TÜRKIYE Law and Practice Contributed by: Serkan Gül, Nazım O Kurt and Türkay Avanaş, Hergüner Bilgen Üçer Attorney Partnership
6.5 Rent Variation As per the Turkish Code of Obligations, if the rent is agreed to in TRY, the rent may be increased according to the consumer price index (12 months’ average), but not higher. Rent may not be increased within the first five-year period if the rent is agreed to in foreign currency. 6.6 Determination of New Rent If the parties fail to mutually agree on a new rent - al amount, either of the parties can apply to the court to render a new rental amount according to the market price at the end of each five-year lease term. 6.7 Payment of VAT If the lease property is part of a commercial enterprise or is owned by a limited liability com - pany/corporation, VAT is applicable at 20% of the rent. Withholding tax is applicable to com - mercial entities for leases of natural person- owned real estate. 6.8 Costs Payable by a Tenant at the Start of a Lease A commission to the real estate agency and a deposit to the real estate owner are generally paid by the tenant at the start of a lease as per current market practice. 6.9 Payment of Maintenance and Repair The areas used by several tenants, such as car parks, gardens or swimming pools, are classified as common areas, and expenses arising out of the use of these areas are divided among ten - ants according to certain criteria (eg, land share,
under certain conditions. This legislation applies to lease agreements where the lessor is a foreign capital company, but it is still possible to denom - inate rents in foreign currency in lease agree - ments where the tenant is a foreign real person, a foreign company, or a company owned by for - eign investors. 6.4 Typical Terms of a Lease There is no minimum or maximum limit for lease terms. In practice, the terms of leases for residen - tial property are generally agreed to as one year, compared to five years or more for commercial assets. The owner of the real estate should carry out the structural maintenance, while the lessee is responsible for daily maintenance. Parties may contractually agree otherwise. The parties generally agree to the frequency of rental payments as a monthly payment, but the parties may also determine the term of rent as quarterly or annually. In commercial leases, rent may be expressed as a fixed amount or as a fixed percentage of revenues derived from the use of the property. Market practice tends to combine the two, with payable rent being set at whichever of the two is higher. It is also customary to introduce force majeure clauses in lease agreements. Before the COV - ID-19 pandemic, most force majeure provisions addressed the risk of leased property being damaged by an act of God, in which case the lessor is relieved from its duties to keep the prop - erty in operable condition. Now that the market has suffered the effects of the pandemic, lease agreements entered into recently include pan - demics as a force majeure event to the extent that they preclude the tenant from using the leased property.
square-metre size of property). 6.10 Payment of Utilities and Telecommunications
If the building housing the premises has been converted to condominium use, then each tenant
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