What to pay attention to in a lease agreement?
- Av. Hilmi KARACA
- Mar 23, 2023
- 10 min read
Updated: Oct 16, 2023
We have compiled the important issues that you should pay attention to when signing a new lease agreement or renewing the contract in today’s world where disputes arising from lease agreements have increased considerably. This article is prepared as a guide. Therefore, by taking this guide into consideration, signing the lease agreement will prevent most of the problems that may arise later. The lease agreement is regulated in the Turkish Code of Obligations No. 6098. According to Article 299 of the Turkish Code of Obligations No. 6098, the English translation of which is as follows:
“The lease agreement is a contract in which the lessor undertakes to leave the use or benefit of something to the lessee, who in turn undertakes to pay the agreed rent for it."
Therefore, in summary, there is a primary obligation of use imposed on the lessor and a debt payment obligation imposed on the lessee in the lease relationship. With the establishment of the lease agreement, the tenant has the right to reside in the rented residence as a tenant for 10 (ten) years. Therefore, it is obvious that many problems will arise in the 10-year tenant-landlord relationship. For this reason, it is possible to prevent most of the problems at the signing stage of the contract. The lease agreement is regulated in Turkish Code of Obligations No. 6098.
CONTENTS
Why is it so important to pay attention to when signing a lease agreement or renewing the contract?
As we mentioned before, the lease agreement establishes a ten-year legal relationship. In order for this ten-year relationship to continue smoothly and not to suffer any loss of rights and benefits when the tenant-landlord relationship ends, many different issues need to be considered when signing the contract.
What is the Purpose of the Lease Agreement Signing Guide?
This guide will explain what to pay attention to when signing a lease agreement in simple terms, moving away from legal language and explaining it item by item. Since it is possible to prevent loss of rights with a simple and short explanation, we recommend that you read this guide carefully item by item.
What to pay attention to when signing a lease agreement
1- Is the tenant the owner of the property?
As you know, one of the parties to the lease agreement is the property owner. Contracts signed with people who are not property owners are not valid except for certain exceptions. Therefore, it is important to check whether the lessor is the property owner when signing contracts that you have signed as a tenant in order not to be removed from the rental later and not to pay an additional fee to the property owner due to unauthorized use.
If the person who will rent is not the property owner, you will need to check whether this person has the authority to rent the rented property. The existence of this authority appears in the following ways; If the real estate agent or a third party, with a power of attorney, If the lessor is a legal entity such as a company, association or foundation, the person who will sign the contract is the authorized representative of this legal entity, If the lessor is a person and the tenant in the rented property, the sublease authority we call sublease to someone else In these cases, the contract will be valid if you sign it with people who are not property owners. However, you need to look at whether you have the authority to sign this lease agreement. Otherwise, the contract will be invalid. When signing the contract, write the identity information of both parties, and if it is a legal entity, write the registration and tax numbers. This is also important for evidence purposes.
2- Is the address of the leased property correct in the contract?
Confirm the address of the real estate you will rent. Because if a different address is written in the contract, the real estate you rented will be the one written in the contract. If the real estate you have reviewed and looked at is at a different address, you will not have rented this real estate you have reviewed.
3- Write the rental fee and payment period in the contract.
The most important element of the lease agreement is the rent amount and the payment time of this amount. In case of incomplete payment of this amount, execution proceedings and even eviction from the rented house or workplace may be on the agenda. Therefore, we recommend that the rent amount be determined both in numbers and in writing in a way that leaves no room for doubt. Otherwise, disputes arising from here are not impossible.
4- Add that the rental fee will be paid through the bank.
Most of today’s disputes arise due to hand payment of the rent amount. Tenants who make hand payments can be subject to execution proceedings and lawsuits by property owners with the malicious statement “no rent has been paid” because they do not receive any written or signed document in return for their payments. The tenant who cannot prove that he has paid is obliged to pay the rent paid back to the landlord retroactively, and most of the time, a process leading to eviction from the house has also begun.
Therefore, to avoid being victimized, add that the rent amount will be paid through the bank to the contract. You can even include the bank account to which the payment will be made in the contract. In addition, writing an explanation such as “May Rent Amount” in the payment description when making the payment after the rental is completed will be in your favor.
5- Decide on the annual increase rate.
The rent increase rate can be determined freely by the parties. However, this freedom has been restricted by an upper limit set by the state. The rent increase rate has been limited to 25% until July 3, 2023. Therefore, the property owner cannot demand an increase above this rate in the increases to be made until July 2, 2024. The rate agreed upon in the contract above this is invalid. However, this regulation has been newly made. In the previous period, the upper limit was specified as the CPI rate by saying
“not to exceed the change rate in the twelve-month averages of the consumer price index in the previous rental year”
in Article 334 of the Turkish Code of Obligations. Here, too, the parties could freely determine a rate among themselves without exceeding this limit. However, this limit was fixed at 25% with a new regulation due to changing economic conditions.
Finally, determine the rent increase rate you set when signing the contract by considering this upper limit.
6- If you will sublet or rent to someone else, add the sublease authorization.
After renting a house or workplace, if you want to rent one or more of its rooms or all of them to someone else, you need to obtain a sub-lease authority. For this, you need to add a clause to the contract you signed that allows you to sub-lease. You cannot rent one room or all of the house to someone else with a contract that does not include a sub-lease clause. If you rent without obtaining sub-lease authority, you may be evicted by the tenant. Therefore, you need to add a clause to the contract that states that you have the right to sub-lease.
7- Write the fixtures of the property, the condition of the house with damage and paint in the contract.
Another important element that you need to add to the contract when renting a house or workplace is the inventory. Some items such as air conditioning, stove, cabinet, combi, hood, and curtain can be included as inventory in the rented property. Adding which of these inventories exists during the rental to the contract will prevent disputes that may arise when leaving the rented property. In addition, it will be beneficial to include the working and usability status of these items, which are also referred to as inventory, in the contract.
In addition to the inventory, another important element that must be included in the contract is the current condition of the property. Whether the house is painted or not, whether there is damage to places such as parquet, floor, door, window, and wall, and whether it is delivered clean and ready to move in are other elements that need to be considered. Depending on this maintenance and cleaning status, the landlord may have the right to seize the deposit paid during the rental. Transferring all the details of the house or workplace you rented to the contract as you rented it is one of the elements you need to pay attention to in this context.
8- Add the paid deposit amount to the contract.
In most rental relationships, a deposit amount is paid. However, it is generally not known that there is an upper limit to the deposit amount to be paid. The deposit amount can be determined at most as three rental amounts.
The deposit can also be agreed upon other than cash. A guarantee letter or movable property can also be agreed upon as a deposit. However, here, the limit should not exceed three rental amounts for the deposit to be determined.
To be able to get the deposit back, you must deliver the real estate you rented as you received it. Otherwise, it is not possible to get the deposit. Therefore, writing all the details we mentioned in Article 7 in detail will facilitate the return of the deposit.
9- Decide who will pay expenses such as dues.
Although all expenses are charged to the tenant in practice today, there is no legal regulation that all expenses must be covered by the tenant. Unless a contract clause is agreed upon for the transfer of natural gas, water, and electricity subscriptions to the tenant, they cannot be forced to do so. In fact, if the subscriptions belonging to the landlord are closed, it may even be impossible to deliver the rented property in a suitable condition for renting. Therefore, it is important to write in the contract who will cover the expenses such as natural gas, electricity, water, dues, apartment expenses, etc.
10- Both parties and the guarantor, if any, should sign the contract.
The rental contract is a contract with two parties, the tenant and the landlord. For the contracts to be effective, both parties must accept this contract text, in other words, sign the contract. The signature of only one party does not make the contract a valid contract. On the contrary, there is only a commitment made by one party. Therefore, for a valid contract to be based on, the signature of both parties must be found under the contract text.
In addition, another issue is that if collateral will be discussed within the scope of the contract, the signature and information of the person who will be the guarantor must also be included in the contract. Otherwise, a collateral relationship cannot be established, and the guarantor cannot be applied if the tenant does not pay the rent.
For the entire text of the contract to be valid, there must be a signature under all pages. Otherwise, it will only be valid for the page with the signature. The clauses agreed upon in the pages where the signature is not found will be invalid.
11- If the tenant will have a guarantor, all details should be specified.
If the collateral relationship is discussed in the rental contract, the duration of this relationship, the amount for which the guarantor is responsible, and all the obligations of the guarantor must be determined one by one. The signature of the guarantor must be in this contract. Otherwise, a collateral relationship cannot be established.
Collateral can also be established with a separate contract. It does not have to be included in the rental contract. However, in this case, the point to be noted is that only the obligation clause with the signature of the guarantor will be valid. In other words, if certain obligations are included in the rental contract and obligations are included in a separate collateral contract, the signature of the guarantor in the contract where the obligations are included will be valid.
12- Do not sign the Evacuation Commitment whose date is left blank!”
Recently, landlords have been signing a commitment letter under the name of Eviction Commitment Letter in addition to signing a rental contract with tenants. The Eviction Commitment Letter is essentially a commitment that will ensure the tenant’s eviction from the rented property. This commitment letter is mostly given to landlords with empty eviction and signature dates. Unfortunately, commitment letters with empty date information are being misused by landlords to evict tenants without any conditions on the date they want, provided that the date parts are filled in later.
While signing the rental contract may seem like an insignificant detail, it can cause a serious victimization that will result in eviction from the house later. Therefore, our advice is not to sign the Eviction Commitment Letter first. However, if your landlord does not rent to you, sign the same date as the date you signed the rental contract. In this case, the commitment letter is considered invalid in court decisions.
The Importance of a Lawyer in Lease Agreement
The rental contract is an important legal document that determines the rights and obligations between the tenant and the lessor. Therefore, the role of lawyers is quite important in the preparation or signing of the contract. Some important issues that should be included in the rental contract include the identity information of the parties, the address, nature and independent section number of the rented property, the rent amount, payment method and time, the rental period and extension conditions, the deposit amount and refund, the tenant’s use purpose and restrictions, maintenance-repair responsibilities, and eviction conditions and periods.
If these issues are missing or written incorrectly, disputes may arise between the parties or cause victimization. Therefore, it will be extremely useful to consult an experienced lawyer before preparing or signing the rental contract.
Draft Lease Agreement
Attention should be paid to some important issues during the preparation of the lease agreement. These are summarized as follows: details such as the determination of the rent amount, payment method and time, lease period and extension conditions, deposit amount and refund, etc. are quite important in terms of the legal nature of the contract. Therefore, every detail regarding the leased property must be handled with care when preparing the lease agreement.
There are sample lease agreements on the internet. However, their use may cause legal problems for the relevant person in the future. Because these examples are generally prepared in a standard and adaptable way to every situation, they are contracts prepared without taking into account the demands of the concrete real estate and the parties.
When preparing a lease agreement, the identity information of the parties, the address, nature and independent section number of the leased property, the rent amount, payment method and time, lease period and extension conditions, deposit amount and refund, the tenant’s usage purpose and restrictions, maintenance-repair responsibilities, evacuation conditions and periods, etc. should be specified correctly and completely. When preparing the lease agreement, legal regulations and principles should be taken into account. At this point, getting legal support from an experienced lawyer will ensure that the contract is prepared correctly and safely.
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