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Think Being a Landlord Is Difficult Here in the United States? Try it in Turkey!

Jan 19, 2015

Posted by

Charles Dahlheimer

Recognized as one of the industrys leading visionaries, Dahlheimer is publisher of The Real Estate Professional magazine and The Real Estate Executive Summary.  He co-authored Real Es Read more

An Editorial:

I just received an e-mail from a Turkish lawyer suggesting that our readers might be interested in new legislation designed to “make investing in rental property in Turkey more attractive.”  After reading the digest of the “new” Turkish laws, I realized how good we have it here in the USA. 

Here are a few highlights from that new legislation “in favour of the lessor:”

According to previous Turkish law, if a lessee fails to pay the rent two times in a lease year, an eviction lawsuit may be instituted against a lessee—but only at the end of the lease term.  So if a lessee has a ten-year lease (not uncommon in Turkey), the lessor could not initiate an eviction lawsuit until the end of the ten-year term—regardless of how many lease payments had been missed.

  In the new legislation the lessor may institute an eviction lawsuit at the end of any lease year in which the lessee fails to pay the rent two times.  So, if the lessee fails to pay rent all year long, the lessor still cannot institute an eviction lawsuit until the end of the year.

That’s when “better” is not yet “good.”

Under previous legislation, at the end of a lease term, unless the lessee had failed to make lease payments, the lessor was required to renew the lease unless both lessor and lessee agreed not to renew.  Under the new legislation, the lessor has the right to terminate the contract after the tenth renewal year, provided that the lessor serves a written notice three months prior to the expiration date of the contract.  So, if an owner signs a one-year lease with a renter, as long as the renter does not miss two payments in any given year, he has the right to renew the lease for ten years, whether the owner wants to or not.

Additional legislation, set to become effective July 1, 2020, stipulates that where the rent is payable in foreign currency, there will be no change in rent for five years. 

And a lessee that leaves the leased property prior to the expiry of the contract term shall pay a compensation for a reasonable time that the leased property remains unoccupied. In the event that the leaving lessee finds a lessee candidate under the same conditions and terms for the leased property, the lessee may be relieved of his duty to pay this compensation, even if the lessor is not willing to accept the lessee candidate.

Currently, most of lessors write very strict penalty clauses for failure of payment, usually equal to 6 months or 1 year of rent.  After July 1, 2020, the lessor will not have the right to imply penalties and acceleration clauses for the failure of timely payment.

If that doesn’t make you happy to be in the USA, I’m not sure what does!