Memorandum Regarding Temporary Regulation Introduced With Regards To Workplace Lease Agreements As Per The Law On 7226
As known, COVID-19 pandemic that has been effective in the whole world has adversely affected Turkey as well and the government has taken significant precuations including closing of certain workplaces. Since activities of most workplaces, especially the shopping malls, have been effected due to COVID-19 pandemic, most of the workplaces have been temporarily closed as per the government decision or at their own discretion.
As per the Law on Amendment on Certain Laws No. 7226 (“Law”) that has been published in the Official Gazette dated 26.03.2020 and numbered 31080, certain additional measures have been taken against the adverse effects of COVID-19 on economic life.
As per the temporary article 2 of the Law, it is stated that failure of payment of rent during the period between 01.03.2020 and 30.06.2020 shall not constitute a reason for termination and evacuation of workplaces. This is a very significant regulation because as per the Law on Code of Obligations, liability to pay the rent is the main obligation of the tenant. In case the tenant does not pay the rent on time, the landlord may: (i) serve a written notice to the tenant and provide at least 30 days remedy period for payment by stating that if such violation occurs twice in a lease year, it may request evacuation of leased property by filing a lawsuit at the end of lease term or (ii) send a payment order to the tenant by way of execution proceedings and in case the tenant does not make the payment within 30 days period in the payment order, it may have the leased property evacauted by way of execution proceedings.
According to regulation introduced by Temporary Article 2, in case the tenant does not pay the rent amounts of March, April, May and June 2020, the landlord will not be able to apply to the above mentioned methods against the tenant. However we believe that purpose of this regulation is not elimination of payment liability of the tenant with regards to March, April, May and June 2020, but the aim of the regulation is exclusion of default of tenant from the scope of evacuation reasons for a temporary period. In this regard, we believe that if the tenant does not pay rent during this time period, the landlord will not be able to apply to above mentioned evacuation/termination methods,payment of penalties and interests relating to default stated in the agreement can be requested.
On the other hand, note that with regards to workplaces located in shopping malls, although there is not any decision made by the government for closing of shopping malls, considering there is a temporary closing decision relating to certain workplaces and there are tenant that have become
obliged to close their workplaces due to actual stage (even if they are not within the scope of closing decision), we believe that COVID-19 outbreak can be deemed force majeure for such tenants and therefore, they may claim that their payment obligations should be suspended due to force majeure. However, this interpretation is not a result of Temporary Article 2, it is independent therefrom.
Temporary Article 2 or another article of the Law does not introduce any regulation with regards to common expenses. We believe that the landlord may continue to request the tenant to pay common expenses by applying a discount in proportation to the decreased common expenses. However, we cannot foresee the court decision to be made in case of any dispute beforehand.