Contact: Ece Yilmaz; Erdem & Erdem (Turkey)
Introduction
Lease agreements are amongst the most common types of agreements, organizing property usage, as regulated under the Turkish Code of Obligations numbered 6098 (“TCO”). Authority to sublet a leased property to third parties is one of the authorizations of the TCO granted to the lessee, who is to use the property subject to the lease agreement, in lieu of a certain rent amount. Within this scope, Art. 322 of the TCO allows subleasing under certain circumstances. As per the provision in question, the lessee may fully or partially sublet the leased property to third parties, provided that he/she does not give rise to damaging modifications to the property. This newsletter article evaluates the rather complex concept of sublease that embodies various diversified views, in practice.
Legal Characteristics of Sublease
The TCO does not necessarily require the lessor to be the owner of the property; on the other hand, it enables persons other than the owner to conclude a lease agreement acting as the lessor, as well. Sublease agreements attain their scope of applications arising from this opportunity. In essence, sublease agreements are considered to be lease agreements. They are synallagmatic agreements executed via the mutual and consentaneous declarations of intent of the parties.
In accordance with Art. 322/I, “The lessee may fully or partially lease out the leased property and transfer her right of usage to third persons, given that such transaction does not give rise to any damages for the lessor”. This provision is considered as a reiteration of Art. 259 of the Abrogated Code of Obligations numbered 818 (“ACO”) and renders subleasing possible for all lease relations. Within the scope of this provision, the lessee may fully or partially lease out the leased property, given that he/she does not damage such property by any means. However, it should be noted that the sublessee shall not be able to use the subleased property for purposes other than those envisaged under the main lease agreement. The sublessee shall not make damaging modifications to the subleased property, as well. This rule, as set forth particularly under TCO Art. 322/III, is as follows: “The lessee shall be liable to the lessor if the sublessee uses the leased property for purposes other than those envisaged under the lease agreement”.This provision that governs subleases is a mandatory and unilateral provision in favor of the lessee; thus, it shall not be amended to the detriment of the lessee[1].
The Relation between Sublease and Lease Agreements
In terms of form and type, a sublease agreement is no different than a lease agreement. Despite the fact that sublease and lease agreements are similar in terms of their parties, a sublease agreement is not considered as an ancillary agreement that hinges upon the main lease agreement. A sublease agreement is independent from the main lease agreement in terms of execution and termination. Within this context, a sublease agreement shall not be affected by the invalidity of the main lease agreement.
Sublease agreements resemble lease agreements with regard to their subject, term and content. The property, being the subject matter of the lease agreement, should be the exact same property as the subject matter of the sublease agreement; or in the case of a partial sublease, it should at least comprise such property. The sublessee shall not give any undertaking via sublease, other than those stipulated under the lease agreement. Similarly, the term of the sublease agreement shall be limited to the term of the lease agreement. With respect to content, the provisions of the lease agreement shall also be applied to both the sublessee and the sublessor.
Parties of the Sublease Agreement
In a sublease transaction, the usage of a leased property is transferred to a third person by the main lessee. Pursuant thereto, in sublease transactions, such lessee of the main lease agreement is called the sublessor, and such third person is called the sublessee. A sublease relationship is formed and established between the sublessor and the sublessee; thus, it does not affect the relationship between the lessor and the lessee of the main lease agreement. Consequently, in principle, it can be stated that no contractual relation is formed between the main lessor and the sublessee.
Sublease of Residential Premises and Covered Workplaces
TCO Art. 322/I endows the lessee with the authority to sublet the property in all types of lease agreements. Within this context, the lessee is vested with the freedom to lease out the leased property to third persons. However, such freedom to lease out is interpreted quite narrowly with regard to certain lease types, such as the leasing of residential premises and covered workplaces, as well as usufruct leases.
Article 12 of the Law Pertaining to Real Estate Leases numbered 6570 (“LPREL”) embodies the provision of “Lessee shall not partially or fully lease out the leased property or transfer the right of usage or agreement to use, unless otherwise is envisaged in the lease agreement…”. Within this context, during the validity period of the ACO, a sublease was prohibited for residential premises and covered workplaces, unless otherwise was agreed to in the lease agreement.
As opposed to this provision under the LPREL, the TCO currently requires permission of the main lessor in order to execute a sublease agreement for residential premises and covered workplaces. As per Art. 322/II of the TCO, “the lessee shall not sublet the leased property and shall not transfer the right of usage to third persons in residential premises and covered workplaces, unless the written permission of the lessor is obtained”. On the other hand, the parties may eliminate this sublease provision, subject to the permission rule via the lease agreement, given that such elimination is not to the detriment of the lessee. Consequently, while it is necessary to explicitly allow subleasing in the lease agreement, during the validity period of the LPREL, currently, solely the written permission of the lessor is required as per the TCO.
If the parties prescribe under their lease agreement that the lessor’s permission is required for the establishment of a sublease, the main lessor shall object to such sublease if and only valid reasons thereof are established. Otherwise, the lessee may request a court order allowing the establishment of sublease. The court order rendered in such a case shall be deemed to be the consent of the lessor[2].
The application scope of the sublease prohibition for residential premises and roofed workplaces is quite contradictory among academics and within the practice. According to the prevailing view, the cases in which the lessee gets married and commences cohabitation with his/her spouse, accommodates his/her sibling(s) in her property[3], or gratuitously hosts a family member or a close friend as a guest, permanently or temporarily, in the leased property, shall not be counted as a sublease. Such types of temporary accommodations are usually considered to be commodatum or fulfillment of a moral obligation[4]. Nonetheless, accommodation of a distant relative or an acquaintance, for a certain period of time, is usually considered as a sublease.
Conclusion
A sublease, which is a quite common concept in both leases of residential premises and covered workplaces, and in any other lease types, is regulated under Art. 322 of the TCO. Sublease agreements that share similar features with lease agreements in terms of subject and parties, are in fact separate lease agreements themselves. Despite their independent nature, it should be considered that sublease agreements are limited to the terms of the main lease agreements, and no undertakings exceeding those indicated under the lease agreement shall be granted via sublease agreements.
