The Turkish Code of Obligations includes a prohibition on making connected contracts in lease law in order to prevent the lessor, who is in a strong position in the lease relationship, from imposing a debt on the tenant that is not related to the use of the leased property. Article 340 of the Turkish Code of Obligations titled ‘Connected Contracts’ states that if the establishment or continuation of the contract in residential and roofed workplace leases is tied to the tenant’s incurring a debt that is not directly related to the use of the leased property without the benefit of the tenant, the contract connected to the lease will be invalid.
According to the provision, the first condition required for the prohibition on connected contracts to be in effect is that the lease relationship is related to the lease of residential or roofed workplace. In other words, the provision of Article 340 regarding the prohibition on connected contracts in movable property leases or land leases will not be applicable.
The second condition required for the prohibition to come into effect is that a separate contract must be made from the lease contract and that the establishment or continuation of the lease contract must be tied to this contract. Although Article 340 of the Turkish Code of Obligations titled ‘connected contract’ states that ‘connected contract’ will be invalid, it is accepted that the connected issue can be regulated in a separate contract or as a provision of the lease agreement.
The third condition regarding the prohibition of making connected contracts is that the tenant has undertaken a debt that is not directly related to the use of the leased property with the connected contract. In other words, if the debt assumed by the tenant is directly related to the use of the leased property, then the provision regarding the prohibition of making connected contracts will not be applicable. In the doctrine, in cases where it is doubtful whether the connected contract is directly related to the use of the leased property, the existence of a direct connection is accepted. According to the Swiss Federal Court, in cases where there is a significant imbalance between the obligations included in the connected contract, even if there is a direct connection, the connected contract should be considered invalid. For example, it is an important issue for the lessor to install a fire extinguishing system in a certain number and at certain intervals in the rented area of the shopping mall. For this reason, shopping mall managements install these fire extinguishing systems themselves before the lease agreement and sell them to the tenant with the lease agreement. Although it is possible to accept that this sales contract is directly related to the use of the leased property, if this system is sold at an exorbitant price, in other words, if there is an ‘excessive imbalance’ between the obligations, the Swiss Federal Court accepts that the connected contract will be invalid. It should be noted that the connected contract cannot be accepted as absolutely invalid just because there is an excessive imbalance between the obligations. However, since the excessive imbalance between the obligations will indicate the existence of imposition, it must be proven that there is no imposition. Otherwise, the provision regarding the prohibition of connected contracts will be applied.[1]
In this context, another issue that needs to be emphasized is the cases where the lessor requires a certain good or service to be purchased from a certain person or from him. For example, the obligation to insure workplace leases does not, as a rule, constitute a violation of the prohibition of making connected contracts. However, if it is mandatory for this insurance to be obtained from a certain insurance company, this will mean the existence of an imposition. In this case, if it cannot be proven that there is no imposition, the violation of the prohibition of connected contracts will come to the fore.[2]
Another necessary condition for the prohibition of connected contracts is the absence of benefit for the tenant. Article 340 of the Turkish Code of Obligations stipulates that in order for a connected contract to be invalid, there must be no benefit for the tenant. In other words, even if the connected contract is not directly related to the use of the leased property, if the tenant benefits, the connected contract will remain valid.
Article 340 of the Turkish Code of Obligations regulates that the sanction regarding connected contracts is invalidity. The justification of the Law states that the type of invalidity is absolute invalidity. The dominant view in the doctrine is also in this direction. Therefore, if the above mentioned conditions exist, the linked contract becomes invalid retroactively. The judge takes the invalidity into consideration ex officio.
[1] İnceoğlu, M. M., & Baş, E. KİRA HUKUKUNDA BAĞLANTILI SÖZLEŞME YAPMA YASAĞI. Journal of Istanbul University Law Faculty, 70(2).
[2] İnceoğlu, M. M., & Baş, E. KİRA HUKUKUNDA BAĞLANTILI SÖZLEŞME YAPMA YASAĞI. Journal of Istanbul University Law Faculty, 70(2).