Recent Developments Regarding Lease Agreements
WITHIN THE SCOPE OF THE ACTION PLAN FOR COMBATING THE INFORMAL ECONOMY
CURRENT DEVELOPMENTS REGARDING LEASE AGREEMENTS
Introduction
Within the scope of the Action Plan for Combating the Informal Economy (“Plan”), the Risk Analysis Directorate General of the Ministry of Treasury and Finance (“Ministry”) has developed numerous projects planned to be implemented in order to ensure the monitoring of informal income and cash flows, including the integration of lease agreements into the e-government system.
In the introduction section of this Plan, the term “informality” is defined as “the entirety of activities that are concealed from public authorities, not partially or fully recorded in official records or cannot be recorded, and therefore cannot be audited.” Although informal practices regarding lease agreements are not explicitly defined in the Plan, it is understood that the objective is to register lease relationships carried out either through dual contracts or without any written agreement at all. In the statement made by the Ministry of Treasury and Finance, it was expressed that the main purposes of executing lease agreements via e-government are to ensure the monitoring of lease agreements, to increase the reliability of lease agreements, to facilitate access to agreements in processes related to lease agreements and relationships before state authorities and judicial bodies, and to create Türkiye’s real estate value map. Although the projects mentioned in the Plan are planned to be implemented within 2025, the execution of lease agreements via e-government has been urgently put into practice, and on 04.11.2024, lease agreement preparation services were made available to citizens through the “E-Government Gateway” application.
In this article, the general terms and conditions regarding the preparation of lease agreements via e-government, the legal binding force, nature, and benefits of agreements executed through e-government are discussed.
General Conditions Regarding the Execution of Lease Agreements via E-Government
With respect to lease agreements regulated under Articles 299 et seq. of the Turkish Code of Obligations No. 6098, the legislation does not impose a form requirement. Accordingly, the parties to a lease agreement may execute the agreement verbally, in writing, or in official written form as they wish. However, with the new regulation, it is observed that the motivation is to develop an application encouraging lease agreements to be prepared via e-government.
This service is provided under the “Lease Agreement Transactions” section through the E-Government Gateway infrastructure in cooperation with the Ministry of Treasury and Finance. Through this section, lease agreements can be created step by step, and a stamped “Barcoded Document” version of the agreement can be generated through the system, enabling document verification.
It is necessary to open a small parenthesis regarding transactions to be conducted via e-government for jointly owned immovable properties. Namely, in jointly owned properties, an agreement prepared by one of the shareholders must first be approved by the other shareholders (If there is joint ownership, all shareholders; if there is shared ownership, shareholders representing the majority of shares and co-owners must approve the agreement.). After obtaining the approvals of all shareholders, the approval period of the tenant and the guarantor begins. However, it should also be noted that for lease agreements to be executed via e-government for jointly owned properties, there must be a maximum of ten shareholders. Therefore, for properties with more than ten shareholders, physical lease agreements must still be prepared and signed.
Legal Consequences and Benefits of Executing Lease Agreements via the E-Government System
The responsibility regarding all annotations and declarations on the immovable properties subject to agreements executed through this service belongs to the parties pursuant to Article 1020 of the Turkish Civil Code. The said article regulates the principle of publicity of land registry records. Accordingly, if there is any annotation or declaration on the leased immovable property, the tenant cannot claim that they were unaware of it due to the lease agreement having been prepared and approved via e-government. As stated above, the agreement executed through this service shall, upon approval by the parties, give rise to all legal consequences set forth under Articles 299 et seq. of the Turkish Code of Obligations No. 6098. All responsibility regarding the agreement belongs to the parties.
The section regarding responsibility also appears before the lessor, tenant, and guarantor during the preparation and approval stages of the lease agreement, and in order to proceed with the process, the system requires approval of the information form and the clarification text on the processing of personal data. Accordingly, in agreements executed via the platform, the tenant and the lessor undertake the accuracy of the information processed. With this application, it can be stated that issues such as forging signatures on lease agreements or eviction undertakings, or alleging the falsity of signatures, are eliminated. This is because no wet signature is affixed to the prepared agreement. If lease agreements come before a judicial authority, such authority may request the submission of the lease agreement prepared within the e-government system from the Ministry of Treasury and Finance.
In addition, while it is possible to add a guarantor to lease agreements executed via e-government, pursuant to the Turkish Code of Obligations No. 6098, surety agreements must be executed with a wet signature. Therefore, considering that guarantors are frequently included in general lease agreement practices in Türkiye, although it is possible to create a lease agreement via e-government, the surety agreement to be signed between the tenant and the person who will approve as a guarantor must be physically prepared and signed.
Finally, it is important to take into consideration that special and general terms to be included in the lease agreement; personal data of the parties; and, if the immovable property is leased as a workplace for the purpose of carrying out commercial activities, potentially commercial secrets; may, within the scope of Article 3 of the Clarification Text on the Processing of Personal Data approved at the outset by the tenant, lessor, or guarantor during the preparation of the lease agreement, be shared—where deemed necessary—within the scope of relevant legislation or signed protocols, with authorized public institutions and organizations, law enforcement authorities, courts and enforcement offices, legally authorized private law entities, related third-party natural and legal persons, service provider companies and their officials, project partners, suppliers, and support service providers.
Conclusion and Evaluation
Although no regulation has yet been made regarding the compatibility of the Plan published by the Ministry with the existing legislation, it is possible that efforts will be made in the future to integrate this application into the legislation. However, at the current stage, it is observed that necessary steps have been taken regarding the monitoring of lease agreements through the application initiated via the e-Government platform.
Sincerely,
Atabay Law Office