THE IMPACT OF THE COVID-19 EPIDEMIC ON LEASE AGREEMENTS 2 April 2020

The Covid-19 epidemic, which started to take effect in our country, continues to be effective in all aspects of the economy in addition to its effects in the field of health. Within the content of the measures taken in this regard, with the Circular dated 16.03.2020, issued by the Ministry of Internal Affairs; the activities of the theater, cinema, show center, concert hall, cafeteria and all kinds of indoor playgrounds, tea garden, SPA and sports centers have been temporarily stopped.

Along with the measures taken, the question arises how the lease relations between the owner and the tenant will be affected. In this context, the impact of the new type of corona virus epidemic on lease contracts should be evaluated within the framework of Turkish Law.

THE LEASE PAYMENT DEBT OF THE BUSINESSES WHOSE ACTIVITIES ARE STOPPED UNDER THE CIRCULAR.

In the Article 136 of the Turkish Code of Obligations; It was regulated that the debt, which could be executed during the establishment of the lease contract, became impossible after the contract was established. According to the article in question; If the debt becomes impossible without the debtor's fault, the debt relation will end.

In this respect, it can be mentioned that it is impossible for businesses, whose activities are temporarily suspended by public authorities, to fulfill their lease obligations undertaken with a lease agreement if the current situation continues for a long time. So at this point, suspension of contracts may come to the agenda.  However, if this situation continues for a long time, it may be possible to terminate the contract as it becomes unbearable for the owner.

Since lease contracts are contracts that charge debt on both sides, in the event that the tenant gets rid of the rental fee from the payment debt, the owner's debt to keep the leased property will not continue.

However, whether it is impossible to execute the lease payment debt arising from the lease agreement, it should be evaluated separately in terms of each concrete event and it should not be concluded that the lease payment debt has disappeared for all businesses whose activities are suspended under the Circular.

THE LEASE PAYMENT DEBT OF THE BUSINESSES IN THE SHOPPING CENTERS

As it is known, in the above mentioned Circular, there is no regulation regarding the businesses within the shopping centers. However, many businesses have temporarily stopped their activities due to the measures they have taken or their activities have not continued as before because people stay at home.

It is also necessary to determine how the lease relations will continue in these activity cessations that are not covered by any Circular. When the legislation is examined in this regard, it is thought that the concept of “hardship” should be examined rather than the “force majeure” concept.

According to the Article 138 of the Turkish Code of Obligations, for the emergence of the concept of "hardship";

• Unforeseen by the parties when the contract is established,

• Not caused by the debtor,

• After emergence, there must be a reason that makes it difficult to perform the debt.

Under these conditions, the owner may be asked to discount the lease and adapt the contract to the new conditions.

At this point, considering the principle of equity, necessary conditions must be determined in order to prevent commercial lifefrom interrupting.

On the other hand, in accordance with the Provisional Article 2 of the Law Amending Some Laws published in the Official Gazette dated March 26, 2020, it is regulated that the termination of lease contracts or evacuation of the real estate cannot be requested due to the failure to pay the workplace rents to be processed from 1/3/2020 until 30/6/2020. With this arrangement, the discussions about the effect of the new type of corona virus on rental agreements seem to be suspended for a while.

However, based on the regulation in question, it should not be concluded that the lease payment liability has completely disappeared, as explained above, this issue should be evaluated separately for each lease contract.

As a result, in the evaluation of the lease relations of the businesses with the owners; all the economic negative effects and conditions to which these businesses are exposed should be examined.

On the other hand, the risks that may arise in terms of the owner can be analyzed and measures such as suspension of contracts for a while or adaptation of contracts can be taken to prevent commercial activities from reaching the point of obstruction.

As a result; it is important to determine the direction of the lease relations by evaluating to what extent the epidemic measures affect the lease relations.