family residence by a spouse unless the express consent of the other spouse is provided;; the spouse has, nevertheless, the possibility to request the judge the permission to terminate the contract despite the absence of the other spouse’s consent.552 In the same vein, the TCO seeks the accord of both spouses to terminate the tenancy contract;; the tenant spouse is not allowed to terminate the tenancy contract regarding the family residence without the express consent of his or her spouse.553 This involves the tenancy contracts where only one spouse is party to the contract;; in cases where both spouses 547
Art. 352/3 TCO. Aydemir, 209. 549
Ibid, 210. 550
Ibid, 211. 551
Ibid. 552
Art. 194 TCC. 553
Art. 349/1 TCO. 548
135 are party to the contract as tenants, only both of them may terminate the contract without the need to invoke the special provision about the family residence. If it is not possible to obtain the consent of his or her spouse or if the spouse avoids giving his or her consent unreasonably, the tenant may request the judge to resolve the issue.554 The judge decides whether the avoidance of the spouse bases on just grounds taking into account particular circumstances. In the absence of a finding in favour of the avoiding spouse, the avoiding spouse is deemed to have given consent to the termination.555 It is possible for the non-­tenant spouse to become a party to the tenancy contract by notifying the landlord about his or her status as the spouse of the tenant and about the use of the dwelling as a family residence. If the non-­tenant spouse becomes a party to the tenancy contract by giving a notice to the landlord, the landlord has to give the termination notice and relevant information on the payment period both to the tenant and his or her spouse separately.556 In the absence of a notification by the non-­tenant spouse to become a party to the tenancy contract, the landlord does not have to send the termination notice to the non-­tenant spouse;; the notification of the tenant suffices. o Statutory restrictions on notice: § for specific types of dwellings, e.g. public dwellings;; rental dwellings recently converted into condominiums (if there exists a special form of protection in this case as in German law) etc. The Turkish legislation does not include any statutory restrictions on notice. Provisions of the TCO on tenancy apply to all residential dwellings except lojmans, public dwellings allocated to public employees either free or against a rent that is usually under the market values (see Regulatory types of tenures with a public task in 4.3). Lojmans are regulated by a specific law and are subject to different rules and procedures. Public employees have to return the dwellings within specific periods for each type of lojman. These periods prescribed by the Public Dwellings Code are as follows: Public employees residing in -­ dwellings allocated based on specific authority and ranks, -­ dwellings allocated based on the occupation, and -­ dwellings allocated based on service have to return the dwelling within two months after the termination of the relevant duty.557 Public employees residing in dwellings allocated based on priority scoring system have to return the dwelling in fifteen days after the elapse of five-­year residence period. Public employees who have been allowed to reside in this type of lojman longer than five years due to the absence of other beneficiaries have to return the dwelling within one month upon the termination notice given by the public authority. 554
Art. 349/2 TCO. Aydemir, 213. 556
Art. 349/3 TCO. 557
Art 7(a) Public Dwellings Code. 555
136 Public employees, who retire, resign or are transferred to another place, or whose title is removed for whatsoever reason have to return the dwelling within two months from the date of discharge.558 The Law sets forth rules for specific cases such as the death of the public employee, temporary assignments, etc, which are not explained further in the present report. In cases where public employees residing in lojmans do not return the dwelling within the periods mentioned above, the relevant public authority which has allocated the lojman, informs relevant civil or military authorities. Upon this filing, the public employee is evicted from the dwelling within one week by the police force without the need to give any further notice to the public employee.559 § in favour of certain tenants (old, ill, in risk of homelessness) § for certain periods No statutory restrictions on notice exist in favour of any certain tenants or for certain periods. § after sale including public auction (“emptio non tollit locatum”), or inheritance of the dwelling If the rented dwelling is sold or its ownership is transferred to another person through other ways, the new owner has a right to terminate the tenancy contract by litigation if he or she meets the legally prescribed conditions. o Requirement of giving valid reasons for notice: admissible reasons The reasons for extraordinary termination are specified in the TCO and the parties must comply with those reasons for the termination of the tenancy contracts. In some of the provisions pointing out just cause or valid grounds, the specific circumstances are taken into consideration to decide whether the reasons put forward by one party is admissible or not. o Objections by the tenant There is no specific regulation on objections by the tenant to the notice of termination. The landlord is anyway required to file a claim in many cases, or commence execution proceedings at the enforcement authorities. The tenant may then challenge the notice of termination on the basis of the principle of good faith or procedural incompliance as explained in the next section. o Does the tenancy have “prolongation rights”, i.e. the statutory right to stay for an additional period of time (outside the execution procedure)? There are no statutory prolongation rights giving the tenant any possibility to stay in the rented dwelling for an additional period. 558
Art 7(b) Public Dwellings Code. Art 8/I Public Dwellings Code. 559
137 • Challenging the notice before court (or similar bodies) The tenant has the right to challenge the notice on grounds of its nullity or invalidity. However, in practice, the tenant would usually oppose the landlord’s claims only after these are filed to the enforcement authority or the court. o In particular claims for extension of the contract or for granting of a period of grace under substantive or procedural law The Turkish tenancy law does not provide for specific claims for extension of the contract or for granting of a period of grace. • Termination for other reasons o Termination as a result of execution proceedings against the landlord (in particular: repossession for default of mortgage payment) Termination of the tenancy contract as a result of execution proceedings against the landlord is possible in cases where the new owner proves an urgent need for himself or herself, or affiliated persons listed in the TCO. The provisions of the TCO on the change of ownership are applicable to the dispossession of the dwelling in debt collection or bankruptcy proceedings. On the other hand, in cases where the tenant fails to prove the tenancy agreement with an official document, he or she might be compelled to return the dwelling in fifteen days. o Termination as a result of urban renewal or expropriation of the landlord, in particular: § What are the rights of tenants in urban renewal? In particular: What are the rules for rehousing in case of demolition of rental dwellings? Are tenants interested parties in public decision-­making on real estate in case of urban renewal? Expropriation Expropriation is the only exception to the rule that the new owner becomes the landlord party to the tenancy contract;; the provisions regarding the change of ownership are not applicable.560 Indeed, expropriation does not, by its very nature, allow the continuation of the tenancy agreement. When a leased immovable is expropriated, the performance of the landlord’s obligation becomes objectively impossible, and thus the tenancy agreement lapses.561 It is, though, generally accepted that the tenant may request compensation, if the landlord already had the knowledge of expropriation and did not inform the tenant. 560
Art. 310 TCO. Art. 136 TCO. 561
138 In cases where only a part of the dwelling is subject to expropriation and the tenant may still reside in the dwelling despite the partial expropriation, the tenancy contract does not lapse;; the tenant, in that case, might request a proportional reduction of the rent. A specific code, Expropriation Code No. 2942, applies to the expropriation of the landlord. According to that, the tenant or any other person residing in the dwelling, is given a notice to return the dwelling within fifteen days and if the dwelling is not returned within fifteen days, he or she is evicted by the enforcement authority.562 Urban renewal Under the Law Concerning the Restructuring of Areas under Risk of Natural Disasters, tenants do not have the right to apply for the risk assessment of the dwelling or to appeal against the decision on the risk assessment. In cases where a decision by the owners of the premises is taken to demolish and rebuild the premises, tenants who have been residing therein longer than one year have the possibility to apply for a special loan provided by the Ministry of Environment and Urbanisation. In cases where the decision to demolish and rebuild the premises is taken by the public authorities, an agreement with the owners of the premises is sought in the first place. It is accepted that besides owners, tenants or other people who are residing in the premises could be included within this process.563 The Application Regulation of the Law No. 6306564 also provides for a specific provision concerning the possibility to allocate residential dwellings or business premises to tenants or to holders of limited real rights. According to that, the relevant public institution allocates residential dwellings or business premises to the real estate owners in the application area. If, after the allocation, there are remaining residential dwellings or business premises, in order to allocate these, the public institution may conclude agreements with those who are residing or conducting business in the said buildings at least for one year as tenants or holders of limited real rights and those who are expropriated from their real estate pursuant to the Law. In cases where the number of the tenants and holders of limited real rights who have demanded residential dwellings or business premises are higher than the number of remaining residential dwellings and business premises, the allocation is made according to a lottery drawn before the public notary. 565 562
Art. 20/I Expropriation Code No. 2942 (1983), O.J. 18215/8 November 1983. (Kamulaştırma Kanunu). Şimşek, S. Türkiye’de Kentsel Dönüşüm Uygulamaları. Ankara: Seçkin, 2013, 166. 564
Application Regulation of the Law No. 6306 (2012), O.J. 28498/15 December 2012. 565
Art. 14/I, II Application Regulation of the Law No. 6306. 563
139 6.7 Enforcing tenancy contracts Summary Table 14. Enforcing tenancy contracts Eviction procedure -­ Enforcement with judgment -­ Enforcement without judgment (if the tenant is in arrears, or the tenancy contract has expired) Protection from eviction -­ No social defences protecting the tenant Effects of bankruptcy Bankruptcy of the tenant constitutes a reason for extraordinary termination -­ Challenging the eviction order and the notice of termination is possible • Eviction procedure: conditions, competent courts, main procedural steps and objections Legal disputes arising from tenancy contracts fall under the jurisdiction of ordinary civil courts. In some cases, the eviction procedure might be carried out by enforcement courts. Besides the usual proceeding with judgement, if the conditions are met, proceeding without judgement might be followed implying that the eviction is carried out through ordinary seizure. Competent courts The Code of Civil Procedure provides that all disputes arising from tenancy agreements are dealt with by the civil courts of peace. General provisions on the lease contracts, rights and obligations of the parties, hand over and return of the leased object, failure to pay the rent, renovations and modifications on the leased object, defects, transfer of the lease and sub-­lease, termination of the lease agreement, claims arising from the lease, rent assessment and adaptation of the rent, claims arising from the breach of the contract, etc. all fall within this scope. Therefore, all kinds of actions for annulments, eviction cases, all relevant cases for claims and compensation and set off cases, regardless of their nominal value, are heard in civil courts of peace.566 An exception to this general rule is that if the eviction is demanded via enforcement without judgement, then the enforcement court would be competent. This procedure may be followed merely in cases where the tenant fails to pay the rent and in cases where the tenant refuses to return the rented apartment. If the tenant objects to the payment order or eviction order, claims for the removal of those objections are filed by the enforcement court which may decide for or against the eviction of the tenant, as described below.567 566
Y. 6. HD E. 2006/12437 K. 2007/1184 T. 13.2.2007. Arts. 269, 272 Enforcement and Bankruptcy Code. Aydemir, 266. 567
140 Place of jurisdiction The Code of Civil Procedure provides that, generally, the court where the defendant resides is has jurisdiction in a civil case. Disputes arising from contracts are heard at the courts in the place of performance of the contractual obligation;; however, disputes concerning immovables or servitudes on immovables are heard at the courts where the immovable is located. Legal disputes arising from the tenancy agreement might relate to its termination, eviction of the tenant and sometimes to both;; thus a distinction is made between two situations: -­ if the dispute includes the termination of the contract along with claims for the unpaid rent, rent assessment and adaptation of the rent, the courts of the place where the immovable is located have jurisdiction. In practice, usually the action of debt and claim for damages are filed together with cases related to the termination of contracts and eviction at the civil court of peace where the immovable is located.568 -­ according to the Code of Civil Procedure, actions for disputes arising from contracts may generally be brought before the courts where the contractual obligations are to be performed, and it is possible that the parties may, in some cases, authorize more than one court. It is accepted therefore that contract of mandate is valid for actions of debt and claims of damages in disputes arising from tenancy agreements. The High Court of Appeals has usually accepted the validity of the contractual clauses authorising courts other than those located at the same place with the immovable.569 However, in cases where the public order is relevant, contract of mandate does not cancel out the statutory competence.570 Eviction by enforcement proceedings As pointed out previously, if the tenant does not act in accordance with the tenancy contract, the landlord may request the termination of the contract from the court and then after obtaining the judgment, the landlord might start the enforcement proceedings in order to provide the eviction of the tenant. While this enforcement proceeding with judgment is the usual practice under the TCO, it is also possible to evict the tenant via an enforcement proceeding without judgment (through ordinary seizure). Enforcement with judgment As explained in the previous section, the landlord has the possibility to terminate the tenancy contract by litigation in legally prescribed cases (necessity, reconstruction and improvement, new owner’s need, written undertaking, two legitimate notices, home owner tenant). In addition, in cases where the tenant breaches the tenancy contract (tenant in arrears, care and consideration and other obligations) the landlord may terminate the contract by filing a legal action before the competent courts. If, despite the termination of the contract, the tenant continues to reside in the dwelling, the landlord may request his or her eviction by way of enforcement proceedings with judgment. In order to follow this 568
Aydemir, 267. Y. 6. HD E. 1980/2004 K. 1980/6058 T. 19.6.1980, Y. 6. HD E. 1984/4025 K. 1984/4245 T. 4.4.1984. 570
Aydemir 267. 569
141 procedure, a judgment or one of the documents below which are deemed as judgment, is required: -­ compromises and acceptances made before the court, -­ notarial deeds with an unconditional acknowledgement of a monetary debt, -­ letters of guarantee for appeal -­ letters of guarantee for the execution office.571 In addition to these, judgments of the authorities competent to issue documents which are deemed to have characteristics of a judgment specified by special laws give the possibility to commence enforcement proceedings with judgement. The Code of Enforcement and Bankruptcy sets forth a special procedure for the eviction from immovables, making a distinction between whether the immovable is in the possession of the debtor or in the possession of a third party. If the immovable is in the possession of the debtor, e.g. if the tenant is residing in the dwelling, an execution order is given to the tenant by the execution office upon landlord’s request including the judgement on the eviction. This notice by the execution office orders the tenant to return the dwelling within seven days. If the tenant fails to obey the order, his or her eviction is enforced by the authorities.572 Enforcement without judgment The Code of Enforcement and Bankruptcy provides for the possibility to evict the tenant via an enforcement proceeding without judgment in two cases: if the tenant is in arrears or if the duration of the contract has ended. -­ Tenant in arrears:573 If the tenant is in arrears, the landlord gives a written notice setting a time limit of at least thirty days (in case of residential and roofed commercial premises) for the tenant to pay the rent (and the accessory charges) and stating that otherwise the contract would be terminated. If the tenant fails to pay the debt within the given time limit, the landlord may choose, instead of filing a lawsuit, to commence the enforcement proceedings without judgement. Upon the landlord’s request including information on the amount and corresponding period of the unpaid rent, the tenant is sent an order of payment by the execution office. The order must state that if the tenant does not pay the indicated amount, he or she will be requested to return the dwelling and also that he or she may challenge the order within seven days. According to the tenant’s reaction, one of the two following possibilities might take place: 1) If the tenant neither challenges the order of payment in time nor makes the requested payment within the given period, the enforcement court decides, upon the request of the landlord within six months, the eviction of the tenant.574 The six-­month period is a strict time limit for the landlord;; if the landlord does not request the eviction within six months, it is no longer possible to file an eviction request at the enforcement court and it is not 571
Art. 38 Code of Enforcement and Bankruptcy. Art. 26 (1) Code of Enforcement and Bankruptcy. 573
Art. 269 Code of Enforcement and Bankruptcy. 574
Art. 269/a Code of Enforcement and Bankruptcy. 572
142 possible to start a second enforcement proceeding without judgment for the same claim.575 2) If the tenant challenges the payment order within seven days, the enforcement proceeding halts automatically. In this case, the landlord may request the cancellation of the tenant’s objection in two different ways according to the motive of the objection. -­ In case of objection to the tenancy contract, its signature or its date;; the landlord may only request the cancellation of the objection if the contract is set or approved by the notary. In other words, if the tenancy contract is concluded in ordinary written form or orally, the landlord may not request the eviction of the tenant;; he or she may, in this case, only file a claim in civil courts.576 Upon the submission of the notary-­approved contract, if the enforcement court decides that the objection by the tenant was not in place, the court decides the eviction of the tenant.577 -­ In case of objection due to other reasons than the contract itself (such as already having made the payment on which the proceeding is based), the proceeding halts.578 The landlord, in order to continue the proceeding, may request the cancellation of the objection from the enforcement court. The tenant has to prove his or her grounds for objection by official documents or documents signed by the landlord or approved by the notary;; if the tenant fails to do so, the enforcement court decides the eviction of the tenant. The decision might be enforced ten days after its notification without the need to wait for its finalisation. The tenant’s right to request the stay of execution is reserved.579 -­ Expiration of the tenancy contract.580 Time-­limited lease contracts terminate automatically upon the expiration of the period specified in the contract;; however, this is not the case for tenancy contracts for residential and roofed commercial premises which are subject to exceptional rules. As described previously, a time-­limited tenancy contract terminates at the end of its duration only if the tenant wishes so and to that end notifies the landlord in writing at least fifteen days before the contract expires. Otherwise, the contract is prolonged for one year. Therefore, the landlord may not, in principle, request the eviction by proceeding without judgement.581 In order to commence such proceeding, parties must have separately agreed in writing on the return of the dwelling on a specific date. If the tenant does not return the apartment although he or she has undertaken to do so by a written agreement, the landlord may terminate the tenancy agreement by either filing a lawsuit or commencing enforcement proceeding within one month from the agreed (but not complied with) date of return of the dwelling.582 In order to commence the proceeding without judgement against the tenant in this case, the undertaking agreement must be in writing.583 If the conditions are fulfilled, the landlord may request the eviction of the tenant from the premises. The enforcement office sends an eviction order to the tenant including a 575
Y. 6. HD E. 2009/1043 K. 2009/3191 T. 13.4.2009. Art. 269/b-­4 Code of Enforcement and Bankruptcy. 577
Aydemir, 273. 578
Art. 269/c Code of Enforcement and Bankruptcy. 579
Art. 36 Code of Enforcement and Bankruptcy. 580
Arts. 272–275 Code of Enforcement and Bankruptcy. 581
Art. 347 TCO. 582
Art. 352/I TCO. 583
Y. 12. HD E. 2002/4801 K. 2002/5521 T. 18.3.2002. 576
143 statement on his or her optional right to object the proceeding within seven days. If the tenant challenges the eviction order, two possibilities might take place: -­ if the written undertaking agreement is prepared or approved by the notary, the landlord may request the cancellation of the objection from the enforcement court, -­ if the written undertaking agreement is not prepared or approved by the notary, the landlord may only request the cancellation of the objection from general courts. If the court determines that the written undertaking agreement is valid, an eviction judgment is issued and following the proceeding with judgement, the enforcement office evicts the tenant and hands over the apartment to the landlord.584 • Rules on protection (“social defences”) from eviction Defences against eviction derive mainly from the provisions of the TCO and the contractual practices;; there are no social defences protecting the tenant from eviction. • May rules on the bankruptcy of tenant-­consumers influence the enforcement of contracts? Bankruptcy of the tenant gives the landlord the right to terminate the lease extraordinarily when the legally prescribed conditions are met. In case of a postponement of bankruptcy case, if a temporary injunction is imposed, all the execution proceedings, including the proceedings that have started prior to the injunction decision, halt. In the same vein, the eviction decisions against the debtor (tenant) may not be enforced during the temporary injunction.585 584
Aydemir, 277. Ibid, 208. Y. 8. HD E. 2012/5255 K. 2012/7330 T. 11.9.2012. 585
144 6.8 Tenancy law and procedure “in action” The practical role of private rented housing can only be realistically assessed when the practical functioning of the legal system in this field (“tenancy law in action”) is taken into account: • What is the legal status and what are the roles, tasks and responsibilities of associations of landlords and tenants? There is no association of landlords in Turkey. Activities of the association of tenants are limited to providing advice and legal support to tenants and raising public awareness of the tenants’ rights against unfair and unlawful practices by landlords. • What is the role of standard contracts prepared by association or other actors? Standard tenancy contracts laying down general terms and conditions are widely used, frequently with specific conditions additionally filled in the last page of the contract. These standard contracts can be bought mostly at the stationary shops and are also available on the Internet. Both landlords and tenants prefer standard contracts since it is practical and simple to conclude the tenancy agreement just by filling in the relevant information in a standard document and signing it. • How are tenancy law disputes carried out? Is tenancy law often enforced before courts by landlords and tenants and/or are -­ voluntary or compulsory -­ mechanisms of conciliation, mediation or alternative dispute resolution used? Alternative dispute resolution is a relatively new practice in Turkish legal system and is still underpracticed. It is suggested that it will become more common in the future by the development of the reconciliation culture and negotiation and mediation skills on one hand and the establishment of institutional infrastructure on the other.586 At the legislative level, several laws have been amended in the aftermath of the adoption of the EU Directive on mediation in civil and commercial matters587, and most notably, the Law No. 6325 on Mediation in Legal Disputes has been enacted.588 Under these circumstances, like almost all other legal fields, tenancy law disputes are carried out either at courts or, as it is sometimes the case, through out-­of-­court solutions. • Do procedures work well and without unreasonable delays? What is the average length of procedures? Are there peculiarities for the execution of tenancy law judgments (e.g. suspensions of, or delays for, eviction)? 586
Özbek, M.S. Alternatif Uyuşmazlık Çözümü Third Edition. Ankara: Yetkin, 2013. Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters [2008] O.J. L 136/3. 588
Law No. 6325 on Mediation in Legal Disputes (2012) O.J. 28331/22 June 2012 (Hukuk Uyuşmazlıklarında Arabuluculuk Kanunu). 587
145 Unreasonable delays and procedural difficulties have been a serious problem in the past. After some reforms in the judicial structure, the procedures are said to be working better. The Ministry of Justice has reported in 2010 that a legal procedure took 209 days on an average in Turkey.589 This period varies according to the types of the courts. According to the report, while the procedure for cases brought before the civil court of peace, including the tenancy disputes, take an average of 109 days, cases filed in the other courts take much longer (i.e., 165 days in family courts, 446 days in labour courts, 455 days in commercial courts and 544 days in courts for intellectual and industrial property rights).590 On the other hand, especially in big cities, the procedures might take considerably longer. The procedure for eviction cases, for instance, usually takes around one year in big cities depending on the workload of the court.591 Landlords often complain about the lengthy procedure for eviction cases and not getting their rent paid for several months, sometimes over a year, during the legal process. • Are there problems of fairness and justice? Are there problems of access to courts especially for tenants? What is the situation concerning legal fees, legal aid and insurance against legal costs? No particular problems of fairness and justice have been reported. It is, though, unrealistic to assert the existence of an absolute trust of the society in the judicial system. Tenants would mostly try to find their own ways to settle tenancy disputes and consider legal remedies as a last resort, although there are no formal problems in their access to courts. Legal costs and fees vary depending on the type of the case, the amount of the monetary claim, the number of witnesses, experts, etc. Legal aid is provided by the bar association to those who fulfil the criteria of being poor and prove it by submitting certain documents. In those cases where a person proves that he or she cannot afford legal proceedings, he or she is exempted from the legal costs and fees. In addition, the bar association assigns an attorney who have pre-­volunteered to carry out the proceedings against a certain fee below the standard attorney’s fee. It is possible to take out a legal insurance, but in practice it is extremely rare, almost inexistent. • How about legal certainty in tenancy law? (e.g.: are there contradicting statutes, is there secondary literature usually accessible to lawyers etc?) Since the new Code of Obligations, effective from July 2012, has repealed the previous specific law on renting of real estate, and covers residential tenancy as a separate section, there are no major contradictions with other statutes. The legal uncertainty on some 589
Ministry of Justice (Turkey), ‘Dava Açmak’. http://www.myd.adalet.gov.tr/dokumanlar/bros%C3%BCrler/9%20Dava%20a%C3%A7mak.pdf 590
Ibid. 591
‘Kiracı Tahliye Davası Ne Kadar Sürer’. Emlak Kulisi, 9 June 2014 http://emlakkulisi.com/kiraci-­tahliye-­
davasi-­ne-­kadar-­surer/259899 146 provisions of the new Code and a few issues that are open or somewhat unclear are solved by way of interpretation or by courts. • Are there “swindler problems” on the rental market (e.g. flats fraudulently advertised on the internet as rental offers by swindlers to whom the flats do not belong)? Swindler landlord problems exist despite several warnings and recommendations for renting a dwelling, but cause less threat for Turkish people compared to foreigners who want to buy or rent real estate in Turkey. Typically, swindler landlords advertise imaginary dwellings at reasonable or lower rents on the Internet with nice pictures. When they are contacted by prospective tenants, they tell that they are out of town or busy, and a large number of people are interested in renting the dwelling thus an advance payment should be made. After the requested amount is transferred to the bank account, it becomes impossible to reach the swindler landlord again. While the cases of swindler landlords are less common, it is more often the case that false statements about the condition of the dwelling or its qualities are given or some defects in the dwelling are hidden. Likewise, landlords often promise to make some improvements in the dwelling within a few weeks or months. For instance, the landlord gives his or her word on the instalment of a central heating system in the apartment soon or before winter, etc. or the replacement of regular windows with PVC windows but never takes action to do so once the tenancy agreement is concluded. • Are the areas of “non-­enforcement” of tenancy law (such as legal provisions having become obsolete in practice)? Since the tenancy law was completely revised and the new Code of Obligations entered into force repealing the previous law, there are no provisions in tenancy law that have become obsolete in practice. • What are the 10-­20 most serious problems in tenancy law and its enforcement? 1. Despite the recent ‘tenancy law reform’ by the entry into force of the new Code of Obligations in 2012, many practical issues are dealt with according to the previous law. Especially more tenant-­friendly provisions of the new Code are still ignored by the landlords, and tenants’ vulnerable position generally remains. 2. The absence of adequate legal protection of privacy, coupled with the landlord’s stronger position in practice in the tenancy relationship, often causes violations of the tenant’s privacy. Landlords sometimes intervene with the private lives of their tenants by imposing restrictions although these are neither covered by the tenancy statute nor indicated in the tenancy contract. Tenants have to bear with such interventions because they believe that it is not easy to find a suitable apartment given the high demand especially in big cities. 147 3. There are no effective rules against discrimination. Landlords not only actually discriminate among prospective tenants but also declare groups of unwanted tenants, based on ethnical origin, religion, profession, marital status, etc. 4. Some landlords disguise deficiencies of the dwelling. For example, a landlord might keep silent about a malfunction in the heating system, which might not be discovered by the tenant until winter and might cause problems in repair costs. 5. Despite the provisions on rent increases in the new Code of Obligations, landlords have requested excessive rent increases at the end of rental periods, and, in most cases, tenants agree because of the fear of eviction and ignorance of their rights. In order to circumvent the provisions on rent increases, landlords offer new contracts to tenants, instead of increasing the rent. 6. As the legal procedure usually takes a long time, both landlords and tenants tend to solve problems arising from the tenancy out of court. These solutions are not always amicable;; they might include threatening and causing nuisance to either party or their co-­
habitors. 7. The system of deposit might very often be abused by landlords. Although the new Code of Obligations specifies the amount of deposit and requires that it should be secured in a separate bank account, in practice it is often used by landlords as a bonus payment. In the same vein, landlords often avoid returning the deposit at the end of the tenancy based on petty inadequacies or unfair claims. 8. The registration of tenancy contracts is not mandatory and even an unregistered tenancy contract would continue when a dwelling is sold. The Code of Obligations protects the tenant in the event of the transfer of ownership of the dwelling by requiring the new owner become party to the tenancy contract. However, under the Code of Enforcement and Bankruptcy, if the ownership of the dwelling is transferred as a result of a foreclosure decree, the tenant has to prove the tenancy agreement by an official document. Tenancy agreements in writing do not qualify as official documents. In the absence of a registered contract, if the tenant can not prove the existence of the tenancy agreement by an official document, he or she may not exercise his or her rights deriving from the tenancy law. In this case, the tenant is deemed as an occupier and has to return the dwelling within fifteen days. 9. Short-­term tenants (for example, exchange students for a single term) remain outside the scope of the tenant-­friendly provisions of the Code of Obligations. Tenancy contracts for less than six months are subject to the general provisions on leases, whereas tenancy contracts for six months or more are subject to the more protective, specific provisions on residential tenancies. 10. Tenants are usually not aware of their rights and are reluctant to seek legal support. Lobby or umbrella organisations are generally not strong in Turkey. A tenants’ association officially exists, but in the absence of institutional support and any strong civil-­society culture it is effective only to a small extent. 148 • What kind of tenancy-­related issues are currently debated in public and/or in politics? Two tenancy-­related governmental policies have been particularly under discussion in recent years. Both policies are strongly criticised for promoting ‘espionage’ or ‘whistleblowing’ culture in the society. One of the policies is a regulation rewarding tenants who inform on their landlord’s tax evasion with a payment of 10 per cent of the fine imposed on the landlord;; it is guaranteed that the informer-­tenant’s identity is kept confidential. The other topical discussion concerned initially student apartments, where male and female tenants live in the same dwelling. After some declarations on the immorality of the mixed student apartments by then-­Prime Minister Erdogan, landlords were encouraged by some groups to evict non-­married couples be they students or not. Likewise, neighbours were advised to inform on the students or other tenants who have opposite-­sex roommates or guests. Apart from the recent policies, the discontinuation of the lojman system, housing provided for certain public employees, has been debated for the last ten years, and still causes disputes between public institutions. 149 7. Effects of EU law and policies on national tenancy policies and law 7.1. EU policies and legislation affecting national housing policies Turkey is not an EU member state. Since 1999, Turkey has the status of candidate state;; accession negotiations with Turkey have been launched on 3 October 2005 and are continuing.592 While the accession negotiations require, among others, that Turkey should undertake and apply the EU acquis;; the implementation of directives and regulations are not yet mandatory for Turkey. On the other hand, accession negotiations describe the time frame given for Turkey to fully and effectively adopt the EU acquis, which have been categorized under thirty-­five chapters. As of November 2014, only one chapter (Chapter 25 – Science and Research) has been provisionally closed.593 In the following sections, the current status of the accession negotiations and Turkey’s progress in the relevant field are pointed out. • fundamental freedoms • e.g. Austrian discussion on secondary homes;; licence to buy house needed? • cases in which a licence to buy house is needed -­ is this compatible with the fundamental freedoms? The statuses of the chapters of the accession negotiations on the four market freedoms of the EU are different. While the chapter on the free movement of capital (Chapter 4) is opened, the screening report for the chapters on the free movement of goods (Chapter 1) and the right of establishment and freedom to provide services (Chapter 3) are approved at the Council of the EU with benchmarks and the draft screening reports for the chapter on the freedom of movement of workers (Chapter 2) are still to be approved. The preparations of Turkey for the four freedoms of the Common Market, generally speaking, need to be intensified. There has been some progress in the area of free movement of goods and free movement of capital;; while, on the other hand, preparations in the area of freedom of movement for workers, and the right of establishment and the freedom to provide services remain at an early stage.594 As regards housing policies, “arrangements for real estate acquisition remain non-­
transparent, not aligned with the acquis and restrictive of the rights of a number of Member State nationals.”595 592
Turkey was granted the status of candidate country by the Helsinki European Council of December 1999. Later in 2004, at the European Council in December 2004, it was confirmed that Turkey fulfilled the Copenhagen political criteria which are a prerequisite for opening of the accession negotiations. Accession negotiations have been launched on 3 October 2005 with the adoption of the Negotiation Framework by the Council of the European Union. 593
For the current situation of accession negotiations, see Ministry for EU Affairs (Turkey), http://www.ab.gov.tr/index.php?p=65&l=2 594
See 2014 Progress Report, pp. 26–29. 595
Ibid. 150 In May 2012, the Land Register Law No. 2644596 was amended to facilitate the real estate acquisition for foreigners: the reciprocity stipulation is no longer required.597 However, legal restrictions remain particularly regarding the dimension of the real estate to be acquired.598 Also, permission of the military authorities prior to the acquisition is required: if the real estate is located within the borders of security zone, it is not possible to transfer its ownership to a foreigner.599 Furthermore, only the citizens of certain countries determined by the cabinet of ministers are allowed to acquire real estate. Foreigners who want to acquire real estate are advised to get information from the Turkish authorities on whether they are allowed to do so.600 The list of countries whose citizens are allowed to purchase real estate is not publicly announced. It is based on an assessment of ‘national interests and bilateral relations’ with the respective country.601 Additional restrictions apply to Greek, Bulgarian and Cypriot citizens.602 The 2014 EU Progress Report points out that Turkey’s legislative framework on the acquisition of real estate by foreigners remains yet to be aligned with Article 63 of the TFEU and Turkey needs to adopt and implement an action plan for the gradual liberalisation of the acquisition of real estate by foreigners. • EU social policy against poverty and social exclusion Poverty and social exclusion have been considerable social issues in Turkey since 1970s. There is no clearly defined policy objective, strategy or action plan and no institutional mechanism to combat poverty, despite the inclusion of some remarks in the national development plans.603 On the other hand, it is possible to see the positive effects of the EU candidacy. 596
Land Register Law No. 2644 (1934), O.J. 2892/22 December 1934 (Tapu Kanunu). Art. 35 Land Register Law. 598
The total area of the real estate acquired by the foreign real persons and the independent limited real rights may not exceed ten per cent of the surface area of the district and may not exceed thirty hectares country-­wide per person. The cabinet of ministers is authorized to increase the amount per person country-­
wide by twofold. (Art. 35 Land Register Law). 599
Ministry of Foreign Affairs (Turkey) ‘Yabancılar İçin Türkiye’de Taşınmaz Satın Alma Rehberi’. http://www.mfa.gov.tr/yabancilar-­icin-­rehber.tr.mfa 600
Ibid. 601
On condition that the legal restrictions are followed, foreign nationals of countries which are determined by the cabinet of ministers in cases required for interests of the country and for international bilateral relations may acquire real estate and limited real rights in Turkey (Art. 35 Land Register Law). 602
Problems for particularly Greek nationals in inheriting and registering property were reported. In the 2009 judgment on Fokas v. Turkey, the ECtHR ruled that the reciprocity principle was not a valid reason to deny the applicants’ entitlement to inheritance and found a violation of Article 1 of Protocol 1 (peaceful enjoyment of possessions) of the European Convention on Human Rights. In the same case, the October 2013 judgment on just compensation ordered that financial compensation be paid to the applicants. 2014 Progress Report, 60. 603
The Seventh Development Plan (1996–2000): “The priority is given to the issues of poverty alleviation, imbalance in income distribution and increase in welfare by taking into account the criteria of economic effectiveness. The policies of increasing active labor and individual’s constructing their own businesses will be fostered…Social Solidarity Fund is restructured in order to increase the welfare level of poor people.” The Ninth Plan (2007–2013): “The life of the individuals that face the risk of poverty and social exclusion will be improved through inclusion policies and increasing their living standards.’ The Tenth Plan (2014–
2018), it is clearly remarked that Turkey aims to solve the poverty problem but the instruments to reach this objective is still ambiguous. Filiz, B. ‘Cost-­Benefit Analysis of EU Social Inclusion Policy Implementations in Turkey’. Ankara Avrupa Çalışmaları Dergisi 13, no. 1 (2014): 125–145. 597
151 In the 2004 EU Regular Report, it was stated that the “[e]xisting structures to promote social inclusion are highly dispersed and there is insufficient coordination of activities. It is important to promote an integrated approach mobilizing various governmental bodies and all relevant stakeholders in the process.604” As a response to these criticisms, General Directorate of Social Assistance and Solidarity was established in 2011 under the auspices of the Ministry of Family and Social Policies. While the main objective of its establishment was to gather all institutions providing social assistance under a single institution, The Directorate General has, in practice, still a limited role in coordinating the social assistance schemes given the high share of several other institutions on the distribution of social support.605 In the course of the EU accession negotiations, the Screening Chapter 19 (Social Policy and Employment) included social inclusion as an agenda item. In 2004, a process of Joint Inclusion Memorandum (JIM) was launched to be carried out by the coordination of the Ministry of Labour and Social Security with the contributions of approximately sixty institutions including public institutions, social partners, universities and NGOs. The revision of the draft of first six chapters (including economic and social background, key challenges, policy issues, gender equality, and statistical system) was completed in February 2006 and the final version of the JIM was planned to be approved and signed in the second half of 2006. The JIM was supposed to be the basic document for Turkey in determining the strategy to combat social exclusion and poverty and would improve the cooperation between all relevant institutions through open method of coordination.606 However, the process has been locked up as the Commission and Turkey have not reached any agreement on certain issues concerning the Roma settlements.607 The 2013 EU Progress Report pointed out that in the area of social inclusion, an overall policy framework still lacked. The Report emphasized, furthermore, the income inequality and the insufficiency of the social transfers in alleviating poverty.608 The 2014 EU Progress Report repeated the need to develop an integrated comprehensive policy framework in the field of social exclusion.609 • competition and state aid law The screening report for the chapter on competition and state aid law (Chapter 8 – competition policy) is approved at the Council of the EU with six benchmarks. While the alignment is sufficient on public undertakings and undertakings enjoying exclusive and special rights, and advanced in the field of anti-­trust and merger control;; the progress in the field of state aid lags largely behind. The entry into force of the legislation 604
European Commission, ‘2004 Regular Report on Turkey’s Progress Towards Accession’. SEC(2004) 1201, Brussels: 2004. 605
There are plenty of organizations that provide social assistance under several institutions such as Directorate General of Services for Disabled and Old People, The Credit and Dormitories Institution, Ministry of Health, Ministry of Education, General Directorate for Foundations, Municipalities, etc. Filiz, 135–136. 606
Ministry for EU Affairs (Turkey), http://www.abgs.gov.tr/tarama/tarama_files/19/SC19DET_social%20inclusion.pdf 607
Filiz, 137. 608
European Commission, ‘Turkey 2013 Progress Report’. SWD(2013) 417 final, Brussels: 2013. 609
European Commission, ‘Turkey 2014 Progress Report’. COM(2014) 700 final, Brussels: 2014 152 implementing State Aid Law in 2014 has been postponed and thus state aid control remains, so far, ineffective.610 On the other hand, the new Consumer Protection Law includes provisions on misleading and comparative advertising611 which are generally in line with the Directive 2006/114/EC.612 These provisions might be indirectly relevant with the tenancy market as regards the activities of real estate agents. • energy saving rules Regarding the accession negotiations on the energy policy of the EU (Chapter 15 – Energy), draft screening reports have not yet been approved at the Council of the EU. The Energy Efficiency Law No. 5627, which came into force in 2007, has set the legal framework for energy efficiency and prevention of wasteful use of energy in order to reduce the burden of energy costs on the economy and protect the environment. Relevant secondary legislation on energy labelling of electrical household appliances was also enacted in line with the EU requirements. On 15.12.2008, a Regulation on Energy Performance of Buildings was published by the former Ministry of Public Works and Settlement. This Regulation has been amended several times.613 Efforts to bring the energy saving rules in line with the EU acquis have been strengthened by the adoption of the Energy Efficiency Strategy Paper 2012–2023 in February 2012 by the Ministry of Energy and Natural Resources.614 The Strategy Paper aims at improving the energy efficiency in all sectors including the building sector. The activities pointed out in the strategy paper include, among many others, the revision of the legislation in force in parallel to the EU applications in order to furnish the buildings with the maximum energy requirement and maximum emission limitations.615 The 2014 Progress Report has, however, stated that the Energy Efficiency Law and related legislation is not yet aligned with the Energy Efficiency Directive.616 610
2014 Progress Report, 31–32. Art. 61 Consumer Protection Law 612
Directive 2006/114/EC Of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising [2006] O.J. L376/21. 613
Ministry for EU Affairs (Turkey), http://www.ab.gov.tr/index.php?p=80&l=2 614
Energy Efficiency Strategy Paper 2012–2023 (2012), O.J. 28215/ February 2012. 615
Ibid. 616
In April 2014, a public consultation was launched on a policy to promote high-­efficiency cogeneration in line with the Energy Efficiency Directive. In March 2014, the Energy Charter Secretariat in Brussels published an in-­depth energy efficiency policy review of Turkey, which urges the government to strengthen the capacity of the Ministry of Energy, so as to align Turkish energy efficiency legislation with the Energy Efficiency Directive. It also recommends preparing short-­term action plans with priorities, intermediate milestones, and monitoring and evaluation methods to implement properly the energy efficiency strategy paper. 2014 EU Progress Report, 38. 611
153 7.2. EU policies and legislation affecting national tenancy laws • consumer law and policy ‘Consumer and health protection’ is one of the fourteen chapters that have been opened to EU accession negotiations (Chapter 28 – Consumer and health protection). The current consumer law and policy has been significantly influenced by the EU acquis. The previous Law on Consumer Protection had been amended in 2003 to bring some of its provisions in line with the EU Regulations. A more significant reform was made in 2013 with the adoption of a new law (the Law No. 6502 on Consumer Protection). The provisions of the new law concerning sale contracts (more specifically, provisions on consumer rights, guarantees, time limits and binding nature) are to a large extent, brought in line with the EU Directive on the Sale of Consumer Goods and Associated Guarantees.617 Furthermore, the new Law contains provisions in favour of consumers on early payment of house and consumer loans, timeshare property sales and real estate sales on the basis of architectural models.618 On the other hand, concerning product-­safety-­related issues, full alignment with the General Product Safety Directive619 and the Directive on Dangerous Imitations620 has not yet been achieved. The 2014 Progress Report has emphasized the need to strengthen the enforcement capacity of consumer courts, including the Supreme Court, related chambers and arbitration committees.621 • anti-­discrimination legislation Anti-­discrimination legislation falls, most notably, within the scope of the chapter ‘judiciary and fundamental rights’ (Chapter 23) in the accession negotiations. Social policy and employment (Chapter 19) is also closely linked to anti-­discrimination issues. Currently, the screening report for social policy and employment is approved at the Council of the EU with two benchmarks, while the draft screening report for judiciary and fundamental rights is yet to be approved. Recent developments in the field of anti-­discrimination, such as the introduction of the principle of non-­discrimination on the basis of disability, and the amendment of the Turkish Criminal Code in 2014 to include penalties for discriminatory, hate-­based practices in 617
Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees [1999] O.J. L 171/12. Atamer, Y. M. & Ece Baş, ‘Avrupa Birliğİ Hukuku İle Karşılaştırmalı Olarak 6502 Sayılı Yeni Tüketicinin Korunması Hakkında Kanun Uyarınca Satım Sözleşmesinde Ayıptan Doğan Sorumluluk’. İstanbul Barosu Dergisi Tüketici Hakları ve Rekabet Hukuku Özel Sayısı 88, no. 1 (2014): 20–60. 618
Other provisions adopted in favour of consumers include;; credit cards, complex contracts, interest rate in consumer transactions, right of retraction, door-­to-­door sales, defective goods, online shopping and distance contracts, distance sales of financial services, termination of subscriptions, promotional campaigns organised by newspapers and journals, and pyramid sales systems. 2014 Progress Report, 71. 619
Directive 2001/95/EC of the European Parliament and of the Council of 3 December 2001 on general product safety [2002] O.J. L 11/4. 620
Council Directive 87/357/EEC of 25 June 1987 on the approximation of the laws of the Member States concerning products which, appearing to be other than they are, endanger the health or safety of consumers [1987] O.J. L 192/49. 621
2014 Progress Report, 71 154 economic activities and in employment,622 are positive steps as appraised in the 2014 Progress Report.623 Within this framework of the amended Criminal Code, refusing to sell or rent a property to a particular person, although the property has been offered to the public, is considered discrimination and has become a crime. But discrimination is prohibited only with regard to a number of items listed in the Criminal Code as the following: race, language, political opinion, philosophical belief, religion, sect and similar reasons and hate-­based practices. On the other hand, ethnic origin, sexual orientation and gender identity are not included within the list, even after the amendment in March 2014. Finally, the draft code on the establishment of an anti-­discrimination and equality board has not been adopted and while pending the references to discrimination on grounds of sexual orientation or gender identity were removed from the initial draft.624 In short, the Turkish legislation lags considerably behind the EU protective standards regarding discrimination on the basis of sexual orientation or age;; an equality board enhancing equal opportunities for men and women has not been created yet, despite the requirement by the acquis 625 Respect for the fundamental rights of lesbian, gay, bisexual, transgender and intersex (LGBTI) individuals needs to be improved. There is no specific body to combat racism, xenophobia, anti-­Semitism and intolerance, and no developments took place for the establishment of an Anti-­discrimination and Equality Board.626 • constitutional law affecting the EU and the European Convention of Human Rights As pointed out in the section just above, the draft screening report for Chapter 23, ‘Judiciary and Fundamental Rights’ is yet to be approved at the Council of EU. The right to property, freedom of residence and movement, respect for private life and freedom of communication are among the fundamental rights of individuals protected by the Constitution,627 which might be relevant to housing policy and tenancy law. The process of Turkey’s candidacy to the EU, has undoubtedly improved the guarantee of these fundamental rights and general human rights practice in Turkey. Considerable problems in this field remain however and, further alignment with the EU standards is required. With regard to the international documents on human rights, Turkey has to ratify the Optional Protocol to the Convention on the Rights of the Child and the Additional Protocols 4, 7 and 12 to the ECHR.628 The high number of the applications made to the ECtHR –
most of them concerning the right to a fair trial and the right to property– has decreased in 2014 thanks to the reforms recently made in the field.629 An action plan for the 622
Art. 122, Turkish Criminal Code 2014 Progress Report, 41. 624
Ibid, 58–59. 625
Ibid, 42. 626
Ibid, 49, 59. 627
Art. 35, Art. 23, Art. 20 and Art. 22 Constitution (Turkey) respectively. 628
2014 Progress Report, 48 629
During the reporting period, the European Court of Human Rights (ECtHR) delivered 122 judgments in 153 applications, finding that Turkey had violated rights guaranteed by the ECHR in 113 cases. The number of new applications went sharply down, with 1950 new applications having been made since September 2013 compared with the 5919 applications submitted in the period September 2012—September 2013. As of September 2014, 10280 applications regarding Turkey were pending at the ECtHR, down from 13900 applications in September 2013. Ibid. 623
155 prevention of violations of the ECHR, adopted in March 2014, covers fourteen main areas of human rights, including preventing violation of the right to life, preventing of ill-­treatment, ensuring effective access to courts, ensuring a trial within reasonable time, freedom of expression and media, as well as freedom of assembly. While this step is welcome by the EU Commission, an action plan for overall fundamental rights is still required, as stated in the EU Progress Report.630 A remarkable effect of the EU has been on the long-­standing problems concerning the property rights of the foundations belonging to the minority communities in Turkey. After the implementation of the Foundations Code (adopted in 2008 and revised in 2011), some minority communities had the possibility to request the restitution of their properties.631 On the other hand, several problems relating to the property rights of non-­muslim communities remain, mostly arising from the lack of their legal personality. In this respect, relevant recommendations by the 2010 Venice Commission on protecting property rights and education rights still need to be implemented.632 Above-­discussed problems for Greek nationals in registering and inheriting property persist.633 The constitutional rights to respect for private life and the freedom of communication, which are linked with tenancy law, should also be improved further and be brought in line with European standards. The adoption of data protection legislation and the establishment of an independent supervisory body are priority areas in this respect from the perspective of the EU Commission. Further progress should be made in guaranteeing gender equality in practice, bringing anti-­discrimination legislation and practice in line with EU standards, notably by including references to discrimination on the basis of sexual orientation and sexual identity;; and guaranteeing cultural rights of individuals belonging to minorities.634 • tax law Taxation is among the chapters that are opened to accession negotiations (Chapter 16 – taxation). The chapter consists of approximation of direct taxes (personal income tax and corporate income tax), harmonization of indirect taxes (value added tax and excise duties), elimination of double taxation and prevention of tax evasion as well as administrative cooperation on tax matters.635 Despite some positive steps with regard to excise duties, indirect taxation legislation is generally not in line with the EU acquis. As regards direct taxation, the long-­awaited income tax law has still not been adopted.636 It 630
Ibid. Under this legislation, 116 minority community foundations applied for the restitution of a total of 1560 properties. By April 2014, the Foundations Council had approved the return of 318 properties and the payment of compensation for 21 properties. 1092 applications were found to be ineligible. Assessment of the remaining applications continued. 2014 Progress Report, 59–60. 632
Council of Europe, Resolution 1625 (2008) on Gökçeada (Imbros) and Bozcaada (Tenedos): preserving the bicultural character of the two Turkish islands as a model for co-­ operation between Turkey and Greece in the interest of the people concerned. 633
2014 Progress Report, 55, 68. 634
Ibid, 63. 635
Ministry for EU Affairs (Turkey), http://www.ab.gov.tr/index.php?p=81&l=2 636
2014 Progress Report, 38–39. 631
156 is nevertheless pointed out in the 2014 Progress Report that the overall preparedness in the chapter on taxation is moderately advanced.637 • private international law including international procedural law The most significant effect of the EU candidacy on the Turkish private international law has been the entry into force of the new International Private and Civil Procedure Law No. 5718 in 2007.638 The new law aimed at improving some obsolete provisions of the previous law that failed to meet the needs emerging with the new social, political and economic changes;; and at bringing the Turkish legislation on the private international law and the international procedural law in line with the latest Turkish Civil Code that had entered into force in 2001.639 In the legislative intention of the new Code mentioned above, emphasis was made to the need to harmonise the Turkish private international law with the EU acquis, more specifically with the Rome Convention that established uniform rules for determining the law applicable to contractual obligations in the EU,640 and the Regulation on the jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (Brussels I).641 • harmonisation and unification of general contract law The main effect of the EU candidacy on Turkish legislation in this field is the entry into force of the new Consumer Protection Law in May 2014, bringing the consumer contracts largely in line with the EU acquis (see section xyz). 637
Ibid. International Private and Civil Procedure Law No. 5718 (2007), O.J. 26728/12 December 2007 (Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun) 639
Ministry of Justice (Turkey), ‘Avrupa Birliği’ne Aday Ülke Olarak Türkiye’de AB Uyum Yasalarının İç Hukuka Etki ve Katkısı’ Ankara: 2008, 12. 640
This Convention was later replaced later in 2008 by the Regulation (EC) 593/2008 1082 on the law applicable to contractual obligations (Rome I) 641
Regulation (EC) 44/2001 1084 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (Brussels I). 638
157 8. Typical national cases (with short solutions) Tenant in arrears T concludes a tenancy contract with L on 10.12.2014 whereby T rents an apartment belonging to L for one year for a monthly rent of TLR 1,000. Soon after the conclusion of the contract, T becomes unemployed and is not able to pay the rent any longer. He fails to pay the rent in March and April. Does L have the possibility to terminate the tenancy contract basing on the unpaid rents? L has the possibility to terminate the tenancy contract by fulfilling the notice requirements. The tenant has the uppermost duty to pay the rent (Art. 313 TCO). If the payment day is not specified in the contract, as in the present case, and if no local custom exists, the payment has to be made at the end of each month (Art. 314 TCO). Rent for residential premises, in practice, is paid at the beginning of the month, until the third day of each month. In the present case, by failing to pay the rents in March and April, T is in default;; no notification from L is required (Art. 117 TCO). In order to terminate the contract, L has to send T a written notification giving him a time limit of at least thirty days to pay the unpaid amount, i.e. TLR 2,000 and stating explicitly that the tenancy agreement will be terminated if T does not pay the rent within the given time (Art. 315). The period begins on the following day of the written notice given to T. Acceleration clause In a tenancy contract concluded on 01.04.2014 for one year between T as the tenant party and L as the landlord party, it is unambiguously agreed that if T fails to pay the rent on time for one month, the rent for all the remaining rental period becomes due upon a notice by L. The agreed amount of rent in the contract is TLR 1000 to be paid every fifteenth day of each month. In September, T forgets to pay the rent and on 17.09.2014, she receives a written notice from L requesting T to pay the remaining amount of rent for the entire rental period, i.e. TLR 7000, within sixty days and stating that in case of non-­payment the tenancy contract will be terminated. On 18.09.2014, T pays TLR 1000 and apologizes from L for the exceptional delay and promises not to delay the payment in any of the remaining months. L, however, repeats that she will terminate the contract if T does not pay her TLR 7000 within sixty days and states that she has the right to do so according to the precedent of the High Court of Appeals. Does L have the right to request this payment and/or terminate the contract? L does not have the right to request the payment or terminate the contract. It would have been possible to request the payment of the remaining amount of TLR 7000 according to the previous Code of Obligations and the legislative practice. However, the new TCO explicitly prohibits acceleration clauses in tenancy contracts for residential and roofed commercial premises (Art. 346 TCO). The previous judicial practice and the decisions of the High Court of Appeals are overruled by the new mandatory provision of the TCO. Although the tenancy contract is still applicable to the tenancy relation between T and L, the acceleration clause therein agreed by the parties is invalid. Therefore, L can neither request the payment nor terminate the contract basing on the breach of the contract. The termination possibility basing on the tenant’s default does not apply here either, since the tenant has paid the rent. 158 Son from Germany T has been residing in an apartment for three and a half years, basing on a written tenancy contract with its owner, L. On 29.11.2014, T receives a call from L who tells him to return the apartment before Christmas as her son (S) decided to move back from Germany with his family and wants to use his mother’s apartment as a hairdresser salon. Does L, in this case, have the right to terminate the contract? L has the right to terminate the tenancy contract basing on necessity, by filing a claim by the competent court (Art. 350 TCO). The TCO makes it possible for the landlord to terminate the contract not only for his or her own need but also in cases where the dwelling is required for his or her spouse, children, close family members and persons who he or she is legally obligated to support. The necessity should be imperative and genuine which is assessed by the Court. In the present case, the necessity of S is clear. The use of the dwelling as residential or commercial premises does not matter in showing the necessity. However, if S changes his mind or moves to another apartment after a while, L has to rent the apartment again to T;; she can not rent it to any one else without just cause, otherwise she has to pay compensation to T an amount not less than the rent of the last one-­year rental period (Art. 355 TCO). Keeping animals Tenant T lives in the same apartment block with his landlord L. She has a dog since she moved in the apartment one and half years ago. She pays the rent regularly and she has had no problems with her neighbours or with L. The tenancy contract does not include any provision that directly or indirectly allows or prohibits keeping animals in the apartment. T finds a letter in her mailbox from L requesting her to get rid of the dog who barks a lot, otherwise to find herself a new apartment. Does T have the right to keep her dog despite landlord’s objection? T does not have the right to keep her dog without the L’s consent. Keeping animals in the apartment is not per se prohibited by the TCO;; however, it is accepted, in practice, as a breach of the duty to use the dwelling with due care and show due consideration to the neighbours and persons sharing the building (Art. 316 TCO). The Condominium Law has a similar provision regarding the use of independent apartments. In a decision, the High Court of Appeals has clearly stated that keeping dogs in a residential dwelling is not allowed even though it is not explicitly prohibited in the tenancy contract and even though none of the neighbours or other persons in the building has complained for a while. (HGK. 07.04.1982 Ta. 1981/6-­499 E. 1982/34 Sa.) Maintenance and improvement of the dwelling Tenant (T) has been living in a nice apartment in Izmir for ten years. Her landlord (L) would like to install natural gas system in the apartment and informs her about the work to be carried out in the apartment starting within one month. T finds it unnecessary as most of the year it is warm in Izmir and as she already has a stove and other practical systems for heating, warm water and cooking. She does not want to bear with the work in the apartment. May L install natural gas system in the apartment no matter what T thinks about it? 159 L has the right to install natural gas system in the apartment and request T to tolerate the work to be carried out for it. Under the TCO, the landlord can make renovations or modifications to the dwelling that can plausibly be expected from the tenant to tolerate and that does not require the termination of the tenancy contract;; he or she has to give due consideration to the interests of the tenant during renovation and modification works (Art. 320/1 TCO). Instalment of natural gas system in a stove-­heated apartment is undoubtedly an improvement and it does not require the termination of the contract;; T can continue residing in the apartment during the instalment of the system and is supposed to tolerate the work. On the other hand, L has to consider the interests of T during the work and cooperate with her in finding the most suitable time to carry out the work. T, on the other hand, may request the reduction of the rent and claim damages after the improvement work (Art. 320/2 TCO). Rent increase Tenant (T) concludes a written tenancy contract with Landlord (L) on 1.1.2014 to rent a house for two years. Both parties agree on the rent as TLR 10,000 per month to be paid at the beginning of each month. They also agree on an increase rate of 20% per year. Termination period is specified as six months and notice period as one year. T wants to reside in the house for at least two years, but only five months after he moves in, it becomes clear to him that he would not be able to increase the rent 20% for the second year. What does he have to do in order to avoid the 20% rent increase? The TCO explicitly states that the agreement of the parties on the rent increase is valid on the condition that the increase rate does not exceed the increase rate of the producer price index (PPI) of the previous year (Art. 344 TCO). According to that, the rent increase in the present case is calculated based on the increase rate of the PPI for the year 2014. If the increase rate of the PPI for 2014 is less than 20%, this rate is applicable to the rent increase instead of the 20% rate specified in the contract. The High Court of Appeals has clarified this further in a decision where it was held that the increase rate per year in residential tenancy contracts is calculated on the basis of the average value of the PPI of twelve months, each month announced by the TurkStat. The average PPI for 2014 is 10.25%642 therefore the rent increase may not exceed 10.25% despite the contractual agreement. T has the possibility to file a suit at any time for fixing the rent (Art. 345 TCO). Defects Tenant (T) rents an apartment in Istanbul for one year by concluding a tenancy contract with Landlord (L) on 01.06.2014. Eight months later, she notices leaks appearing in the central heating pipes. She does not want to lose time by informing L and gets them repaired at a reasonable market price. When L hears about it, she calls T and tells that T did not have the right to make any repairs without her consent and now T has to bear all the expenses. Does T have the duty to repair the defects? Is it possible for T to request the repair expenses from L or to terminate the contract because of the leaks? According to the TCO, the tenant has the duty to pay the regular expenses on the cleaning and maintenance required for the usual use of the dwelling (Art. 317). In the present case, 642
http://www.tuik.gov.tr/PreHaberBultenleri.do?id=18648 160 there are leaks in the central heating pipes which can not be considered as resulting from the usual use of the apartment. Therefore, the expenses for the repair of the pipes are not the sort of usual expenses that are expected to be borne by the tenant. On the other hand, leaks on the pipes in the present case can be considered within the scope of the provision of the TCO on the defects of the property that have occurred after the handover of the dwelling (Art. 305 TCO) for which landlords are responsible on the condition that they are informed about it without delay (Art. 318 TCO). T has the duty to inform L about the defects that she is not expected to repair;; but she has not done so and thus she is responsible for the damages. If T had informed L about the defect and requested remedy in appropriate time and L had not remedied the defects within the given time, T would have had set off rights for the repair expenses she made on her own (Arts. 318, 305/1 TCO). Finally, as the leaks in the pipes do not make the use of the dwelling impossible or seriously restrict it, T does not have the possibility to terminate the contract extraordinarily (Arts. 305/2, 306/2 TCO). Transfer of the ownership of the dwelling Tenant (T) and Landlord (L) conclude a tenancy contract for three years on 1.1.2013. Five months later, on 1.6.2013 L sells the dwelling to P. After the transfer of the ownership, T starts to pay the rent to P as the new landlord. On 15.12.2013, P sends a notice indicating that she needs the dwelling and requesting T to return it. Does P have the possibility to terminate the contract extraordinarily? P may not terminate the contract extraordinarily and T may continue residing in the dwelling at least until the end of the tenancy contract. The TCO gives the new owner the possibility to terminate the tenancy contract only in cases where the new owner (or related persons listed in the TCO) needs the dwelling urgently and meets the procedural requirements pointed out in the TCO (351 TCO). A possibility for P to terminate the contract would have been to file a claim for termination on the basis of an urgent need of the dwelling. However, she should have notified T about her need in writing latest by 1.7.2013. As she has not notified T, she may not request the extraordinary termination of the tenancy contract. Return of the dwelling before the expiry of the tenancy contract Tenant (T) rents an apartment in Istanbul by concluding a contract on 1.4.2014 for one year with Landlord (L). Four months later, T contacts L and tells her that he does not want to live in a big city any more as he is suffering from burnout. He rents a small cottage in Datca and returns the keys of the apartment in Istanbul to L on 31.8.2014. Does T have to continue paying the rent until the end of the rent period? T has returned the dwelling without complying with the tenancy contract and the notice periods. Therefore, his duties continue for a reasonable period which makes it possible for L to rent the dwelling again with similar conditions. But if he finds a suitable and solvent tenant who is willing to take over the tenancy agreement, he should be released from the contractual obligations including paying the rent (Art. 325/1 TCO). So, T has to continue paying the rent only until he finds a new tenant fitting the requirements or until the reasonable period to find a tenant expires. 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L376/21 169 9.2 Table of Cases ANAYASA MAHKEMESİ E. 1963/3E K. 1963/67 T. 26.3.1963 YARGITAY HUKUK GENEL KURULU E. 2012/13-­1220 K.2013/239 T. 13.2.2013 YARGITAY 6. HUKUK DAİRESİ E. 2007/1868 K. 2007/3965 T. 5.4.2007 YARGITAY 12. HUKUK DAİRESİ E. 2000/14385 K. 2000/15278 T. 17.10.2000 YARGITAY 6. HUKUK DAİRESİ E. 2003/8598 K. 2003/8719 T. 4.12.2003 YARGITAY 6. HUKUK DAİRESİ E. 2013/13435 K. 2013/16370 T. 5.12.2013 YARGITAY HUKUK GENEL KURULU E. 2005/3-­23 K. 2005/48 T. 9.2.2005 YARGITAY 6. HUKUK DAİRESİ E. 1982/8263 K. 1982/8444 T. 6.10.1982 YARGITAY 13. HUKUK DAİRESİ E. 1996/3139 K. 1996/3683 T. 12.4.1996 YARGITAY 18. HUKUK DAİRESİ E. 2005/3990 K. 2005/5189 T. 17.5.2005 YARGITAY HUKUK GENEL KURULU E. 1981/6-­499 K. 1982/334 T. 7.4.1982 YARGITAY 6. HUKUK DAİRESİ E. 1964/4015 K. 1964/4838 T. 13.11.1964 YARGITAY 13. HUKUK DAİRESİ E. 1996/3139 K. 1996/3683 T. 12.4.1996 YARGITAY 18. HUKUK DAİRESİ E. 2011/3117 K. 2011/6531 T. 10.5.2011 YARGITAY 3. HUKUK DAİRESİ E. 2000/6318 K. 2000/6680 T. 6.7.2000 YARGITAY 6. HUKUK DAİRESİ E. 2001/857 K. 2001/1012 T. 12.2.2001 YARGITAY 6. HUKUK DAİRESİ E. 2002/1293 K. 2002/1563 T. 11.3.2002 YARGITAY 6. HUKUK DAİRESİ E. 2013/691 K. 2013/3827 T. 5.3.2013 YARGITAY HUKUK GENEL KURULU E. 1982/6-­863 K. 1984/1049 T. 12.12.1984 YARGITAY 6. HUKUK DAİRESİ E. 1996/4630 K. 1996/4784 T. 20.5.1996 YARGITAY 6. HUKUK DAİRESİ E. 2001/9644 K. 2001/9744 T. 24.12.2001 YARGITAY 6. HUKUK DAİRESİ E. 1999/5750 K. 1999/5784 T. 28.6.1999 YARGITAY HUKUK GENEL KURULU E. 1989/6-­362 K. 1989/551 T. 25.10.1989 YARGITAY 6. HUKUK DAİRESİ E. 2006/4202 K. 2006/6329 T. 5.6.2006 170 YARGITAY 6. HUKUK DAİRESİ E. 1996/11327 K. 1996/11586 T. 16.12.1996 YARGITAY 6. HUKUK DAİRESİ E. 1986/3844 K. 1986/5305 T. 15.4.1986 YARGITAY 6. HUKUK DAİRESİ E. 1983/11163 K. 1983/11247 T. 15.11.1983 YARGITAY 6. HUKUK DAİRESİ E. 1983/13192 K. 1983/13303 T. 23.12.1983 YARGITAY 6. HUKUK DAİRESİ E. 2000/10102 K. 2000/10334 T. 4.12.2000 YARGITAY 6. HUKUK DAİRESİ E. 1992/11622 K. 1992/12275 T. 2.11.1992 YARGITAY 6. HUKUK DAİRESİ E. 1996/11998 K. 1997/114 T. 20.1.1997 YARGITAY HUKUK GENEL KURULU E. 1984/6-­147 K. 1985/794 T. 9.10.1985 YARGITAY 6. HUKUK DAİRESİ E. 2006/12437 K. 2007/1184 T. 13.2.2007 YARGITAY 6. HUKUK DAİRESİ E. 1980/2004 K. 1980/6058 T. 19.6.1980 YARGITAY 6. HUKUK DAİRESİ E. 1984/4025 K. 1984/4245 T. 4.4.1984 YARGITAY 6. HUKUK DAİRESİ E. 2009/1043 K. 2009/3191 T. 13.4.2009 YARGITAY 12. HUKUK DAİRESİ E. 2002/4801 K. 2002/5521 T. 18.3.2002 YARGITAY 8. HUKUK DAİRESİ E. 2012/5255 K. 2012/7330 T. 11.9.2012 171 9.3 List of Abbreviations AKP Adalet ve Kalkınma Partisi Art(s) Article(s) AT Author’s Translation DPT Devlet Planlama Teşkilatı ECHR European Convention on Human Rights ECtHR European Court of Human Rights EKB Enerji Kimlik Belgesi E. Esas GEF Global Environment Facility GKHK Gayrımenkul Kiraları Hakkında Kanun GYO Gayrımenkul Yatırım Ortaklığı GYODER Gayrımenkul ve Gayrımenkul Yatırım Ortaklığı Derneği HD Hukuk Dairesi HGK Hukuk Genel Kurulu JIM Joint Inclusion Memorandum K. Karar KEY Konut Edindirme Yardımı Kira-­Der Kiracılar Derneği KONUTDER Konut Geliştiricileri ve Yatırımcıları Derneği LGBTI Lesbian Gay Bisexual Transgender and Intersex METU Middle East Technical University NGO Non-­governmental Organisation O.J. Official Journal PHC Population and Housing Census 172 PPI Producer Price Index REIT Real Estate Investment Trust RoI Return on Investment TBB Türk Barolar Birliği TCC Turkish Civil Code TCO Turkish Code of Obligations TOKI Toplu Konut Idaresi Başkanlığı TurkStat Turkish Statistical Institute TÜİK Türkiye Istatistik Kurumu UNDP United Nations Development Programme VAT Value Added Tax Y. Yargıtay 173