We would like to share our legal assessments regarding the impacts of Covid-19 on commercial lease agreements. This document is prepared to provide general information. Each specific case has its own legal consequences; therefore, we highly recommend you consult with a lawyer before taking any action.

1. A: Maslak Mah. Ahi Evran Cad. Polaris
Plaza No:21 Kat:15 D:63 Sarıyer-Istanbul,
Turkey
T: (+90) 212 246 11 19
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13.04.2020
Impacts of Covid-19 Pandemic on Commercial Lease (Rental) Agreements in Turkey
We would like to share our legal assessments regarding the legal impacts of Covid-19 pandemic
on commercial lease (rental) agreements in Turkey. This document is prepared to provide
general information on the subject. Since each specific case has its own unique legal
consequences, we highly recommend consulting with a lawyer before taking any action.
1. Commercial Lease Agreements of the Workplaces Closed Mandatorily
According to the Circular published by the Ministry of Interior of Turkey on 16.03.2020, all
theatres, cinemas, show centres, concert halls, engagement/wedding halls, restaurant/cafés with
music or live performance, clubs, pubs, taverns, coffeehouses, cafeterias, countryside gardens,
hookah cafes, internet cafes, playrooms, clubhouses, amusement parks, swimming pools, SPAs
and gyms are required to be temporarily closed.
Regarding the above-mentioned workplaces that are closed according to the said Circular, the
legal concept of “Impossibility of Performance” can be discussed. As per Article 136 of the
Turkish Code of Obligations (“Code of Obligations”), in the case where the obligor is unable
to perform its obligations due to reasons that cannot be imputable to him/her, then the obligor
shall be released from such obligations.
Although it is strongly recommended to conduct a separate assessment specific to each concrete
situation; we are of the opinion that since the landlord is unable to keep the leased property
available for the use of the lessee as it is closed by an administrative order, the lessee’s
obligation to pay the rent will end as long as the workplace is kept closed under the Circular.
In this context, it is also important to review the terms of the lease agreement regarding the use
of the leased property. Accordingly, if the parties have not specifically agreed that the leased
property shall be used strictly in the form of a business that is specified in the Circular (e.g.
restaurant); it will mean that the leased property can still be used in another form and the
landlord still fulfils its obligation to keep the leased property available for use. Hence, the lessee
will still be obliged to pay the rent. Consequently, in such case, it may be more appropriate to
consider the concept of “hardship” in the performance of the obligations, instead of the
“impossibility of performance” as explained below.

2. A: Maslak Mah. Ahi Evran Cad. Polaris
Plaza No:21 Kat:15 D:63 Sarıyer-Istanbul,
Turkey
T: (+90) 212 246 11 19
W: www.oaulegal.com
2
Having said that, if it is contemplated not to pay the rent for a workplace that cannot be used
due to the ban under the Circular, evaluating each concrete situation separately and, if possible,
first reaching a written agreement with the landlord about partial payment,
postponement or non-payment is strongly advised.
According to the Law on Amendment of Certain Laws numbered 7226 (the “Law”), non-
payment of the rent during the period between 1 March 2020 and 20 June 2020 will not
constitute a reason for the termination of the lease agreements and eviction by the
landlord. If the workplaces are still kept closed after 30 June 2020 mandatorily under the
aforesaid Circular, then the termination of the agreement can be considered as per the general
provisions of the Code of Obligations (Impossibility of Performance), and the special
provisions under the Code of Obligations (which will enter into force as of 1 July 2020)
regarding the extraordinary termination of the lease agreement.
Considering the fact that the ban enforced by the Circular is hoped to eventually be lifted and
the lessee will be able to use the leased property at some point, the Covid-19 pandemic can then
be assumed to create “temporary impossibility of performance of the agreement”. According to
the Court of Appeals precedents, in temporary impossibility situations, the contractual parties
are expected to be kept bound by a contract for a certain period specific to each case (such
period defined as toleration period) before proceeding with termination. If such period expires,
then the lease agreement will no longer be binding on the parties.
In this regard, during the pandemic, it is advised that the parties should first consider the options
such as non-payment of the rent or reduction in the rent for a certain period, before proceeding
with termination. Any attempt to carry out such options first will also strengthen the legal
arguments for termination before the courts.
2. The Workplaces Which Are Not Subject to The Circular, Yet
Significantly Affected by Covid-19
The workplaces which do not fall under the scope of the Circular are not required to be closed
(unless there is a specific quarantine situation regarding the leased property in question).
Therefore, for such workplaces, the landlord will still be obliged to keep the leased property
available for the use of the lessee and in return, the lessee will still be obliged to pay the rent.
However, there is no doubt that Covid-19 pandemic has affected many businesses adversely
especially financially. In this respect, those places which are closed voluntarily for the sake of
lowering costs due to the significant fall in their businesses, or even those which are closed as

3. A: Maslak Mah. Ahi Evran Cad. Polaris
Plaza No:21 Kat:15 D:63 Sarıyer-Istanbul,
Turkey
T: (+90) 212 246 11 19
W: www.oaulegal.com
3
a precaution only for health concerns, may consider Article 137 of the Code of Obligations
titled as “Partial Impossibility of Performance” or Article 138 titled as “Hardship”.
According to Article 137 of the Code of Obligations; if the performance of an obligation
becomes partially impossible, the obligor will only be released from its obligations for the part
which has become impossible. However, the debt will cease to exist entirely if it is evidently
understood from the available circumstances that the parties would never enter into such a
contract/deal, had this partial impossibility been foreseen in advance.
According to Article 138 of the Code of Obligations, the parties to a contract may request from
the court (i) adaptation of the agreement, and if such adaptation is not possible, (ii) termination
the agreement; provided that following conditions occur:
• There is an extraordinary situation that the parties could not foresee or are not expected
to foresee at the execution of the agreement,
• Such extraordinary situation does not result from the actions of the obligor,
• As a result of such extraordinary situation, the conditions existing as at the execution date
of the agreement have changed to the detriment the obligor and it cannot be expected from
the obligor to perform its obligations due to the principle of good faith,
• If the obligor has not yet performed its obligations or if the obligor has performed its
obligations by reserving its right,
In light of our explanations above, we highly recommend the lessees of the voluntarily
closed or adversely affected workplaces to reserve their rights by stating so in the
explanatory sections of the bank transfers while making their rental payments, in order
to be able to file a lawsuit of adaptation or non-payment in accordance with the Code of
Obligations.
As we have stated before, each case should be specifically evaluated before taking any action.
Undoubtedly, there will be different consequences in terms of workplaces that are closed
voluntarily due to health precautions and that are closed due to significant loss of business
revenue.
Apart from the above, it is always recommended that parties first try to reach an agreement in
writing for reduction in or postponement of the rent.
Lastly, the abovementioned Law will also apply to the workplaces which do not fall under the
scope of the Circular. Accordingly, non-payment of the rent during the period between 1
March 2020 and 20 June 2020 will not constitute a reason for the termination of the lease

4. A: Maslak Mah. Ahi Evran Cad. Polaris
Plaza No:21 Kat:15 D:63 Sarıyer-Istanbul,
Turkey
T: (+90) 212 246 11 19
W: www.oaulegal.com
4
agreements and eviction by the landlord. However, as a rule, for such workplaces, if the
lessee does not make any payment to the landlord, then the lessee will be obliged to pay the
rent with a default interest in future, as long as the obligations of the parties remain binding and
performable. We would like to state however that due to the Covid-19 pandemic, all execution
proceedings are currently stopped until 30 April 2020 and unless the deadline is extended, the
landlord will be able to make these claims after 30 April 2020.
3. Workplaces Which Are Not Within the Scope of the Circular but
Closed due to the Health Precautions
As explained above, each situation should be assessed specifically in order to determine
whether Article 138 of Code of Obligations will be applicable. In principle, for such workplaces
that are closed voluntarily only for health precautions, the obligations of the lessor and the
lessee will continue if and as long as there is not any specific quarantine requirement or a nation-
wide curfew.
We would like to once again state that if the parties fail to agree on a reduction or postponement
of the rent and if the lessee is willing to file an adaptation lawsuit as explained above; it is
highly recommended to make the rental payments by indicating a reservation, in order to
be able to file an adaptation claim under Article 138 of the Code of Obligations.
Öncel, Aydın & Uygun Attorney Partnership