ENTRANCE
The tenancy relationship is a contractual relationship that directly affects a wide segment of society, requires continuity, and requires the preservation of economic balance between the parties. Within the framework of the regulations introduced by the Turkish Code of Obligations (TCC) and Law No. 6098, the determination of the rental fee is one of the most important issues in tenancy law.
A rent-fixing lawsuit is a type of declaratory action, not a performance action, filed to redetermine the rent for a leased property in accordance with the principles of equity and fairness. This action may be filed at the request of either the tenant or the landlord and aims to balance the rent in line with market conditions.
DEVELOPMENT
1-) Legal Basis
The legal basis of the rent determination case is based on the provisions of Articles 344 – 345 of the TCC.
TCC Article 344 – Determination of Rental Fee:
-The parties’ agreements regarding the rental fee to be applied in renewal lease periods are valid provided that the change does not exceed the twelve-month average change in the consumer price index in the previous lease year. This rule also applies to lease agreements longer than one year.
-If the parties have not made an agreement on this matter, the rental fee is determined by the judge on an equitable basis, taking into account the condition of the rented property, provided that it does not exceed the rate of change in the consumer price index of the previous rental year, according to the twelve-month average.
-Regardless of whether the parties have agreed on this matter, for leases longer than five years or renewed after five years, and at the end of every five-year period thereafter, the rent applicable in the new lease year shall be determined by the judge in an equitable manner, taking into account the rate of change in the consumer price index based on twelve-month averages, the condition of the leased property, and comparable rental rates. In every lease year following five years, the rent determined in this manner may be amended in accordance with the principles set forth in the preceding paragraphs.
TCC Article 345 – Time limit for filing a lawsuit and the effect of the decision:
-A lawsuit regarding the determination of the rental fee can be filed at any time.
-However, if this lawsuit is filed at least thirty days before the beginning of the new period or before the end of the following new lease period, provided that the lessor has given written notice to the lessee that the rent will be increased within this period, the rent determined by the court will bind the lessee from the beginning of this new lease period.
If the contract contains a valid provision stipulating that the rent will be increased in the new lease term, the rent determined by the court in a lawsuit filed before the end of the new lease term will also be effective from the beginning of this new term. For example, if the contract states that the rent will increase by the 12-month Consumer Price Index (CPI), the contract contains a valid increase clause. However, if the contract states that the rent will increase by the increase in bread prices, the contract will not contain a valid increase clause.
2-) Legal Nature of the Rent Determination Case
Nature of Determination Case: A rent-fixing lawsuit is a declaratory lawsuit aimed at determining the rental amount. In other words, the court determines the rent for the new lease term, not the previous one.
Difference from the Eda Case:As a result of this lawsuit, neither party is obliged to make a direct payment to the other; only the amount of the rental fee is determined.
Forward-looking Effect:The rent determination lawsuit takes effect starting from the rental period in question.
Parties to the case
Plaintiff:The lessor or tenant may request that the rental fee be determined in accordance with current economic conditions.
Defendant:It is the counterparty to the existing lease agreement.
If the tenant is a sub-tenant in terms of party status, there is no right to file a rent determination lawsuit directly; this lawsuit can be filed between the main tenant and the lessor.
3-) Conditions for Filing a Rent Determination Lawsuit
1-) Valid Lease Agreement:To file a rent-fixing lawsuit, the parties must first have a valid lease agreement. This agreement can be written or verbal. However, if no valid lease relationship has been established, a rent-fixing lawsuit cannot be filed.
2-) Finding Legal Benefit:One of the conditions for filing a lawsuit in rental price redetermination cases is the existence of a legal interest. If a party can prove that they have an interest in the redetermination of the rental price and that the current price is insufficient or excessive, they are considered to have a legal interest in filing the lawsuit. Otherwise, the case may be dismissed on procedural grounds.
3-) Mediation Condition (After 01.09.2023):It has become a prerequisite for a lawsuit to be filed to seek mediation before filing a rent-fixing lawsuit. Therefore, if a lawsuit is filed directly without mediation, the case will be dismissed on procedural grounds.
4-) Type of Rented Place (Residential – Roofed Workplace – Field Separation):Rent-fixing lawsuits can only be filed for residential and roofed workplace leases. It is not possible to file a rent-fixing lawsuit for other leases, such as fields, land, vehicles, or movable property. This limitation arises from the fact that Articles 344 and 345 of the Turkish Code of Obligations only cover residential and roofed workplace leases.
4-) When Can a Rent Determination Case Be Filed?
A rent-fixing lawsuit can be filed at any time. If filed at least 30 days before the start of a new lease term, it will be valid for that term; if this period is not met, it will not be valid for the new lease term.If there is a valid provision in the contract stating that the rent will be increased in the new lease period, it can be opened until the end of the new lease period.
Is There an Obligation to Send a Notice?
Sending a notice before filing a lawsuit is not legally required. However, to ensure a valid rent increase at the beginning of the new lease term, even if no lawsuit is filed, the landlord must provide the tenant with at least 30 days’ written notice (notification). This notice can be provided through a notary, a PTT e-telegram, or any other written and verifiable means. This timely notice ensures that the lawsuit takes effect for the new term.
Is the rent amount requested in the notice binding?
– The landlord is not bound by the rent requested in the notice. He or she may file a lawsuit for a higher or lower rent.
Does the rent determination case need to be finalized?
The remaining rent receivable cannot be enforced until the rent determination lawsuit is finalized. The lawsuit must be finalized. As mentioned above, interest can be applied as legal interest from the date of finalization.
5-) Mediation and Procedural Conditions
According to the 2023 reform, mediation is now mandatory as a condition of litigation in rent-fixing cases (effective September 1, 2023). If the dispute is not resolved during this period, litigation begins. Furthermore, the litigation costs are initially paid by the plaintiff; if the case is won, the costs are charged to the defendant.
6-) Determination of Rental Fee
The criteria considered by the court when determining the rental price are as follows:
-Precedent values and market research
-12-month average change in CPI
-Equity (discounting the rent increase based on the economic situation of the parties and the duration of the tenant’s tenancy)
7-) Problems of Time, Proof and Interest
Duration: According to TCC Article 345/1, a lawsuit can be filed at any time; however, if you want to apply it for the new period, the 30-day period must be respected.
Proof:The plaintiff is responsible for proving the existence of the lease and the current rent. This proof can be provided through a written contract, an admission from the other party, or an oath.
Interest:Once the assessment decision becomes final, the retroactive rent difference becomes due and payable. Interest begins to accrue from the date the decision becomes final.
😎 How Long Does the Trial Take? What is the Case Value?
The length of a case varies depending on the speed of mediation, the court’s workload, and the complexity of the dispute. On average, it lasts between six months and two years. Generally, during the preliminary examination (the first hearing), the file is sent to an expert. Following the expert report, the judge evaluates the parties’ objections. If the judge decides to obtain a new report, a hearing date is set. Rent determination cases typically last between six months and two years, depending on the province and court where the case is filed.
Conclusion
Rent-fixing lawsuits are an important legal mechanism based on the TCC, specifically used to determine the fair rent. When the procedural requirements—mediation, 30-day notice, and a five-year waiting period—are met, they become an effective tool in practice. Precedent research, market values, and elements of fairness are valuable. Proper execution of the process and, if necessary, seeking expert legal assistance increases the likelihood of a favorable outcome.
MOST WONDERED QUESTIONS ABOUT THE RENT DETERMINATION CASE
1-) What is a rent determination case?
A rent determination lawsuit is a lawsuit that can be filed by the tenant or the landlord in order to bring the rent in line with market conditions and in which the court is requested to re-determine the rent.
2-) Who can file a rent determination lawsuit?
Both the tenant and the landlord can file this lawsuit; the tenant can file a lawsuit when he thinks the rent is too high and the landlord when he thinks it is too low.
3-) Which types of leases are within the scope of this case?
It is only valid for residential and roofed workplace leases; it is not valid for leases other than residential and roofed workplace leases.
4-) Is mediation mandatory?
Yes. As of September 1, 2023, mediation has become a prerequisite for rent determination cases; lawsuits cannot be filed before this process is completed.
5-) What is the 5-year waiting period?
After the five-year term of the contract expires, a claim can be made based on comparable rents. In cases filed before this period expires, the court can only rule based on factors such as the Consumer Price Index (CPI). The five-year waiting period in the lease agreement can be reduced by the parties. In this case, a rent-fixing lawsuit can be filed without the five-year waiting period. Furthermore, the lessor is not required to file a lawsuit in the fifth year. A lessor who has never filed a rent-fixing lawsuit can file a rent-fixing lawsuit in the ninth year.
6-) Which is the competent court?
The competent court is the Civil Court of Peace. The competent court is the court where the leased property is located or the court where the defendant resides.
7-) What are the types of evidence?
Evidence such as lease agreement, comparable lease documents, notice, expert report, witness statement can be used.
😎 What is the role of the expert?
The court determines the rental price by evaluating the characteristics of the property, market conditions and comparable prices through an expert.
9-) When does the decision begin to have consequences?
If a lawsuit is filed or a notification is made to the court at least 30 days before the start of the lease period, the decision will be valid from the beginning of that period; otherwise, it will be valid from the next period.If there is a valid provision in the contract stating that the rent will be increased in the new lease period, it can be opened until the end of the new lease period.
10-) Can a retroactive rent difference be requested?
Yes; if the decision becomes final, it will be valid from the rental period in which the lawsuit was filed and the difference for the previous period can be requested.
11-) Can the decision be executed before it becomes final?
No. Since the rent determination decision is declaratory, enforcement proceedings cannot be initiated before it is finalized.
12-) How long is the trial period? What is the value of the case? What is the limit of appeal?
Opened for the purpose of determining the monthly rental feeIn these cases, the decision and judgment fees should be calculated based on the difference between the monthly rental amount awarded and the monthly rental amount already paid. Indeed, the Supreme Court of Appeals has also ruled on this matter.Supreme Court Decision – 3rd HD., E. 2024/970 K. 2024/3821 T. 25.11.2024:
| “…In lawsuits filed for the determination of the monthly rental fee, the decision and judgment fee should be collected based on the difference between the monthly rental fee decided and the monthly rental fee paid in advance. |
–In rent-fixing cases, the appeal threshold is determined by the annual rent. The claim value is the difference between the requested monthly rent and the current monthly rent. In rent adjustment cases, the claim value is the difference between the requested annual rent and the current annual rent. The claim value of a rent-fixing case and the claim value of a rent adjustment case are often confused. The procedure is as described above.
-The average trial period is between 6 months and 2 years. This period can be shortened if all evidence is presented completely.
13-) Is a notice required?
It’s not legally mandatory, but a notice can determine the timeframe for filing a lawsuit. Lease litigation requires expertise, and it’s crucial to have a qualified attorney review your contract, determine the legal action plan, and file a lawsuit based on the specific clauses.
14-) Will the increase based on CPI be applied?
In particular, increases may be made according to the CPI rate in lease relationships shorter than 5 years; in cases after 5 years, comparable rent and equity criteria are taken into account.
15-) Should the rent amount be stated in the petition?
The rental fee must be clearly stated; a mere request for determination is not sufficient.
COURT OF APPEALS DECISIONS REGARDING THE RENT DETERMINATION CASE
1-) Supreme Court Decision – 3rd HD., E. 2017/5586 K. 2019/435 T. 23.1.2019:
| “…In this case, in order for the plaintiff to request the determination of the rental fee as of 01.01.2015, the date on which the contract was renewed, the lawsuit must be filed at least thirty days before the beginning of this period or the lessor must have given the tenant a written notice that the rental fee will be increased within this period. |
2-) Supreme Court Decision – 3rd HD., E. 2017/6552 K. 2019/2619 T. 27.3.2019:
| “…If there is a provision in the contract that the rent will be increased during the new lease period, the rent determined by the court in the lawsuit filed before the end of the new lease period will also be valid from the beginning of this new period. |
3-) Supreme Court Decision – 3rd HD., E. 2017/8186 K. 2019/5879 T. 27.6.2019:
| “…Regardless of whether the parties have agreed on this matter, in lease agreements longer than five years or renewed after five years, and at the end of each subsequent five-year period, the rent applicable in the new lease year shall be determined by the judge in an equitable manner, taking into account the rate of increase in the producer price index, the condition of the leased property, and comparable rental rates. The rent determined in this manner in each subsequent five-year lease year may be changed in accordance with the principles set forth in the preceding paragraphs. |
4-) Supreme Court Decision – 3rd HD., E. 2021/3200 K. 2021/6064 T. 7.6.2021:
| “…The rental fee must be determined based on the contract’s inception date and the principles of equity and fairness. According to the Law No. 2/4 of the Turkish Commercial Code dated November 18, 1964, and established Supreme Court practices, and in accordance with the principle of “fairness and fairness,” the judge, when making this limitation, must first include the original or certified copies of comparable rental agreements in the file if the parties have all the evidence. An expert should individually examine the leased property and the parties’ comparables. The resulting data should be concretized, and all the factors affecting the rental fee should be compared with the subject property (location, surroundings, characteristics, usage, lease start date, lease terms, etc.). The reasons for whether the comparable rental fees are suitable comparables should be explained with concrete reasons. The rent that the subject property could fetch if it were to be rented out vacant again should be determined. The judge should then consider this rental fee and rule on a reasonable rental fee that is consistent with the parties’ expected purposes from the lease agreement, particularly the rights and fairness of the property. |
5-) Supreme Court Decision – 3rd HD., E. 2024/970 K. 2024/3821 T. 25.11.2024:
| “…In lawsuits filed for the determination of the monthly rental fee, the decision and judgment fee should be collected based on the difference between the monthly rental fee decided and the monthly rental fee paid in advance. |
The Importance of Legal Support
Tenancy law, eviction cases, and contractual disputes require technical knowledge, legislative expertise, and in-depth expertise in judicial practices. While the legal provisions are clear, each case has its own unique circumstances, and even a small mistake can lead to loss of rights. Therefore, working with an experienced attorney from the beginning of the process is crucial to determining the right strategy, protecting your rights, and achieving the swiftest resolution.
It’s important to remember that every step taken during the litigation process has legal and financial implications. A professional lawyer will guide you not only in preparing the petition but also in gathering evidence, representing the court, negotiating, and pursuing potential alternative solutions.
In order not to risk your rights and to manage the process safely, it is recommended that you consult a specialist lawyer.