Rights of the New Owner and the Lessee in case of Transfer of a Rented House

Lease agreement is a type of contract under which the lessor undertakes to abandon in favor of the lessee the use of a thing or benefitting from that thing along with the use and in return, under which the lessee undertakes to pay the rent agreed between the parties. Lease agreement does not constitute an impediment against transfer of the ownership. As a matter of fact, pursuant to the principle of relativity of contracts, a lease agreement creates consequences only between the parties to the agreement; and within this context, it should have been possible for the new owner, who has acquired the leased property after the lease agreement is established, to request for handover of the leased property by resting on his right to property. However, in order to protect the lessees that are in a weaker position, the lawmaker prescribes in the article 310 of the Turkish Obligations Code numbered 6098 (“the Code”), that the transfer of the leased property after the lease agreement is established shall make the new owner a party to the lease agreement. Thus, the lessee will be able to request also the new owner to fulfil his contractual obligations, and particularly the obligation to keep the leased property in a convenient condition. Nonetheless, the lessee remains obligated to fulfill his contractual obligations under the same terms and conditions of the lease agreement between the lessee and the former lessor. However, if the lessee finds out that the new owner has become a party to the agreement, the lessee should pay the rent to the new owner; otherwise, the consequences of the lessee’s default will take place.

The Code contains a special provision which enables the leased property’s new owner to terminate the lease agreement, in the leases of residential premises and roofed workplaces. As the party to the agreement, the new owner has the termination possibilities held by the former owner; however, in addition to this circumstance, the new owner may request for eviction of the leased property due to need, by virtue of the article 351 contained in the Turkish Obligations Code. It is not legally possible for the new owner’s request for eviction, due to need, to take place by means of a declaration directed to the lessee; it is necessary for this right to be exercised through litigation.

Under the article 351 of the Turkish Obligations Code; if the person, who subsequently acquired a leased property, has to occupy the leased property due to the need of house or workplace for himself, for his spouse, for his descendants, for his lineal ancestors or for other individuals namely his dependants as required by the laws, this person may terminate the lease agreement by means of a lawsuit that he shall file six months later, provided that this person notifies the lessee of this circumstance in writing within one month of the date of acquisition of the leased property. Likewise, the person, who subsequently acquired the leased property, may optionally exercise his right to terminate the agreement due to need, by means of a lawsuit that he shall file within one month as from the expiration of the agreement. After that, in both cases, the lease relationship will terminate upon the eviction decision rendered by the court becomes final.

The matter of such need for a house or workplace is assessed separately depending on the circumstances pertaining to each concrete case. In one of its decisions, the Supreme Court of Appeals ordered that the assertion of need is sincere in case the workplaces, for which the request for eviction is submitted, are in a condition which is more revenue-generating and more advantageous in terms of location, than the workplaces where activities are currently carried out by the persons in their capacity as owner and lessee (The 6th Civil Chamber of the Supreme Court of Appeals, the decision dated 23.06.2011 and numbered 1625/6900). In another decision, the Supreme Court of Appeals states that the fact that the plaintiff is rich shall not constitute an impediment against him to work and states that this fact shall not be used as evidence for proof of insincerity (The Assembly of the Civil Chambers of the Supreme Court of Appeals, the decision dated 13.5.1992 and numbered 1992/6-228 E., 1992/318 K.)

Furthermore, the Supreme Court of Appeals ordered that it is not legally possible to request for eviction on the ground that there is a considerable distance between the plaintiff’s house and the plaintiff’s workplace in a city where all kinds of transportation possibilities are provided, and since the cases of a temporary need which is not continuous or of a need which has not arisen yet or whose occurrence is dependent on a long period of time, or the case where the plaintiff wishes to transact a second business though the plaintiff currently transacts a business which the plaintiff does not wish to discontinue, or the case where the plaintiff’s daughter needs a house due to the pending lawsuit of divorce between the plaintiff’s daughter and her spouse (merely on this ground), or the case where the plaintiff is currently residing at his own house which is located nearby, has the surface area the same as and has the heating system similar to the real estate for which the request for eviction is submitted shall not be considered as a compulsory need.

In this regard, the article 355 of the Code contains another provision which protects the lessees. Pursuant to this provision; in case the owner, who has terminated the lease relationship due to need, rents out without a justifiable reason the leased property to a person other than his former lessee within three years, the owner shall be obliged to pay his former lessee an indemnity in such an amount not less than the one-year rent paid to his former lessee in the last lease year. Such justifiable reason referred to in the provision shall be assessed by taking into consideration the facts and circumstances in the concrete case as stated above. Furthermore, for the leases of residential premises or workplaces, in case the lease agreement has been inserted as an annotation into the register of title deeds, the new owner who has taken over the real estate shall not be entitled to terminate the agreement for reasons e.g. need, and shall be obliged to put up with the use of the leased property for the duration of the annotation.

In conclusion, as opposed to the former Turkish Obligations Code, the Turkish Obligations Code numbered 6098 abolishes the rule that the sale eliminates the lease. Within this framework, in case of transfer of a leased property, the lease agreement may not be terminated easily, the new owner will become a party to the agreement and thus, shall be obliged to fulfill his obligations arising therefrom. In these provisions which are appropriate for the protection of the lessees; with regard to the leases of residential premises or workplaces, the right to file an eviction action is also granted to the new owner in case the new owner needs to use the leased property, and the interests of the new owner are also taken under protection to some extent in this way.