THE IMPACT OF THE PANDEMIC ON LEASE AGREEMENTS

As markets slow down due to the coronavirus, people are either unable to run their businesses or are managing them from home. Consequently, this period results in both loss of income and the deactivation of rented business premises. In response, the law has introduced regulations to support tenants who are struggling to generate income and pay their rent. These regulations aim to prevent landlords from terminating lease agreements due to the pandemic for a specified period.

According to Temporary Article 2 of Law No. 7226 on Amendments to Certain Laws, published in the Official Gazette No. 31080 on March 26, 2020, the inability to pay workplace rent between March 1, 2020, and June 30, 2020, shall not constitute grounds for termination of the lease agreement and eviction.

In this context, the legislator has prevented landlords from filing lawsuits against business tenants for termination of lease agreements and eviction for unpaid rent arrears that arose between March 1, 2020, and June 30, 2020. However, rent arrears for the aforementioned period have not been suspended, and since landlords' receivables for rent accrued during this period continue, these receivables will consequently be subject to enforcement proceedings.

This regulation aims to prevent the eviction of business tenants who delayed rent payments between March 1, 2020, and June 30, 2020, during the pandemic.

While the regulation only prohibits termination, a tenant who cannot pay rent is considered in default due to the impossibility of paying the monetary debt and is liable for default interest. However, if they fulfill the burden of proof, they are not held responsible for the consequences of culpable default.

For more information on this matter, you can consult with our experienced lawyers.