Commercial Leases in Türkiye: Rent, Renewal, Assignment and Exit

A commercial lease is often negotiated as though the principal variables are rent, term and square metres.

Those are important terms. They are not the whole legal relationship.

For a retailer rolling out a brand across Türkiye, a hotel operator or a restaurant, the lease may determine whether substantial fit-out expenditure can be recovered over a commercially viable period. For an investor purchasing an income-producing building, the tenant's statutory rights may be more important to valuation than the expiry date printed on the agreement. In an acquisition of an operating business, a strategic lease may be an asset that cannot simply be transferred with the rest of the enterprise.

Turkish law adds another layer. Where premises fall within the regime governing residential and roofed workplace leases (konut ve çatılı işyeri kiraları), the Turkish Code of Obligations No. 6098 ("TCO") contains mandatory rules concerning rent, security, renewal, assignment and termination. Those rules can apply to leases negotiated between sophisticated commercial parties and, in several respects, override contractual provisions that would otherwise appear entirely ordinary in an international lease.

The first task is therefore not to interpret the rent clause.

It is to establish which lease regime governs the premises.

1. The character of the premises determines the legal regime

A property used for business is not necessarily a "roofed workplace" merely because buildings exist on the site.

This distinction has practical consequences because the special regime in Articles 339 and following of the TCO does not apply identically to every lease of commercial land, industrial property or mixed premises.

The Court of Cassation addressed the issue directly in its 3rd Civil Chamber decision E. 2025/4986, K. 2026/3318 of 21 May 2026.

The property in question was used as a ready-mixed concrete facility and included administrative and operational structures together with substantial open areas. The lower courts treated it as a roofed workplace and determined the rent under Articles 344 and 345. The Court of Cassation reversed because the evidence did not adequately establish the property's predominant character (galip vasıf). It required a new examination of the size and character of the structures, whether they were fixed or movable, the extent of the open land and the actual purpose for which the premises were used.

That approach is relevant well beyond concrete plants.

Industrial compounds, logistics yards, petrol stations, outdoor storage facilities, agricultural businesses and mixed land-and-building arrangements can all require a classification exercise before the parties know whether the special roofed-workplace rules govern their dispute.

The point is easy to overlook in drafting. It becomes much harder to overlook once the classification determines the rent regime, termination rights or even the arbitrability of the dispute.

2. Commercial parties do not have unlimited freedom of contract

Turkish law does not reserve mandatory lease protections for residential tenants.

For a period after the TCO entered into force, several provisions were postponed in workplace leases where the tenant was a merchant or a private or public legal entity. That eight-year transitional period ended on 1 July 2020. The Court of Cassation has expressly recognised that the postponed rules, including the statutory rent regime, have since become applicable to qualifying commercial leases.

This has direct consequences for lease drafting.

Article 346, for example, prevents a landlord in the roofed-workplace regime from imposing prohibited payment obligations beyond rent and ancillary expenses. Clauses providing that future rent instalments automatically become due merely because one instalment is late, or imposing a contractual penalty for non-payment of rent in the manner prohibited by the provision, are ineffective notwithstanding the parties' commercial sophistication.

Security is regulated as well. Under Article 342, agreed security for a residential or roofed workplace lease may not exceed three months' rent. Where the security consists of money or negotiable securities, the Code prescribes a banking mechanism intended to prevent unilateral release of the security. Other forms of security (including bank and corporate guarantees) need to be analysed according to their own legal structure rather than simply assumed to be identical to a cash deposit.

The broader drafting lesson is important for international groups operating in Türkiye. An English, US or continental European precedent cannot safely be translated and used on the assumption that sophisticated commercial parties are free to reproduce the same default, acceleration and security mechanics in Türkiye.

The starting point must be the Turkish statutory regime.

3. Rent review changes materially after the fifth year

For roofed workplaces, Article 344 regulates the rent payable in renewed periods.

An agreement concerning the increase applicable during a renewed rental period is effective only within the statutory ceiling based on the twelve-month average change in the consumer price index. Where the parties have not agreed an increase mechanism, the court determines the rent within the statutory framework, taking the condition of the premises and equity into account.

The legal position changes once the five-year point is reached.

For leases longer than five years, or leases renewed after five years, Article 344 permits a broader rent determination. The court considers not only the twelve-month CPI average but also the condition of the property, comparable rents and equity. The same broader reassessment becomes available at each subsequent five-year interval.

That distinction is commercially significant.

Suppose a retailer entered a flagship lease when a district was only beginning to develop. Ten years later, comparable premises may command rents several times higher than a rent produced by historical indexation alone. Article 344 does not require the relationship to remain detached indefinitely from the actual rental market.

The evidence, however, matters.

A credible comparable-rent analysis should examine premises that are genuinely comparable in location, area, permitted use, visibility, frontage, accessibility, physical condition and commercial characteristics. Asking prices taken from online advertisements rarely answer all of those questions.

There is also a timing issue under Article 345. A landlord seeking to have a judicially determined rent apply from the beginning of a particular new rental period must pay close attention to the statutory filing and notice rules. A good market-rent case managed against the wrong calendar can have a materially different economic result.

For institutional landlords and tenants with substantial portfolios, the five-year rent-review dates should therefore be treated as asset-management dates rather than litigation dates.

4. The currency of rent is a separate regulatory question

International lease negotiations often begin in euros or US dollars.

That does not mean the rent can necessarily be documented that way in Türkiye.

Under Türkiye's foreign-exchange protection regime, persons resident in Türkiye are, as a general rule, prohibited from agreeing the consideration and related payment obligations under leases of real property located in Türkiye (including residential and roofed workplace property) in foreign currency or by reference to foreign currency, subject to the exceptions contained in the applicable communiqué. The Ministry of Treasury and Finance reaffirmed that rule in its official guidance in 2024.

The exceptions matter and can turn on matters such as the status of the parties or the nature and use of the property. The current text of Communiqué No. 2008-32/34 and the Ministry's implementation guidance should therefore be checked when a foreign investor, foreign-controlled structure, hotel operator or other business proposes a foreign-currency rent.

This issue should be kept conceptually separate from Article 344.

One set of rules concerns what currency the parties may lawfully use.

The other concerns how rent may change during the life of a qualifying lease.

A lease needs to comply with both.

5. The contractual expiry date may tell a landlord surprisingly little about possession

A fixed term has a different effect in a roofed workplace lease from what many commercial investors expect.

Under Article 347, the tenant may prevent renewal by giving notice at least 15 days before the end of the fixed term. If the tenant does not do so, the lease renews for another year.

The landlord, by contrast, cannot ordinarily recover possession simply because the agreed fixed term has expired.

After the original fixed term, the Code gives the tenant a ten-year statutory extension period. Once that period has been completed, the landlord may terminate at the end of a subsequent extension year without establishing one of the specific statutory causes, provided written notice is given at least three months before the relevant extension year ends.

The Court of Cassation's decision E. 2025/4720, K. 2025/5281 provides a useful example. A five-year lease had begun in August 2004. The initial term expired in 2009, after which the statutory extensions ran. The ten-year extension period was completed in 2019, enabling the landlord subsequently to rely on Article 347, subject to the required timing and notice.

This should be part of acquisition due diligence.

A purchaser examining a building subject to a commercial lease should not record "lease expiry: 2028" and assume vacant possession follows in 2028.

The original term, extension history and statutory termination position need to be calculated separately.

Earlier recovery may still be possible

The landlord does not necessarily have to wait for Article 347.

Article 350 permits termination in defined circumstances, including genuine need for residential or workplace use and substantial reconstruction or redevelopment that makes continued occupation impossible. Turkish case law requires the asserted need to be genuine and sufficiently established rather than speculative or temporary.

Recent jurisprudence adds an important contractual nuance. The Court of Cassation held in 2025 that if the landlord has voluntarily agreed in the lease to an additional advance notice requirement benefiting the tenant, compliance with that contractual notice condition may remain necessary even though the landlord is proceeding under Article 350. Failure to give the promised notice can result in another renewal.

Need-based termination also carries consequences after possession has been recovered. Article 355 restricts re-letting following certain needs-based and reconstruction evictions and provides protection to the former tenant where those restrictions are breached.

A needs claim should therefore not be used as a convenient substitute for a commercial desire to replace an old tenant with a higher-paying one.

6. Buying the building means buying the lease relationship as well

Sale of the property does not ordinarily extinguish the lease.

Article 310 provides that where ownership changes after the lease has been established, the new owner becomes a party to the lease relationship.

This rule has obvious implications for investment underwriting.

A purchaser can acquire clean registered title to the real estate and still acquire an economically unattractive or long-duration lease that significantly restricts immediate use of the asset.

Article 351 gives a purchaser a particular needs-based termination route, but its procedural conditions are strict. Where the new owner intends to rely on the special six-month mechanism, the acquisition and need must be notified to the tenant in writing within one month of acquisition.

The Court of Cassation applied that requirement strictly in a 2025 decision. The property was acquired on 9 December 2022, but the written notice reached the tenants only after the one-month period. The resulting Article 351(1) eviction claim should therefore have been rejected.

This is precisely the sort of issue that should be identified before completion.

If the purchaser's business plan depends upon recovering possession, the transaction team needs to know whether the legal route to possession actually exists, and what must happen immediately after title transfers.

7. Assignment becomes critical when the tenant's business changes hands

Commercial leases often become most valuable when the underlying business is being sold.

Article 323 provides that the tenant may not transfer the lease relationship without the landlord's written consent. In a workplace lease, however, the landlord may not withhold consent without just cause.

Once the lease has been validly transferred, the incoming tenant replaces the outgoing tenant. The outgoing tenant can remain jointly liable with the transferee for the statutory period, capped at two years and subject to expiry of the lease.

The Court of Cassation recently considered Article 323 in litigation arising from the transfer of 29 supermarket businesses together with leases and fixed assets, expressly engaging the rule that consent to transfer of a workplace lease cannot be withheld without just cause.

For transaction lawyers, that creates an important distinction.

In an ordinary share sale, the corporate tenant generally remains the same legal person; ownership of that company changes.

In an asset or business transfer, the acquirer may need the contractual lease relationship itself to move to a different legal entity.

That can make landlord consent a genuine condition to closing.

It is therefore dangerous to identify a lease in due diligence merely as "transferable / non-transferable". Counsel should examine the statutory Article 323 regime, the contractual language, the nature of the transaction and whether any independent change-of-control restrictions have been negotiated.

Group companies are still separate tenants

Common ownership does not erase separate legal personality.

In 3rd Civil Chamber decision E. 2024/4329, K. 2025/3400, commercial premises were used in circumstances involving another group company despite contractual restrictions on third-party use. The Court of Cassation upheld the conclusion that use by the separate company amounted to a material contractual breach after the tenant failed to cure the breach within the statutory period.

A group reorganisation should therefore not assume that a sister company can occupy premises simply because the economic owners remain unchanged.

The lease needs to permit the intended structure.

8. Fit-out rights should be negotiated before money is spent

For many commercial tenants, the most valuable part of the lease is not the right to occupy an empty shell.

It is the ability to turn that shell into the premises from which the business will operate.

Retail, hospitality, healthcare and leisure businesses may spend substantial sums on mechanical systems, kitchens, façades, signage, internal structures and specialist installations before opening their doors.

Article 321 addresses alterations and improvements made by the tenant. Written landlord consent is central. Where the landlord consents to the works, the parties should also address expressly whether the tenant must restore the property at the end of the lease and whether any claim can be made in relation to value added by the works.

Those issues should not be left to implication.

A well-drafted fit-out regime should ordinarily distinguish between structural works and ordinary internal alterations; allocate responsibility for permits and building approvals; regulate landlord inspection; address ownership and removal of installations; and state clearly what reinstatement will be required on exit.

For a tenant investing several years' rent before commencing business, a lease that is clear on rent but silent on reinstatement is not a complete commercial document.

For the landlord, the same point works in reverse. Poorly controlled works can leave the property physically altered, non-compliant or difficult to re-let.

Fit-out is therefore a property-value issue for both sides.

9. Early surrender is a liability-management exercise, not simply a handover of keys

A tenant's business may leave the premises before the lease is capable of ordinary termination.

Article 325 regulates that situation.

Returning the premises early does not automatically extinguish the tenant's obligations. They continue for a reasonable period during which the property could be re-let under similar conditions.

The tenant can bring that exposure to an earlier end by producing a replacement tenant who is solvent, willing to assume the lease and whom the landlord can reasonably be expected to accept. Benefits obtained and costs avoided by the landlord must also be taken into account.

For corporate tenants, the implication is practical.

If a site is likely to close, lease strategy should begin before the closure date.

There may be time to identify a replacement tenant, negotiate an assignment, agree an early surrender payment or coordinate closure with the landlord's own redevelopment plans.

Simply vacating first and negotiating later usually gives the tenant fewer options.

Article 331 provides a separate route where sufficiently serious circumstances make continuation of the lease relationship intolerable. That is an extraordinary termination mechanism, not an ordinary commercial break right. The fact that a site has become less profitable or management no longer wishes to operate there does not by itself convert ordinary business risk into an important reason under Article 331.

Businesses that require genuine flexibility are better served by negotiating it into the lease.

10. Default and eviction rights are highly procedural

The TCO gives landlords several routes where the tenant has defaulted, but the routes have different requirements.

Under Article 315, where rent or qualifying ancillary expenses remain unpaid after becoming due, the landlord may serve written notice providing the statutory cure period and warning that the lease will be terminated if the default is not remedied. In residential and roofed workplace leases, the cure period may not be less than 30 days.

Article 352 contains distinct tenant-related termination grounds, including the mechanism based on two justified written notices for qualifying non-payment defaults within the relevant rental period.

It also regulates the written eviction undertaking (tahliye taahhüdü). Where, after delivery of the premises, the tenant validly undertakes in writing to vacate on a specified date and then fails to do so, the landlord must commence the relevant proceedings or enforcement within the statutory one-month period.

The formalities matter because a notice is not merely evidence that the landlord was unhappy.

It may be the legal foundation of the later termination claim.

That is why the landlord should decide at the notice stage whether it is preserving a debt claim, establishing a termination ground or both.

11. Dispute clauses deserve more care after the 2026 General Assembly decision

International commercial leases frequently contain arbitration clauses.

That should no longer be treated as an unremarkable drafting choice in Türkiye.

In its decision E. 2025/502, K. 2026/15 of 21 January 2026, the General Assembly of Civil Chambers (Hukuk Genel Kurulu) considered a dispute arising from a 30-year lease containing an arbitration clause and concerning the applicable rent increase mechanism and alleged overpayment.

The General Assembly upheld the need first to determine the legal character of the lease. Its reasoning accepted that where the relationship is a residential or roofed workplace lease, mandatory rules governing rent determination may affect whether the dispute is capable of arbitration. Where the relationship falls within another lease category, the result can differ. The decision therefore ties arbitrability to the underlying lease classification rather than treating all lease disputes alike.

That is a significant development for commercial drafting.

An arbitration clause should not simply say that "all disputes arising from this lease" will be resolved by arbitration and assume that every future controversy will necessarily remain before the tribunal.

The subject matter of the dispute can matter.

The ruling is particularly relevant to rent-determination disputes because the Court emphasised the mandatory nature of the statutory rent regime. It does not mean that every dispute arising from a commercial lease is incapable of arbitration.

There is also an interaction with mandatory mediation.

Since 1 September 2023, disputes arising from lease relationships are generally subject to pre-action mediation under Article 18/B of Law No. 6325, except for the statutory route concerning non-judgment eviction through enforcement proceedings.

At the same time, Article 18/A(18) provides that mandatory mediation rules do not apply where a valid arbitration agreement exists or where another mandatory alternative dispute mechanism applies.

In a significant commercial lease, the dispute-resolution clause should therefore be drafted after considering what disputes are likely to arise and whether those disputes are legally arbitrable, rather than simply importing the arbitration clause from another transaction.

Where court proceedings are required, Article 4 of the Code of Civil Procedure generally assigns lease disputes (including claims arising from the lease relationship) to the Civil Court of Peace (Sulh Hukuk Mahkemesi) regardless of the amount in dispute, subject to the statutory enforcement exception. The fact that both parties are merchants does not by itself move an ordinary lease dispute into the commercial court.

12. Lease due diligence should follow the economics of the transaction

The same lease should be reviewed differently depending upon why the client is looking at it.

A buyer acquiring an income-producing property needs to know whether the rent is sustainable, when a five-year review becomes available, how long statutory renewal protection may continue, whether termination notices have already been served, what security exists and whether the investment case assumes possession that cannot legally be obtained on the expected date.

A buyer acquiring an operating company needs a different analysis.

The questions may include whether the target itself is the named tenant; whether the transaction is a share sale or an asset transfer; whether landlord consent is required; whether the lease contains change-of-control provisions; whether a group company is occupying the premises; whether the rent is close to a statutory market-reset date; whether fit-out and reinstatement liabilities are adequately reserved; and what would happen if the business decided to close the site shortly after completion.

For a tenant, a below-market long lease may be one of the company's most valuable operating assets.

For a landlord, the same lease may be a restriction on the property's short-term redevelopment value.

The legal document has not changed.

The economic perspective has.

That is why commercial lease due diligence should not amount to extracting the commencement date, expiry date and monthly rent into a spreadsheet. It should explain what rights and liabilities those terms actually create under Turkish law.

Conclusion

Commercial leasing in Türkiye requires a different mindset from ordinary contract drafting.

The parties' agreement remains important, but it operates inside a statutory framework that can determine rent, renewal, assignment, security and termination even where both landlord and tenant are sophisticated commercial entities.

The starting classification matters. The Court of Cassation's 2026 decision on mixed industrial premises confirms that the predominant character of the property can determine whether the roofed-workplace regime applies at all.

Once that regime applies, the contractual expiry date no longer tells the entire story. Article 347 limits the landlord's ability to recover possession merely because the stated term has ended. Article 344 creates both annual rent controls and the broader five-year market-rent mechanism. Articles 323 and 325 govern two of the most commercially important events in the tenant's life: transfer of the lease and departure before the agreed term has run. Articles 342 and 346 impose further limits on security and payment provisions.

The surrounding regulatory framework matters too. A proposed foreign-currency rent can raise a separate Treasury and Finance issue. A property acquisition does not erase the existing tenant. A business transfer can fail to carry a strategically important lease. And, following the General Assembly's 2026 decision, even a carefully drafted arbitration clause may require closer examination where mandatory roofed-workplace rent rules are engaged.

For substantial commercial premises, the useful question is therefore not simply whether the lease is "landlord-friendly" or "tenant-friendly".

It is whether the document and the statutory regime together produce the commercial position the client believes it has agreed.

That question should be answered when the lease is negotiated.

It becomes considerably more expensive to answer it after the premises have been fitted out, the business has been sold or the parties are already disputing possession.

How Terziolu & Partners Can Assist

Terziolu & Partners advises landlords, corporate tenants, property owners, investors and international businesses on commercial lease matters involving Türkiye, often as part of wider cross-border matters. Our work may include lease drafting and negotiation; analysis of roofed-workplace status; rent-review and rent-determination strategy; foreign-currency lease issues; assignment and business transfers; group-company occupation; fit-out and reinstatement provisions; deposits and contractual security; property-acquisition and M&A lease due diligence; needs-based and redevelopment termination; early surrender; payment defaults; eviction undertakings; mediation; arbitration issues; and court proceedings arising from commercial lease relationships.

For acquisitions involving either an operating business or a tenanted property, lease review can be coordinated with our real estate and private client, corporate and commercial, dispute resolution and cross-border coordination work.

Discuss a commercial lease, rent review or possession question with our team.

Selected authorities

Primary legislation

Turkish Code of Obligations No. 6098, particularly Articles 310, 315, 321 to 325, 331 and 339 to 356. Official text published by the Republic of Türkiye Ministry of Justice.

Code of Civil Procedure No. 6100, Article 4, governing the jurisdiction of the Civil Courts of Peace over disputes arising from lease relationships. Official Ministry of Justice text.

Law No. 6325 on Mediation in Civil Disputes, Articles 18/A and 18/B, including mandatory mediation for lease disputes and the statutory treatment of arbitration agreements. Official Ministry of Justice text and implementation materials.

Communiqué No. 2008-32/34 concerning Decree No. 32 on the Protection of the Value of Turkish Currency, as amended, including the rules on foreign-currency and foreign-currency-indexed real estate leases. Official Ministry of Treasury and Finance text and guidance.

Court of Cassation (official UYAP decisions)

Court of Cassation, 3rd Civil Chamber, E. 2025/4986, K. 2026/3318, 21 May 2026. A current decision requiring the predominant character of mixed industrial premises to be established before the court determines whether the special residential and roofed-workplace rent regime applies.

Court of Cassation, General Assembly of Civil Chambers, E. 2025/502, K. 2026/15, 21 January 2026. A significant decision on the relationship between lease classification, mandatory rent rules and arbitrability. The judgment confirms that the legal character of the lease may have to be determined before an arbitration clause can be applied to a rent-determination dispute.

Court of Cassation, 3rd Civil Chamber, E. 2025/4720, K. 2025/5281, 5 November 2025. A decision applying Article 347 after completion of the ten-year extension period and illustrating the calculation of the landlord's no-cause termination right.

Court of Cassation, 3rd Civil Chamber, 2025 case law on Article 350 notice requirements. The Court confirmed that an additional contractual notice requirement benefiting the tenant can remain binding on a landlord seeking needs-based termination.

Court of Cassation, official UYAP decision on Article 323 and the transfer of 29 supermarket operations. The decision addresses transfer of workplace leases together with an operating business and the statutory restriction on withholding landlord consent without just cause.

Court of Cassation, 3rd Civil Chamber, E. 2024/4329, K. 2025/3400. A decision on unauthorised occupation by a separate group company and the consequences of treating affiliated companies as though they were the same tenant.

Court of Cassation, 2025 decision on Article 351. The Court strictly applied the one-month written-notification condition for a new owner's special needs-based termination route.