TÜRKİYE Law and Practice Contributed by: Serkan Gül, Nazım O Kurt and Türkay Avanaş, Hergüner Bilgen Üçer Attorney Partnership
6.23 Remedies/Damages for Breach If a tenant breaches the lease agreement, the landlord will be able to claim damages. For cer - tain breaches (like using the property against the purpose of the lease and failure to timely pay the rent), the landlord may terminate the lease agreement and evict the tenant. For eviction, the tenant has no remedy other than initiating a lawsuit or enforcement proceedings. In workplace and residential leases, security deposits cannot exceed three months’ rent. If the parties agreed on cash or negotiable instru - ments as a security, the tenant must deposit the money in a time deposit account and deposit the negotiable instruments in a bank – not to be withdrawn without the consent of the landlord. The bank may return the security only (i) with the consent of both parties, (ii) upon finalisation of the enforcement proceedings, or (iii) on the basis of a finalised court decision. If the landlord has not informed the bank in writ - ing that they filed a lawsuit against the tenant in relation to the lease agreement or that they have initiated debt enforcement proceedings within three months of terminating the lease agree - ment, the bank is obliged to return the security upon the request of the tenant. In practice, par - ties breach the law and usually decide to pay cash or deliver a bank letter of guarantee to the landlord instead of following the above proce - dure. 7. Construction 7.1 Common Structures Used to Price Construction Projects Structures used in the global market (turnkey and cost-plus-profit) are also used in the Turkish market. Turnkey structures are commonly used
in public tenders. For private deals, turnkey or cost-plus-profit structures may be used depend - ing on the commercial agreement of the parties. Moreover, a unique method that is commonly used that was created for construction to be made over private party land is known as “con - struction in return for flat”. Under this structure, the contractor constructs the building without receiving any cash payment. The owner makes the payment to the contractor in the form of a flat or flats; accordingly, the owner and contractor share the flats in the constructed building in line with a ratio determined under the agreement (eg, 55% for the owner and 45% for the contractor). The owner does not make any other payment for the construction. Revenue sharing, which is a structure that resembles ordinary partnership, has been gain - ing traction in the market recently. Revenue sharing involves the contractor taking on the construction and sale activities, and the land - owner and the contractor sharing the collected revenues in previously agreed ratios. 7.2 Assigning Responsibility for the Design and Construction of a Project Contractors assume the responsibility and construction of a project through construction agreements. However, as per the Turkish Code of Obligations, owners are responsible vis-à- vis third parties. In the event that owners are required to pay compensation to third parties, they are entitled to have recourse to their con - tractor. At the contractor level, design and con - struction work is outsourced through subcon - tractors that are hired by contractors. 7.3 Management of Construction Risk Contractors generally assume the construction risk of a project; thus, limitation of the contrac -
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