Fixed-Term Lease Agreements for Residential and Roofed Commercial Premises under Turkish Law: An Analysis of Article 347 of the TCO

1. Introduction

Lease agreements are regulated under Articles 299–378 of the Turkish Code of Obligations (“TCO”) and are divided into three main categories: (i) General Provisions, (ii) Leases of Residential and Roofed Commercial Premises, and (iii) Lease of Products.

While the general provisions apply to all leases, the legislator, for socio-economic reasons, has introduced specific rules for residential and roofed commercial premises that deviate from the general regime. The primary rationale is the protection of tenants, who are generally considered the weaker party in such contracts, facing unequal bargaining power and significant challenges in securing alternative accommodation or premises in a competitive market. Accordingly, the TCO contains numerous tenant-friendly provisions, often mandatory in nature, which limit the landlord’s ability to terminate the contract and impose stricter formal requirements on termination. In this context, Article 347 TCO introduces a distinctive framework for leases of fixed-term residential and roofed commercial premises, granting tenants extensive protection beyond the expiry of the contractual term.

2. Legal Framework: Article 347 of the TCO

2.1 Overview

Under the general principles of lease law, fixed-term leases expire automatically upon the end date stated in the contract, whereas indefinite-term leases may be terminated by complying with statutory notice periods and termination dates. However, Articles 347–349 of the TCO establish a special regime for residential and roofed commercial premises, departing from this general principle.

Article 347 of the TCO provides that, in leases of fixed-term residential and roofed commercial premises, the landlord cannot terminate the contract solely due to the expiry of the agreed term. Instead, the contract is automatically renewed each year on the same terms unless the tenant gives notice to terminate. This annual renewal continues for up to ten consecutive renewal years, during which the landlord is not entitled to terminate without a statutory ground.

The landlord may only terminate during this period for the specified reasons in the TCO:

• For reasons attributable to the tenant, such as providing an eviction undertaking, non-payment of rent followed by two justified written warnings, or breach of the obligations to use the premises with due care and to respect neighbours, or

  
  

• For reasons attributable to the landlord, such as personal need for the premises or reconstruction or the bona fide personal need of a new owner.

  
  

After the ten-year renewal period, the landlord may terminate by serving notice at least three months before the end of any subsequent renewal year, in accordance with the statutory termination rules. (i.e. three months before the end of each renewal year).

For tenants, termination is possible at the end of the contractual term or any renewal year, provided they notify the landlord at least 15 days before expiry. Notices served later than this deadline are ineffective. A notice is deemed served if it reaches the landlord’s sphere of control (e.g., delivered to an employee or household member), even if not personally received. However, it should be noted that under Article 349(1) of the TCO, where the leased premises are used as a family residence, the tenant may not terminate the lease without the explicit consent of their spouse. This safeguard applies only to residential leases and is intended to protect family unity. Any termination without such consent is invalid.

Article 348 of the TCO requires that all termination notices for leases of residential and roofed commercial premises must be made in writing by both tenants and landlords. This requirement is satisfied by ordinary written form; oral notices are invalid.

2.2 Commencement of the Ten-Year Period

The starting point of the ten-year renewal protection period has been subject to doctrinal debate. Some scholars argue it begins with the execution of the lease, while others assert it starts after the initial contractual term. The prevailing opinion, supported by case law of the Turkish Court of Cassation, is that the ten-year period begins after the expiry of the fixed term, starting with the first automatic renewal year.

For example, in a Court of Cassation decision, a lease agreement dated 01.04.2004 with a ten-year fixed term expired on 31.03.2014. The ten-year protection period was deemed to have started on that date, meaning the landlord could not terminate by notice before 31.03.2024.

It should also be noted that, pursuant to the decision of the General Assembly of Civil Chambers of the Court of Cassation dated 25 May 2021, where the lessor and the lessee execute a new agreement in respect of the leased premises, even if the changes are confined solely to the term and/or the rent, such agreement constitutes a new contract. Accordingly, the ten-year period under Article 347 of the Turkish Code of Obligations commences as of the execution date of this new contract.

2.3 Mandatory Nature and Tenant Protection

Article 347 of the TCO is mandatory in favour of the tenants (a “relatively mandatory” provision). Any contractual clause granting the landlord broader termination rights than those provided by law is void. The 15-day notice period may be shortened or even removed by agreement if it benefits the tenant, but it cannot be extended against the tenant’s interest.

3. Conclusion

Article 347 of the TCO significantly alters the general principles of fixed-term leases in favour of tenants in residential and roofed commercial premises. By preventing landlords from terminating solely due to the expiry of the contractual term and by introducing a ten-year renewal protection period, the provision ensures long-term security of tenure. This regime reflects the legislator’s socio-economic policy choice to protect tenants as the weaker party, while still allowing landlords to terminate for legitimate statutory reasons. Understanding the nuances of Article 347, its interaction with Articles 348 and 349, and its mandatory nature is essential for both practitioners and parties to lease agreements, as contractual provisions inconsistent with these rules will be unenforceable under Turkish law.