I. What is a Rent Determination Case in Turkey?
A rent determination case can be defined as a case regarding the determination of the rental price for residential and roofed workplace lease agreements. According to the Turkish Code of Obligations, the rental fee in new rental periods should not exceed the rate of change in the consumer price index based on twelve-month averages in the previous rental year. Within this limit, the rental fee and the rent increase rate to be applied in renewed lease agreements are determined by the parties in the lease agreement.
With the regulation introduced to the Turkish Code of Obligations, in lease agreements renewed between 01/07/2022 and 01/07/2024, the rental fee for the previous lease year should not exceed twenty-five percent.
First of all, the rent determination case is about the rental price; It can be opened if it is not specified in the lease agreement. If the parties have not agreed on how much the rental fee will be increased in the lease agreement, the parties may apply to the court and request the determination of the rental fee.
Secondly, in lease agreements with a term longer than five years or renewed after five years, the rental fee is determined according to how much the property will be rented if it is rented vacant again. In this case, when determining the rental fee;
- The condition of the rented property,
- Consumer price index,
- Comparable rental rates are taken into consideration.
The rent determination case mentioned in this article includes rent determination cases that last longer than 5 years, are renewed after 5 years, or will be filed at the end of every 5 years thereafter
II. Rent Determination Case Conditions in Turkey
1. Is There a Written Lease Agreement?
The first thing to consider in rent determination cases is whether there is a written lease agreement.
As it is known, it is not necessary for the rental agreement to be in writing for a rental relationship to be formed. The parties can conclude the lease agreement orally.
However, whether the lease agreement is in writing or not is an important issue for the rent determination case. In cases where there is no written lease agreement, it is very difficult to determine the periods in lease agreements renewed after 5 years. In lease agreements established orally, it is necessary to determine the start date of the lease relationship. It can be proven that 5 years have passed with receipts and invoice records. If there is a written lease agreement and the lease start date is specified, the rent determination case will need to be filed after at least 5 years.
2. Rent Determination Case 5 Year Condition
The 5-year condition arises from the provision specified in the third paragraph of Article 344 of the Turkish Code of Obligations. According to this; “Regardless of whether an agreement has been made by the parties on this issue, in lease agreements with a duration of more than five years or renewed after five years, and at the end of each five years thereafter, the rent to be applied in the new lease year shall be determined by the judge, the rate of change in the consumer price index according to the twelve-month averages, the condition of the leased property. and determined in an equitable manner, taking into account comparable rental prices. The rental fee determined in this way in the rental year after every five years may be changed according to the principles in the previous paragraphs.” provision is included.
In the law, in order to determine the rent by taking into account the comparable rental values, the term lease agreements with a duration of more than 5 years or renewed after 5 years is clearly used.
A lawsuit can be filed at any time to determine the rental price. However, the earliest period to be determined may be for the rental period after the fifth year of the lease agreement.
3. Warning Condition for Rent Determination Case
The notice requirement in a rent determination case varies depending on whether there is a written lease agreement and whether there is a provision in the contract stating that the rent will be increased every year.
If there is no written lease agreement between the parties; In order to file a rent determination lawsuit, it is necessary to send a warning. Even though there is a written rental agreement, if there is no stipulation in the agreement that the rental fee will be increased every year, in this case, it is necessary to send a warning before filing a rent determination lawsuit. In both cases, if a rent determination lawsuit is filed before a notice is sent, the period for which determination is requested can only be for the next rental period.
Warning Sample Rent Determination Case in Turkey to Tenant;
III. When is a Rent Determination Case Filed?
If precedent rents are to be taken into account in determining the rent, a request for the rent determination case must be made for the fifth year of the lease.
If there is a written lease agreement between the parties, there may be a provision in the lease agreement stating that the rental fee will increase in the renewal periods. In this case, if the case for determination of the rental price has been opened until the end of the new lease period, the beginning of the lease may be the beginning of the new term. In this case, it will be possible to file a retroactive rent determination lawsuit. For example; There is a lease agreement between the parties with the starting date of 15.11.2017 and in this lease agreement it is stated that “The tenant will pay the rent by increasing the PPI rate in the renewed rental periods.” Let’s assume there is a provision like this. In this case, 5 years of the lease relationship will expire on 15.11.2022. The lessor may request the determination of the rental fee as of 15.11.2022 in the lawsuit filed until 15.11.2023.
There may not be a written lease agreement between the parties. Even if there is, there may not be a provision in the written lease agreement stating that there will be an increase for the renewed lease periods. In this case, the lessor must send a notice at least 30 days before the beginning of the new lease period. This notice must state that the rental fee will be increased in the new rental period. In this case, the declaratory action filed within the new period will cover the entire new period.
If these conditions are not met, rent determination may be requested for the next period.
IV. Parties to the Rent Determination Case
The lessor or the tenant can file a rent determination lawsuit. However, in practice, it is opened by the lessor. If the ownership of the real estate belongs to more than one person, but the lessor is the only one, only the lessor can file a lawsuit. The defendant will also be the tenant or tenants.
If there is more than one lessor, a lawsuit must be filed by all of the lessors. If there is more than one tenant, all tenants must be named as defendants.
If a rent determination lawsuit is to be filed without having the title of lessor based on the ownership of the real estate; In case of cooperation, all owners of the property must file a lawsuit together or participate in the lawsuit or provide a permit. If the lease is subject to shared ownership, each stakeholder can request the determination of the rental amount in proportion to his share. However, if they request the determination of the entire rental fee, a lawsuit will need to be filed by ensuring the majority of shares and stakeholders in shared ownership.
V. Discovery and Expert Report in the Rent Determination Case
In order to determine the new rental price, the rented property is explored by the expert. The plaintiff pays the discovery and expert fees. If the case is won, these trial expenses will be collected from the defendant.
The expert visits the property, conducts ex officio precedent research and examines the precedent lease agreements submitted by the parties. The expert must also visit the properties shown as precedents during the survey and examine the lease agreements.
It would be better to make a decision based on the concrete lease agreements submitted to the court, rather than the advertisements on sites such as sahibinden. However, at this point, it is important that the real estate taken as a precedent has similar characteristics to the real estate on which the rental price will be determined, and that the period in which it is rented is close to the period in which the new rental price will be determined. In his report, the expert must clearly state the criteria according to which he determined the new rental price and which lease agreements he took as precedent.
The determination of the precedent rental price by the Supreme Court; “The rented immovable property and the counterparts of the parties should be examined one by one through the expert, and the precedents should be investigated ex officio, the necessary measurements and examinations should be made by the experts and the data obtained thus should be concretized, and the place subject to the case should be examined separately (location, environment, quality, type of use, starting point of the lease). He stated that all the characteristics that affect the rental amount (history, rental periods, etc.) should be compared, it should be explained with concrete reasons why the comparable rental prices are suitable or not, and the rental amount that the immovable property subject to the case can bring in case it is re-leased (empty) should be determined. (Supreme Court 6th Civil Chamber, 18.09.2014, 2014/7941 Merits, 2014/9714 Decision)
In addition, the expert also calculates the legal rent increase rate. At the end of all this examination, he submits a report to the court containing his opinions about the new rental fee. If the expert report is prepared in accordance with the law, it is taken as basis by the court when making a decision. However, the tenant may have been living in the real estate in question for many years. In this case, the judge makes an equitable discount on the rent determined by the expert. This discount is usually between 10% and 20% depending on the length of the rental period. The most important element of the rent determination case; It is an expert report.
VI. How Long Does a Rent Determination Case Take?
To the question of how long does a rent determination case take?
- The time between hearings
- The intensity of the court,
- Going exploring,
- Since there are deadlines for submitting the expert report, an exact time cannot be given. However, the answer to the question of how long a rent determination case takes is on average 1-2 years. It is necessary to include appeal and appeal application processes in these periods.
VII. Can a Retroactive Rent Determination Case Be Filed?
A rent determination lawsuit can be filed only to determine the rental price of the rental year in which the lawsuit is filed, or to determine the rental fee starting from the next rental period. Apart from this, a rent determination lawsuit cannot be filed retroactively.
In order to file a rent determination lawsuit with a request to determine the rental price, starting from the rental year in which the lawsuit was filed; There must be a clause in the lease agreement stating that the rental fee will increase every year. If this clause is not included in the rental agreement; The tenant must be notified until 1 month before the expiration of the 5th year of the lease and that a lawsuit for determination of the rental fee will be filed. In this case, the price in the lawsuit filed within the lease year is valid from the beginning of that lease year.
VIII. Can a new rent be requested from the tenant before the decision in the rent determination case becomes final?
If the first instance court decides to accept the case as a result of the rent determination case, the finalization of the decision should be waited. Before the decision becomes final, it cannot be subject to enforcement proceedings or the tenant cannot be expected to start paying the new rent. If the decision becomes final, past rent differences can be collected from the tenant through enforcement proceedings.
The receivable becomes due on the day the decision regarding the rent determination case becomes final. Starting from this day, default interest can also be requested without the need for another warning. The Supreme Court stated that it is possible to evict the tenant with two justified warnings regarding the tenant’s default starting from the date of finalization of the rent difference receivable. (Supreme Court 6th Civil Chamber, 19.12.2000, 2000/10709 Merits, 2000/10820 Decision)
IX. Differences between Lease Adjustment Case and Rent Determination Case
The rent adaptation case and the rent determination case are regulated in different articles of the Turkish Code of Obligations. And it refers to cases that are different from each other. The rent determination case is regulated in Article 344 of the Turkish Code of Obligations.
The lease adaptation case is in Article 138 of the Turkish Code of Obligations; “An extraordinary situation that was not foreseen and not expected to be foreseen by the parties at the time the contract was made, occurs for a reason that does not originate from the debtor, and changes the facts existing at the time of the contract to the detriment of the debtor to the extent that asking for performance from him would be contrary to the rules of honesty, and the debtor has not yet fulfilled his debt or is due to the fact that the performance has become extremely difficult. If the debtor has performed the contract while reserving his rights, he has the right to ask the judge to adapt the contract to new conditions, or to withdraw from the contract if this is not possible. In contracts with continuous performance, the debtor, as a rule, uses the right of termination instead of the right of revocation. The provision of this article also applies to foreign currency debts.” organized as follows.
The lawsuit for adaptation of the rental fee is filed in case of unforeseen circumstances arising at the time the lease was signed. It is a lawsuit filed as a result of the tenant having serious difficulty or impossibility in paying the rent. The court will examine whether there is a real difficulty in performing. Additionally, the court examines whether there is an unforeseen extraordinary situation. Objectively, an extraordinary situation must have occurred.
The COVID-19 epidemic can serve as an example of this situation. As a result of this epidemic, many people were unable to pay their rent and filed a lawsuit for adjustment of the rental fee. In the adaptation case, the judge is not bound by the CPI rate, as in the case of determination of the rental price. Additionally, the lawsuit in question can be filed after an unforeseen situation occurs. Apart from this, it is not tied to any period.
In addition, a lawsuit for determination of the rental fee can only be filed in the case of residences and workplaces with roofs. However, a lawsuit for adaptation of the rental fee can be filed for any kind of real estate lease.
X. Mandatory Mediation in Rent Determination Case
Article 18/B was added to the Law on Mediation in Civil Disputes on March 28, 2023, and it has been regulated as a condition of litigation that a mediator must be consulted before filing a lawsuit in rent disputes. Mandatory mediation is the obligation of the parties to consult a mediator before filing a lawsuit.
Before filing a rent determination lawsuit, an application must be made to the mediation office where the competent court is located. If the parties agree, the new rental fee can be determined by the parties with the mediation report.
If the parties cannot reach an agreement during the mediation process, a rent determination lawsuit can be filed after the minutes of disagreement are prepared by the mediator. If you file a rent determination lawsuit without resorting to mediation, your case will be rejected. Mediation in Landlord Tenant Disputes in Turkey
XI. Can a Rent Determination Case Be Filed in Case of Renewal of the Lease Agreement?
In long-term rental relationships, a renewal agreement can be made. If 5 years have passed since the first contract you made with your tenant, it is possible to file a rent determination lawsuit. However, certain conditions must be met in order for you to file this lawsuit.
For example, the date you rented the residence or roofed workplace to the tenant with the first lease agreement; 01/01/2016. The date you renew your rental contract is 01/01/2020. In this case, more than 5 years will have passed since the first contract. However, only 3 years will have passed since the renewal agreement. In such a case, it is possible to request the rental fee from the court according to the CPI rate based on the rental fee in the rental agreement you signed on 01/01/2020.
In order to request the current / equivalent rental price of your home, you must not have agreed on the current current rental price in the rental agreement you made on 01/01/2020. According to the Supreme Court jurisprudence; The court first examines whether the rental fee in the rental agreement dated 01/01/2020 is the current market value on that date. The rental fee you agreed on on 01/01/2020 may be below the current value. In this case, you can request the current current rental price of your home. However, if you have rented your house at market value, you can only request the increase in the CPI rate to be determined.
The opposite of this view is also defended in the doctrine. According to one view in the doctrine; Even though the parties have signed a new lease agreement, the new agreement is a continuation of the old agreement. For this reason, the five-year period should be calculated from the beginning of the first lease agreement. However, the opinion and jurisprudence of the Supreme Court of Appeals are of the opposite opinion. Decisions regarding the jurisprudence of the Supreme Court on this subject;
- Supreme Court of Appeals 6th Civil Chamber, 2014/12168 Merits, 2014/13712 Decision, 10.12.2014.
- Supreme Court of Appeals 6th Civil Chamber, 2015/5957 Merits, 2016/478 Decision, 27.01.2016.
- Supreme Court of Appeals 3rd Civil Chamber, 2017/5411 Merits, 2018/11236 Decision, 08.11.2018.
- Supreme Court of Appeals 6th Civil Chamber, 2015/6719 Merits, 2015/9762 Decision, 11.11.2015.
XII. Is it a disadvantage for the lessor to accept the rental fees without any reservations?
According to the decision of the General Assembly of the Supreme Court of Appeals, dated 09.02.2005, numbered 2005/3-23 Principles and Decision No. 2005/48, the fact that the tenant has paid an increase less than what is stated in the contract and the lessor has accepted this payment without putting forward any terms and conditions, the case for determination of the rental price cannot be resolved. It does not cause the user to lose the right to open it. Moreover, it is not sufficient to accept the existence of a lease agreement made between the parties with new conditions.
According to the Supreme Court, the lessor’s collection of the rent without reservation does not indicate the existence of an implied agreement. In this case, the agreement to reduce the rental fee must be proven with written evidence. (Supreme Court 6th Civil Chamber, 25.01.2016, 2015/2999 Merits, 2016/337 Decision)
The court decision regarding the determination of the rental price cannot be enforced until it is finalized.
Ece Deniz Vardar
Attorney at Law | Lawyer in Turkey
Landlord Tenant Attorney Services
Call us : +90 212 909 86 34
Send mail : info@ballawfirm.com
