Eviction of the Lessee from the Leased Property due to Termination of Agreement

May 14, 2014

Termination of the agreement and eviction of the Lessee from the leased property was approved by the decision of the Supreme Court Assembly of Civil Chambers, No.2013/6-96 E. and 2013/859 K., as sales activities by the Lessee without issuing receipts or invoices is regarded as a breach of the agreement. In the dispute subject to the decision, the Lease Agreement entered into by the Parties provides that a certain percentage of the net sales turnover of a store located in a Shopping Mall shall be paid to the Lessor. As a result of the lawsuit filed at the Civil Court of Peace, the Local Court gave a ruling of Termination and Eviction due to the fact that sales activities by the Lessee without issuing receipts or invoices, in violation with the material provisions of the agreement and in a manner which would result in Loss of Rent, would necessitate termination to material breach of the agreement, and failure to evict of the Lessee from the leased property upon termination would result in further disputes and lawsuits between the parties. The ruling of the Local Court, which was appealed by the Defendant Party, was reversed by the related Department of the Supreme Court, due to the fact that, in order to give a ruling regarding eviction due to termination of the agreement, the underlying dispute should be related to the direct utilization of the leased property, and performance of sales activities without receipts or invoices is not related to the direct utilization of the leased property; moreover, non-fulfilment of any of the liabilities of the Lessee under the agreement could not be considered as a cause for eviction due to the breach of the agreement. In the new trial, the Local Court insisted on its previous ruling. The dispute was elevated to the Supreme Court Assembly of Civil Chambers, and the local Court's decision to insist on its previous ruling was approved due to the fact that allowing the Lessee to continue to occupy the leased property would result in further disputes between the parties, and an eviction ruling should be made since the breach of the agreement in this case was acknowledged by both the court and the relevant Department of the Supreme Court. In summary, Since sales activities without receipts or invoices would cause loss of rental fees, it constitutes a violation of the agreement and necessitates termination. It was ruled that the Lessee is evicted, since the Lessee's continuance to utilize the leased property following termination is not justifiable, and would cause further disputes and lawsuits between the parties.

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