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RENTAL RELATIONS AND COVID-19 PANDEMIC

Measures have been taken in many areas in order to be protected against and prevent the spread of the coronavirus (Covid-19) pandemic, which started in Wuhan city of China, affected the world and spread rapidly, and was described as the PANDEMIC by the World Health Organization (WHO). Rental relationships are one of these areas. In the Provisional Article 2 of the Law on the Amendment to Some Laws Numbered 7226, it has been stated in terms of workplace rents that “Failure to pay the rent to be accrued from 1/3/2020 until 30/6/2020 does not constitute a reason for termination of the rental agreement and evacuation.” According to the mentioned article, failure to pay rent within the specified dates will not constitute a reason for termination of the rental agreement and evacuation.

This provision definitely does not regulate the issue of not paying the rent.

So, in the workplace rents, can the tenant avoid paying the rent based on the Covid-19 outbreak?

“Money debt cannot be destroyed”, therefore, impossibility of performance cannot be applied.

This situation has been revealed both in doctrine and judicial decisions. However, it is accepted that adaptation can be made if the conditions exist.

There are different opinions in doctrine.

  • First opinion, in accordance with Article 301 of Turkish Law of Obligations, the renter’s debt is not just about delivering the rented place. It is also obliged to keep it in these conditions during the rental period. Regarding the workplaces / shopping malls that were closed due to the administrative measures taken during the Covid-19 period, they state that the rental debt should not be paid “during the closed period” on the grounds that the renter could not fulfil the delivery debt and the tenant could not use the rented place.
  • The other opinion states that with the delivery of the rented place, the debt of the renter is over. For this reason, it cannot be exempt from rental debt.

The provision of Article 324 of Turkish Code of Obligations concerns tenants who close the workplace at their own will in the event that the work stops due to market reasons, although the workplace has not been closed by the Ministry of Interior. Such a situation does not prevent the payment of the rental debts. In this case, the tenant’s right to extraordinary termination may come to the agenda in accordance with article 331. However, this provision was postponed until 1.7.2020 for the rental agreements of the workplaces where the tenant is a trader. In this case, the provisions of the rental agreement shall be applied in accordance with the agreement freedom in relation to the issues specified in these articles in the rental agreements. In cases where there is no provision relating the rental agreements, the provisions of the former Law of Obligations shall be applied.

The fact that the workplaces remain closed for an indefinite period of time should also be evaluated within the scope of the right of “extraordinary termination in the presence of major causes” of Article 331 of the Turkish Code of Obligations.

Obligations of the Renter

I. Obligation to hand over

Article 301- The renter shall be obliged to hand over the rented place on the agreed date in a state suitable for the use intended in the agreement and to maintain such state throughout the duration of the agreement. This provision may not be revised to disadvantage of the tenant in residential or roofed workplace rents; in other rental agreements, no procedure contrary to this provision may be ruled by way of common procedure conditions.

IV. Disuse of rented place

1. In general

Article 324- Even if the rented place, as long as it is maintained in a usable state, is not used for any reason originating from the tenant himself or even scarcely used, the tenant shall be obliged to pay the rent. In such a case, the costs which the Renter had been released of shall be deducted from the rent.

III. Extraordinary termination

1. Major causes (1)

Article 331- Each party may at any time terminate the agreement by following the legal cancellation notification periods in the case of the existence of major causes that make the continuation of the rental relationship unbearable for both parties.

The judge shall decide on the financial consequences of the extraordinary termination notification by considering the situation and the conditions.

A definite definition about the major cause concept has not been made in the article of the law; a separate evaluation must be made by the court according to the characteristics of each concrete event. It seems likely that this indefinite period of closed-down, which negatively affects the agreement and has an unbearableness fact, can be considered as a “major cause” in disputes to be brought before the judiciary.

The possibility of exercising the right to “extraordinary termination” in the presence of major causes in the article provision has been postponed until 01.07.2020. Unless there is a new legal change, the postponement of the relevant article remains. As a matter of fact, if the effects of force majeure continue as of 01.07.2020, the parties may request the termination of the agreement for extraordinary reasons.


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