Renovation in a Rented Property

Renovation of a Rented Property – Lawyer in Izmir

According to the Law of Obligations; "A lease agreement is a contract in which the lessor agrees to allow the lessee to use or benefit from something, and the lessee agrees to pay the agreed rent in return." Naturally, in this contract made by two parties, both parties have certain duties and obligations towards each other. 

Turkish Code of Obligations While the landlord has the authority to make alterations and modifications to the leased property, they also grant the tenant, albeit in a limited way, this right. Improvement refers to making the property better and of higher quality than before as a result of the work undertaken. This definition suggests that the work undertaken is related to quality. For example, replacing windows or heating equipment with better ones.  

A- Landlord Making Changes 

1) The proposed change should not necessitate the termination of the lease agreement. 

 It is argued that the phrase "which does not necessitate the termination of the lease agreement" in our law should be interpreted as "if the lease relationship has not been terminated.". 

 For example, reconstruction-based repairs, as stipulated in Article 350 b.2 of the Turkish Code of Obligations, fall under this category. If the alterations and modifications to be made to the leased property are of a nature that would terminate the lease agreement, the landlord cannot make these changes and improvements before the end of the lease term. 

2) It must be acceptable to the tenant. 

The renovations and alterations made by the landlord must be tolerable by the tenant. It is argued that the assessment of whether the tenant can tolerate these renovations and alterations should be based on objective criteria. In other words, the tenant's situation in the face of these renovations and alterations should be considered. When examining this situation, factors such as the duration of the activity, the tenant's situation, the extent of the impact, and the economic consequences should be taken into account. If, after examining these criteria, the tenant's right to use the property is extraordinarily restricted, then the tenant's tolerance for these changes has not been met. 

3. It must comply with the principle of honesty. 

The clause in the law stating "the landlord is obligated to protect the tenant's interests" is considered a concrete manifestation of the principle of good faith found in Article 2 of the Turkish Civil Code. In other words, the landlord, in making alterations or modifications to the rented property, must protect the tenant's interests as required by the principle of good faith. For example, in practice, it is observed that landlords, in order to terminate the lease, take the boiler from the rented property to use for themselves and replace it with an old or faulty boiler. Such practices are contrary to the principle of good faith and make it impossible for the tenant to tolerate them. 

B- Compensation for Damages Incurred 

In the case of a rented business premises, if there is a decrease in income due to renovations and alterations made to the rented property, this amount can be claimed as compensation for damages. Furthermore, since the renovations and alterations occurred later, even if there is an increase in the value of the rented property, unless otherwise specified in the original contract, no additional fee can be demanded from the tenant. 

C-Tenant's Consent 

The landlord's consent can be given before, during, or after the renovation and alteration works. The requirement for written form also facilitates proof for the parties. While the lease agreement itself is not subject to any specific form, alterations and renovations to the leased property are subject to written form. Therefore, even if the lease agreement was made orally, a written form is required for any modifications, renovations, or alterations to the leased property. Since the landlord is free to give or withhold consent, they also determine the scope of the renovations and alterations. The tenant must not exceed the scope of the consent given for the renovations and alterations. Therefore, the landlord may attach certain conditions to their consent. The tenant is obliged to comply with these conditions set by the landlord.. 

D- Tenant's Right to Make Changes 

If the tenant makes improvements or alterations without the landlord's consent, they are obligated to restore the leased property to its original condition in accordance with the contract, at their own expense. Apart from the right to terminate the contract, the landlord may claim compensation for these unauthorized improvements or alterations in accordance with general legal provisions. 

For the landlord's approval and acceptance, fulfilling the requirement of a simple written form is sufficient. The tenant may only make improvements and alterations to the leased property with the landlord's written consent. This provision is mandatory, and the written form requirement is a condition of validity. 

E- Increase in Value After Modifications Made Without Consent 

 If the rented property increases in value due to unauthorized improvements or alterations, the tenant cannot claim any rights to compensation for this increase. Conversely, if the rented property decreases in value due to these improvements or alterations, the tenant is obligated to compensate for this decrease. Conversely, unless otherwise agreed in writing, a landlord who consents to improvements or alterations cannot demand the return of the rented property in its original condition. This relieves the tenant of the obligation to return the rented property in the same condition as when it was received. However, the parties may agree in writing that the tenant may claim compensation for any increase in the value of the rented property. Furthermore, the tenant has the right to remove any improvements or alterations made to the rented property, provided these have not become an integral part of the property. 

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