Commercial Lease Agreement
"What are the key provisions of commercial leases under Turkish law?"
Quick Answer
Commercial (business premises) leases in Turkey are primarily governed by the Turkish Code of Obligations (TBK), and many are treated as “roofed workplace leases,” where mandatory tenant protections apply. Key risk areas are rent increase rules, security arrangements (deposit/guarantee), and termination/eviction, which typically requires statutory grounds and proper notice—often followed by court proceedings.
Legal Framework
Commercial (business premises) leases in Turkey are primarily governed by the Turkish Code of Obligations (TBK). A crucial distinction is made for "roofed workplace leases" (çatılı işyeri kiraları), which are subject to specific mandatory provisions designed to protect the tenant. These protections often override contrary contract terms, making it essential to understand the statutory landscape.
Core Clauses in a Commercial Lease Agreement
- Premises and Permitted Use: Clearly defining the location and the specific business activities allowed.
- Term and Renewal: Specifying the duration and conditions for automatic renewal or termination.
- Rent, Currency, and VAT: Setting the payment amount, currency (subject to restrictions), and tax obligations.
- Service Charges (Common Expenses): Allocation of management fees and building operational costs.
- Repairs and Maintenance: Defining responsibilities for structural vs. minor repairs.
- Alterations and Fit-Out: Rules regarding tenant improvements, permissions, and reinstatement at the end of the term.
- Sublease and Assignment: Conditions under which the tenant can transfer the lease or sublet the space.
- Default and Interest: Consequences of non-payment or breach of contract.
- Dispute Resolution: Specifying the competent courts or arbitration mechanisms.
Rent Increase and Rent Adjustment
Rent increase clauses are among the most heavily regulated aspects of Turkish commercial leases. The TBK imposes caps on annual increases (typically tied to the CPI/TÜFE rate), and purported agreements to increase rent beyond these limits may be invalid. For long-term leases (5+ years), parties may seek a "rent determination lawsuit" to adjust the rent to fair market value, regardless of the contract's increase clause. Careful drafting is required to ensure enforceability.
Termination and Eviction
Eviction is not automatic. The TBK lists specific statutory grounds for termination, such as non-payment (after proper notice), need of the landlord, or reconstruction. Relying solely on a contractual "termination for convenience" clause is often ineffective for roofed workplace leases. The process is strict and procedural.
Termination and Eviction in Practice
In practice, commercial lease disputes usually turn on (i) rent increase mechanics, (ii) evidence of default and proper notices, and (iii) whether statutory termination grounds exist. Even if a contract contains strict termination language, eviction commonly requires compliance with TBK requirements and, in many cases, a court process.
Key Points to Remember
- Rent increase clauses must comply with mandatory TBK rules; otherwise they may be unenforceable or reduced.
- Security structure matters: deposit, bank guarantee letter, or surety should be drafted for enforceability and exit.
- Termination/eviction is procedural: relying on ‘automatic termination’ language can be risky without statutory grounds and proper notice.
- Handover and fit-out should be documented: condition report, inventory, and fixtures ownership prevent disputes.
Practical Tips
To minimize disputes, parties should execute a detailed handover protocol and inventory list at the start. For international businesses, a "precedence clause" is vital if the lease is bilingual, though Turkish law governs the validity. Including a clear dispute resolution clause can also streamline future conflicts.
Disclaimer: This glossary entry is for informational purposes only and does not constitute legal advice. Commercial lease laws are complex; always consult a qualified attorney for your specific situation.
Need Expert Legal Guidance?
Our experienced attorneys can help you navigate commercial lease agreement under Turkish law.
Schedule a Consultation