ABSTRACT
Usufructuary lease agreement has been stipulated in Article 357 and the following articles of the Turkish Code of Obligations1 law numbered 6098 and dated 11.01.2011. With this agreement, the lessor undertakes to the lessee to leave the use of a thing or a right giving products and to allow the lessee to gather products from it against a price. Usufructuary lease agreement is a contractual relationship which is formed by the mutual declaration of intention of the parties and which has legal consequences whilst being a relationship of obligations. In this sense, usufructuary lease agreement has three elements; subject, mutual agreement of the parties and price. In light of the decisions of the Court of Cassation, in order for the articles of usufructuary lease to be applied, the subject matter of the lease should be viable for gathering products, and in the event of a business lease, should include the permits or the warrants required for gathering revenues from the leased business. Although the usufructuary lease has similar elements with ordinary lease and roofed workplace lease, it is necessary to identify the differences using certain criteria.
I. INTRODUCTION
Although the lease agreement has been stipulated in Article 299 and the following articles of the Turkish Code of Obligations (“TCO”) law no. 6098 dated 11.01.2011, the provisions regarding usufructuary lease in the Code of Obligations numbered 8182. which has been abolished, have been stipulated in Article 357 and the following articles of the TCO. In article 357 of the TCO, usufructuary lease is defined. According to this article, usufructuary lease is an agreement where “the lessor undertakes to the lessee to leave the use of a thing or a right giving products and to allow the lessee to gather products from it against a price.” The product mentioned in this article can be a natural product or a legal product. Along with this, it is possible for an industrial or agricultural business to be subject to usufructuary lease thus, usufructuary lease is also named as “business lease3.”
Usually, the objects that constitute the subject matter of the usufructuary lease are objects that bring natural products, but in the event that businesses and rights are the subject matter of the usufructuary lease, it is possible to benefit from civil products4. In usufructuary lease, the lessee is given the authority to gather product and revenue along with the right to use5. In this context, the lessor does not only lease an immovable to the lessee but also the right to gather civil or natural products from this immovable, in other words, the opportunity to gather products from this immovable.
Due to their subject matters, usufructuary lease agreements are often considered with other lease articles in practice. For example, since in most cases the subject matter of the lease is an immovable (roofed workplace), usufructuary lease institute is mostly confused with “House and Roofed Workplace Lease” as stipulated in article 399 and the following articles of the TCO. This situation is of importance since the articles of the roofed workplace are stricter and are in more favor of the lessee compared to the usufructuary lease. Because, if an agreement is executed with the intention of usufructuary lease but is, in fact, subject to roofed workplace or ordinary lease provisions, big differences in practice may occur. With regard to these reasons and in the light of the Court of Cassation decisions and academic views, the area of application of the usufructuary lease and the criteria, in practice and in theory, for distinguishing it from similar other provisions are studied within our work.
II. ELEMENTS OF USUFRUCTUARY LEASE
Usufructuary lease occurs when a thing or a right giving products is transferred to the lessee for the purpose of using, benefiting from the products of and operating the thing or the right6. This description of usufructuary lease derives from article 3577 of the TCO that regulates the usufructuary lease. The said article describes the usufructuary lease as an agreement where “the lessor undertakes to the lessee to leave the use of a thing or a right giving products and to allow the lessee to gather products from it against a price” thus, the article consists of the elements of usufructuary lease. It is beneficiary to first address the elements of the usufructuary lease in order to determine the application area of the provisions regarding the usufructuary lease. The minimum elements of the usufructuary lease agreement have been stipulated in article 357 of the TCO. According to this, the elements of the usufructuary lease are the subject matter of lease, price and mutual consensus of the parties regarding usufructuary lease. These elements will be examined below.
A. Subject Matter of Lease
The subject matter of the usufructuary lease consists of a thing or a right that gives a product. The product mentioned here can be a natural product such as the wheat harvested from a field or a legal product such as the revenue from operating a hotel. Products deriving from these are classified as natural products and civil products. In order to talk about usufructuary lease, a thing or a right that gives product should constitute the subject matter of the agreement8.
Natural products are determined as products that recur in certain times and that are considered, by customs and in accordance with its purpose of allocation, as viable to be collected9. Although it must be stated that the right to use and gather products given to the lessee under the usufructuary lease agreements of natural products cannot be used in a way and proportion where the core of the leased is harmed. This proportion will be determined with regard to the purpose of allocation and customs10. Oranges retrieved from an orange tree or wheat harvested from a wheat field as well as stones that are gathered from a quarry at the end of an ordinary management are considered as natural products11.
On the other hand, civil products are revenues deriving from the legal relationship based on gathering revenues from a thing or a right. Things that are made subject to the lease may be material or non-material such as intellectual property rights and licenses12. Management of a tea house or leasing of a factory may be given as examples of usufructuary lease agreements where the subject matter is a civil product.
It is possible for a commercial, industrial or agricultural business to be the subject matter of usufructuary lease; thus usufructuary lease is also called as “business lease13." In order for usufructuary lease to be present, the subject matter of the lease relationship needs to be a movable or immovable, business or right that is viable for gathering products and it should be leased alongside its inventory and management license. Unless the right to manage is not within the scope of the lease when an immovable is leased, such lease cannot be considered as usufructuary lease14. In such cases, for example in situations where a hotel is leased but the necessary licenses for managing and inventory are not included or the necessary licenses are gathered by the lessee afterward, it is not possible to apply usufructuary lease provisions.
B. Lease Fee
Usufructuary lease agreement is a synallagmatic agreement. Lessee undertakes to pay a fee in return for the transfer of usus and fructus rights by the lessor15. Lease fee is usually an amount of money. Different from ordinary lease, in usufructuary lease, the counter performance can be decided as a portion of the products to be gathered from the subject matter of the lease. In business lease, a portion of the revenues gained from business transactions may be decided as the lease fee16.
C. Consensus
In order for the agreement to be formed, intention of the parties should be in accordance with the fundamental elements of the agreement implicitly or explicitly and the parties should be qualified to construct a usufructuary lease agreement. Since usufructuary lease is a consensual agreement, the delivery of the leased is not necessary to construct the agreement. Delivery is required during the performance of the agreement17. In usufructuary lease, general provisions are applied with regard to matters such as competency to contract and formation of the agreement18.
III. AREA OF APPLICATION OF THE USUFRUCTUARY LEASE PROVISIONS
The presence of the elements above in a lease agreement does not solely result in the application of the usufructuary lease provisions. In the Court of Cassation decisions, along with the elements of the law, certain criteria are established in order to determine as to whether usufructuary lease provisions will be applied. Within this part of the article, the criteria of the Court of Cassation will be examined and thus, it is aimed to better comprehend the area of application of the usufructuary lease provisions.
As expressly stated in the Court of Cassation decisions, in order for a lease agreement to be subject to usufructuary lease provisions, along with the affirmative intention of the parties, the subject matter of the lease should be eligible for management and in such manner, if the subject matter of the lease is a business, the license for management should be included in subject matter of the lease agreement.
In the decision of the 14th Civil Chamber of the Court of Cassation dated 06.02.2008 and numbered 2007/15968 E. and 2008/1248 K., it is stated that the subject matter of the lease should be eligible for management by stating “nevertheless, it is settled that the leased apartment projects are not in accordance with articles 24 and 31 of the regulations and thus, it was notified that no license will be given by the Local Health Authority. Plaintiffs cannot be forced to be the lessees of a building which they cannot legally manage by obtaining the management licence.” In the decision of the 14th Civil Chamber of the Court of Cassation dated 06.02.2008 and numbered 2007/15968 E. and 2008/1248 K., it is stated that the license or approval for management should also be included in the usufructuary lease agreement by stating “operational pepperoni production facility was leased to the defendant on 10.09.1999 with an agreement. According to the nature of the leased, it is inevitable that certain approvals are required from certain authorities in order to continue the business activities in such places. It cannot be expected from the defendant to illegally continue the business activities without these approvals.”
As can be seen, two criteria that we come across in the Court of Cassation decisions are the eligibility of the leased for gathering products and the requirement for the licenses or approvals necessary for gathering products to be included in the subject matter of the lease agreement. Apart from these, there are certain criteria established by the Court of Cassation regarding the inventory which will be further examined under the roofed workplace provisions below. Since, in practice, these two elements that are especially important in business lease, which is a type of usufructuary lease, should be taken into account due to the fact that they point out the scope of the area of application of the usufructuary lease.
IV. COMPARISON OF USUFRUCTUARY LEASE WITH SIMILAR AGREEMENTS
Usufructuary lease has similar elements with ordinary lease and roofed workplace lease. However, there are differences between these lease agreement types especially in terms of subject, lease fee and rights and obligations provided to the lessee. Important points deriving from the comparison of usufructuary lease with other similar agreements are underlined below.
A. Usufructuary Lease and Ordinary Lease
The relationship between usufructuary lease and ordinary lease is stipulated in article 358 of TCO. Parties will be subject to the provisions of ordinary lease in matters that are not regulated by the usufructuary lease provisions. However, there are differences between ordinary lease and usufructuary lease in subject matter, authorities of the lessee, obligations of the lessee deriving from the lease and the content of the lease fee.
While the subject matter of the ordinary lease can be any movable or immovable, the subject matter of the usufructuary lease can be a movable, immovable, a business or a right that outputs products. It is not possible for rights and businesses to be the subject matter of an ordinary lease19. In most cases, usufructuary lease shows itself as business lease and its subject matter is immovable. When we look at the description given in the TCO with regard to the ordinary lease, if the right to fructus is given along with the right to usus regarding a thing or a right, then usufructuary lease will be applied20.
Second point where ordinary lease and usufructuary lease differs is the authority given to the lessee. While only right to usus is given to the lessee in ordinary lease, right to gather products or revenues along with the right to usus is given to the lessee in usufructuary lease21. However, in certain cases, it is possible to grant fructus rights in the ordinary lease and only usus rights in usufructuary lease. In such cases, the agreement may be defined as either ordinary lease or usufructuary lease with regard to which one of the rights of usus and fructus is implied more and is deemed more important in the agreement22.
Apart from the aforementioned, obligations of the lessee deriving from the lease differ between ordinary lease and usufructuary lease. While there is no obligation to manage and use the leased in ordinary lease, in usufructuary lease there is an obligation to manage the leased and keep the leased eligible for management23.
Even though a thing that is viable for gathering products may be the subject matter of an ordinary lease, in the event that an immovable viable to gather revenue such as a restaurant or a tea house is leased with its licenses and client, personnel and relationships with other people for continuing its businesses with the purpose of being managed, usufructuary lease provisions will be applied24. However, if the subject matter of the lease is a thing that the lessee has the right to usus but not the obligation to manage and is a thing that is eligible for gathering products, then there is no usufructuary lease. In the event that a vegetable garden is used to produce vegetables and gain revenues there is usufructuary lease, but if the garden is used as a children playground then there is ordinary lease25.
B. Usufructuary Lease and Roofed Workplace Lease
In practice, business lease and roofed workplace lease are similar. Differentiating these two legal institutes is important since the provisions of the TCO regarding the roofed workplaces are much stricter and are in more favor of the lessee when compared to the usufructuary lease provisions. The general purpose of the roofed workplace provisions is to bring forth regulations that will protect the lessee that is comparatively in need of more protection thus keeping the lease relationship within a mandatory scope in favor of the lessee. In this sense, executing an agreement that is subject to the provisions of roofed workplace while the intention of the parties is usufructuary lease may give birth to certain major differences. As mentioned above in the Court of Cassation decisions, there are certain criteria. Before addressing these, theoretical differences between these two agreement types should be taken into consideration.
Firstly, the most significant difference between the roofed workplace and usufructuary lease provisions is that while the subject matter of the roofed workplace agreement should be a roofed immovable, the subject matter of the usufructuary lease may be other types of immovables such as a tea garden that does not have a roof. The stand areas inside shopping malls that are formed as separate sections in the halls and corners by arranging one or more tables accordingly, for commercial purposes such as advertisement and sales, are subject to the dispute as to whether these places, which do not have a wall and roof, are subject to roofed workplace provisions. As stated in a new decision of the Court of Cassation, evaluating the lease of an area whose boundaries are not determined via static formations such as walls, a roof or glasses under the roofed workplace provisions will not be accurate26. However, in the event that the majority of an immovable that is subject to the lease is roofed, the Court of Cassation deems this immovable as roofed workplace27.
Roofed workplace and usufructuary lease differ in the lease fee element as well. In roofed workplace lease, the obligation of the lessee is mostly paying a certain fee whereas, in usufructuary lease, the lease fee may be decided as a proportion of the revenue derived from the products. Thus, under the liberty of contract, the lease fee in usufructuary lease agreement may be directly determined as a fixed amount of money as well as a proportion of the revenue. Likewise in roofed workplace lease, it is possible to determine the lease fee as a proportion of the revenue. There are no explicit Court of Cassation decisions that define an obligation relationship as usufructuary lease with regard to only this element, whereas in doctrine it is stated that determining such a lease type is not sufficient for applying the usufructuary lease provisions28.
Another important difference is that, in order to talk about usufructuary lease, the licenses or authorities necessary for the management of the leased should be given to the lessee by the lessor with the agreement. It is a fix application by the Court of Cassation that the obligation relationship shall not be deemed as usufructuary lease in cases where these elements are absent29. In the decision of the 6th Civil Chamber of the Court of Cassation dated 17.03.2011 and numbered 2010/13367 E. and 2011/3210 K., it is emphasized that especially the management licenses should be given to the lessee by the lessor by stating “in order to talk about usufructuary lease, the subject matter of the lease relationship should consist of a movable or immovable thing that outputs products, a business or a right and these should be leased with the inventory and management licenses.”
In another decision of the 6th Civil Chamber of the Court of Cassation dated 06.02.2008 and numbered 2007/15968 E. and 2008/1248 K., it is resolved that the right to manage should be leased as well in order to be subject to the provisions of usufructuary lease by stating “… is required to be subject to a business enterprise and be leased with the right to manage.” Moreover, in the decision of the 6th Civil Chamber of the Court of Cassation dated 12.02.2008 and numbered 2007/13669 E. and 2008/1289 K. it is stated “… it is understood that the right to use a proportion of the area for which (he/she) has acquired the licence to manage a marble quarry has been transferred to the defendant company… it should be accepted that, pursuant to the specifications of the immovable and the purpose of the agreement, there is no agreement for transferring the management license but a relationship of usufructuary lease between the parties.”
If the lessor does not include the inventory and/or immovable of the leased in the subject matter of the agreement and if the lessee will procure the necessary inventory for the management by him/herself or as the 6th Civil Chamber of the Court of Cassation stated in its decision dated 17.03.2011 and numbered 2010/13367 E. and 2011/3210 K., if the case is that “the lessee will provide the cars and the personnel working at the stop, a separate section will be made for carwash, the open and closed auto park is leased under the agreement” then, as stated in the same decision, “it should be accepted that the relationship between the parties is not usufructuary lease since the transfer of inventory does not occur and the business is not leased with its management license.”
V. CONCLUSION
Usufructuary lease is stipulated in Article 357 and the following articles of TCO and is a lease type that is required to be separated from other lease types that are similar to it with respect to the area of application. It is important to elaborate on the differences within the law along with the differences that Court of Cassation evaluations express, since in practice, roofed workplace lease is confused with the business lease which is evaluated especially with regard to civil products. In any case, it is crucial for the parties who wish to enter into a usufructuary lease agreement to, at first, pay attention to the legal elements, to express as much as possible within the agreement that their intention is towards usufructuary lease and, when there is a case of business lease, to make sure that the management license and other approvals are included in the subject matter of the lease in order to benefit from the usufructuary lease provisions at the stage of any future legal proceeding.
BIBLIOGRAPHY
Cevdet Yavuz, Türk Borçlar Hukuku Özel Hükümler, 7th Edition, İstanbul 2009.
Fikret Eren, Borçlar Hukuku Özel Hükümler, 3rd Edition, Ankara 2016.
Gülay Öztürk, Teoride ve Uygulamada Hasılat Kirası, V. 1, Ankara 2010.
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Yasemin Karabidek, “Hasılat Kirasından Kaynaklanan Davalar ve Takipler”, Masters Thesis, Selçuk University Institute of Social Sciences, Konya 2011.
FOOTNOTE
1 “ Official Gazette (OG) numbered 27836 and dated 04.02.2011.
2 OG, dated 29.04.1926 and numbered 359.
3 Fikret Eren, Borçlar Hukuku Özel Hükümler, Ankara 2016, p. 453.
4 Haluk Tandoğan, Borçlar Hukuku Özel Borç İlişkileri, V. I/2, Istanbul 2008, p. 3.
5 Tandoğan, p. 303, 306.
6 Gülay Öztürk, Teoride ve Uygulamada Hasılat Kirası, Ankara 2010, p. 49.
7 According to that article: “Usufructuary lease is an agreement where the lessor undertakes to the lessee to leave the use of a thing or a right giving products and to allow the lessee to gather products from it against a price. Lease with joining the product is the usufructuary lease where the lease fee is decided as a portion of the gathered product. This portion is determined according to the local customs if not decided with an agreement.”
8 Murat İnceoğlu, Kira Hukuku. Volume 1, Ed. 1, Istanbul 2014, p. 24.
9 Cevdet Yavuz, Türk Borçlar Hukuku Özel Hükümler, Ed. 7, Istanbul 2009, p. 367.
10 Öztürk, p.51.
11 Öztürk, p.52.
12 Öztürk, p.53.
13 Eren, p.453.
14 Yasemin Karabidek, Hasılat Kirasından Kaynaklanan Davalar ve Takipler, Master Thesis, Selçuk University Institute of Social Sciences, Konya 2011, p.15.
15 Eren, p. 453.
16 İnceoğlu, V.1, p. 26.
17 Eren, p. 453.
18 Karabidek, p. 17.
19 Tandoğan, p. 2-3.
20 Alper Gümüş, Yeni 6098 Sayılı Türk Borçlar Kanunu’na göre Kira Sözleşmesi, Ed. 2, Istanbul 2012, p. 30.
21 Tandoğan, p. 6.
22 Tandoğan, p. 7.
23 Tandoğan, p. 7.
24 Tandoğan, p. 7.
25 Alper Gümüş, Borçlar Hukuku Özel Hükümler. V.1, Istanbul 2008, p. 314.
26 İnceoğlu, V. 2, p.23.
27 Court of Cassation 12th CC, dated 27.01.1970, numbered E.1969/11950, K.1970/836.
28 Öztürk, p. 66.
29 Court of Cassation 6th CC, 1.6.2010, 2010/5140 E, 2010/6524 K; Court of Cassation 6th CC, 17.03.2011, 2010/13367 E, 2011/3210 K.
