Lease contracts are continuing obligation relationships, regulated under Articles 299 et seq. of the Turkish Code of Obligations (TCO), in which the landlord undertakes to leave the use of a thing to the tenant, and the tenant in turn undertakes to pay the rent. Termination of the contract before its term, and without a justified cause provided for by law, is characterized as "unjust termination" and may give rise to compensation liability for the terminating party.
When Does Unjust Termination Arise?
A lease contract, if fixed-term, may be terminated at the end of the term, and if indefinite-term, by complying with the notice periods provided by law. Termination of the contract unilaterally and before its term, without complying with these rules, constitutes unjust termination. Particularly in residential and roofed workplace leases, the mandatory provisions of the TCO (Art. 347 et seq.) strongly protect the tenant; the landlord's ability to terminate the contract arbitrarily is significantly restricted.
Factors Considered in Calculating Compensation
While the amount of compensation that may be claimed in the case of unjust termination varies according to the specific circumstances, the following factors are generally taken into account:
- Remaining term of the contract — The period between the date of termination and the contract's natural end date is the basic reference point in the compensation calculation.
- Reasonable period within which the property could be re-let — The landlord is under an obligation to re-let the property within a reasonable period (the duty to mitigate loss); the rental loss arising during this period may form the basis for compensation.
- The tenant's moving/relocation expenses — If the tenant is the party harmed by the unjust termination, reasonable expenses arising in the process of finding a new place and moving may also fall within the scope of compensation.
- The fate of the deposit/security amount — The refund or offsetting of the security amount taken under TCO Art. 342 in the event of unjust termination is separately assessed.
The Tenant's Options for Termination with Justified Cause
A tenant may also terminate the contract for justified cause in the face of the landlord's conduct contrary to the contract (for example, the property not being delivered in conformity with the contract, defective delivery, or deficiencies significantly hindering use). In that case, the tenant is not obliged to pay any compensation to the landlord; on the contrary, the tenant may claim compensation for their own losses.
Conclusion
Compensation for unjust termination of a lease contract is determined by jointly evaluating the remaining term of the contract, the parties' duty to mitigate loss, and the specific circumstances. Since each case requires its own separate assessment, it is important that the contract text and the sequence of events be reviewed by a legal professional in order to arrive at a definitive compensation amount.
With Lawyer Services' Research tool you can scan current Court of Cassation decisions on lease contract termination within seconds, and with Create Petition you can prepare a source-backed petition draft on this matter.