B2B Default, Interest, and Lump-Sum Penalty 'Acceleration' (Turkey)

Under the Turkish Code of Obligations (Law No. 6098), penalty clauses (such as flat lump-sum late fees) and acceleration clauses (where a single delayed payment makes the entire remaining lease term's rent immediately due) are strictly prohibited and legally void in residential lease agreements. These mandatory protections under Article 346 apply to residential tenants to prevent excessive financial burdens.

1. The Prohibition of Acceleration and Penalty Clauses (Article 346)

Article 346 of the Turkish Code of Obligations (TCO) strictly limits the financial penalties a landlord can impose on a residential tenant. Specifically, it prohibits agreements that impose a penalty condition (such as a fixed monetary fine) in the event of late payment.

Furthermore, acceleration clauses are completely invalid. A residential lease contract cannot state that if a tenant is late on one month's rent, all future rent for the remainder of the lease term becomes immediately due and payable. These mandatory provisions of Law No. 6098 apply to residential contracts and override any conflicting terms written into the lease agreement. Disputes are typically adjudicated in the Civil Peace Courts (Sulh Hukuk Mahkemeleri).

2. Residential Default Interest and Grace Periods

While punitive late fees and acceleration clauses are prohibited, landlords are entitled to charge default interest on delayed payments.

• Statutory Grace Period: Under Article 315 of the TCO, landlords must provide a formal written notice giving residential tenants at least a 30-day grace period to pay overdue rent. The lease cannot be terminated for non-payment until this 30-day period expires without payment. This mandatory statutory grace period overrides any lease agreement claiming the right to immediate termination.
• Default Interest: Instead of flat penalty fees, landlords can apply default interest to late payments. The general provisions of the Law on Legal Interest and Default Interest (Law No. 3095) and the TCO govern these rates. Unlike commercial transactions, residential leases do not use the specific "Commercial Default Interest" (Avans Faizi) rates. Default interest rates are subject to statutory limits to prevent the imposition of exorbitant charges on residential tenants.

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