Real Estate Law Series – No: II / Default in Rent Payment

Perhaps the most serious concern for a landlord is the inability to collect the rent on time and in full. When the rent is not collected within the due period, the legal actions available to the landlord vary in terms of duration and sanctions. Accordingly, the strategy to be pursued may differ in each case.

For landlords who fail to collect rent on time and in full, there are various legal mechanisms that allow them both to obtain an eviction order against the tenant and to recover their receivables. Below is an outline of the legal remedies available to landlords in cases where rent remains unpaid.

1. Enforcement Proceedings with an Eviction Request

The landlord may initiate enforcement proceedings with an eviction request against the tenant. Within this scope, based on the due rent, a payment order is sent to the tenant, warning them to pay their debt within 30 (thirty) days. If the tenant does not object to the enforcement proceedings within 7 (seven) days of service of the payment order, and also fails to pay the debt in full within 30 (thirty) days, the landlord may file an eviction lawsuit before the Enforcement Court under the simplified trial procedure.

Once 30 (thirty) days have passed from the service of the payment order, the enforcement proceedings become final. In this case, enforcement measures such as attachment may be initiated against the debtor without waiting for an eviction ruling. Based on the eviction decision rendered by the Enforcement Court, the tenant will be forcibly evicted from the property, which is then delivered back to the landlord for use.

2. Notice of Default under Article 315 of the TCO

Pursuant to Article 315 of the Turkish Code of Obligations (“TCO”) No. 6098, the landlord may serve a notice through a notary granting the tenant at least 30 (thirty) days in residential and roofed workplace leases. In this notice, the tenant is requested to pay the overdue rent and/or ancillary expenses within the given period, failing which the lease agreement will be terminated. If the tenant does not fulfill the obligation within the granted period, the landlord may file both an eviction lawsuit and a receivables lawsuit before the Civil Court of Peace.

Following the eviction ruling rendered in such a lawsuit, enforcement proceedings are initiated for the receivable determined by the court. The tenant is then evicted through enforcement, and the property is handed back to the landlord.

3. The “Two Justified Notices” Rule under Article 352/2 of the TCO

According to Article 352/2 of the TCO, if the rent remains unpaid, the landlord may serve two justified notices to the tenant through a notary. In lease agreements with a duration shorter than one year, such notices must be served within one lease term. In agreements longer than one year, the notices must be served within one lease year or longer, and for different months.

If two justified notices are served, the landlord may file an eviction lawsuit before the Civil Court of Peace within one month following the end of the lease term, without any further notice requirement.

The eviction ruling issued by the court is enforced through enforcement offices, resulting in the tenant’s removal from the property. It is important to note that the tenant’s subsequent payment of the debt after service of the notices does not prevent the formation of the “two justified notices” condition. Furthermore, in indefinite-term leases or where rent is paid annually, the “two justified notices” requirement does not apply.

4. Conclusion and Assessment

When the tenant fails to pay the rent in full and on time, thereby falling into default, the landlord has three possible legal avenues. Which path should be pursued may vary depending on the nature of the rent, the tenant’s payment habits, the tenant’s profile, and economic circumstances. Since the eviction process may take time, conducting enforcement proceedings for rent collection simultaneously can be valuable for recovery purposes.

The TCO requires landlords to grant tenants at least 30 (thirty) days to fulfill their obligations in cases of default. However, this grace period may create risks for the collection of receivables, and depending on the circumstances, it may be possible to achieve results more quickly through different enforcement actions.

In conclusion, the legal remedies for eviction due to default are limited to those listed above. As briefly explained, determining and applying the appropriate course of action based on the specific facts of the case is vital for both timing and recovery capacity when it comes to eviction of the tenant and collection of receivables.

Author

Saruhan Tunca Turhan