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Senior Associate

Legal Alerts

30/03/2020

New Measures Introduced to Reduce COVID-19 Pandemic’s Effects on Real Estate and Tourism

Legal Alerts
Real Estate
General

The Law No. 7226 on Amendments to Certain Laws (“Law”) was published in the Official Gazette no. 31080 on March 26, 2020.

What’s New?

The Law includes many amendments and regulations to various sectors that aim to contain the economic effects of the COVID-19 pandemic. The provisions discussed below are now in force as of the day of their publication on the Official Gazette.

1. Workplace Lease Agreements

The Law ordains that a tenant’s inability to pay the rent for a workplace between March 1, 2020 and June 30, 2020 does not constitute reason for lease termination or eviction.

The new regulation, which is applicable only to workplace lease agreements, does not release the tenant from its obligation to pay rent. However, it offers them protection that the lease agreement will not be terminated and they will not be evicted due to their inability to pay rent. According to our interpretation of the letter and spirit of the Law, this exceptional arrangement is reserved only for a tenant’s inability to pay rent arising from the COVID-19 pandemic and may not extend to any other arbitrary reasons for a tenant’s failure to pay. It is unclear how the courts will review the factual circumstances of a tenant’s inability to pay and impose a threshold on burden of proof.

2. Tourism Facilities Licensed by the Ministry of Culture and Tourism

The Law introduces measures for operators and investors that were allocated public lands to build tourism facilities by the relevant ministries and have the relevant licenses (such as a Tourism License) from the Ministry of Culture and Tourism.

The operators and investors covered by the measures will be allowed to postpone their payments of rent, definite permits, definite allocations, rights of easement, usage rights, utilization permits, additional utilization fees and revenue share between April 1, 2020 and June 30, 2020 for six months without the requirement to file applications. These receivables will be collected after June 30, 2020 without incurring any interest rate increase until the end of the postponement period.

Additionally, the payment period of the occupancy fee (ecrimisil) for operators and investors licensed by the Ministry of Culture and Tourism who are operating without permission on public lands has been postponed for six months without any application requirement during the same period.

Conclusion

The amendments do not eliminate payment obligations from workplace tenants and tourism facilities but rather grant a degree of protection to companies that are unable to pay their rents or allocation fees due to the COVID-19 pandemic. The Law also prevents the termination of agreements or evictions for companies who are unable to pay their rents.