Tenancy relationships can lose their economic sustainability over time for both landlords and tenants. Especially in long-term in tenancy agreements, it is a frequently encountered problem that the current rental price remains well behind current market conditions. In this case, the parties have the right to request the redetermination of the rental fee. It is precisely at this point that the “rent determination lawsuit” comes into the picture.
In this article, we will provide detailed answers to questions such as how rent increases are made after 5 years, the conditions for a rent determination lawsuit, and whether a lawsuit can be filed for a 10-year lease agreement, as well as touching upon special situations such as commercial property rent determination lawsuits.
What is a Rent Determination Lawsuit?
Rent determination lawsuit, Turkish Code of Obligations’It is a type of lawsuit regulated under Articles 344 and 345 of the . With this lawsuit, the court is requested to redetermine the rent amount written in the existing lease agreement in accordance with the market rate. The lawsuit can be filed by both the lessor and the tenant.
In which circumstances can a rent determination lawsuit be filed?
- for tenancy agreements reaching the 5-year mark (Turkish Code of Obligations Art. 344/3)
- for rent increases limited according to the CPI in contracts older than 5 years (Turkish Code of Obligations Art. 344/1)
- In cases where the parties cannot agree on the rent increase
- In cases where a formal notice is sent within a specified period before the transition to a new rental period
Can a rent determination lawsuit be filed before 5 years have passed?
As a general rule, it is not possible to file a rent determination lawsuit before the 5 years have elapsed. However, in accordance with an exceptional Court of Cassation ruling, even if the 5-year period has not yet elapsed when the lawsuit is filed, if this period expires during the proceedings, the lawsuit may continue without a decision of dismissal being made.
Example:
If the 5 years have been completed during the lawsuit filed in 2022 for a tenancy agreement starting in 2018, the court may rule for the determination of the rent for the 2023 period.
What are the conditions for a rent determination lawsuit?
Basic conditions for filing a rent determination lawsuit:
- The rental agreement having continued for a period of at least 5 years
- Filing a lawsuit or sending a formal notice before the start of the new rental period
- A lawsuit can be filed whether or not there is a provision regarding the rent increase in the contract
- The compulsory nature of the mediation process (as a legal prerequisite for filing a lawsuit)
This lawsuit can be brought for both residential and commercial leases.
Time Limit for Filing a Rent Determination Lawsuit
A rent determination lawsuit can be filed at any time. However, in order for a decision to be obtained that is valid from the beginning of the rental period for which the determination is requested:
If there is a rent increase clause in the agreement, a lawsuit can be filed until the end of the tenancy year.
If there is no such provision → at the latest 30 days before the start of the new rental year A lawsuit must be filed or a formal notice must be served.
10-Year Lease Agreement and Rent Determination
Even if the contract term is 10 years, a rent determination lawsuit can be filed upon the completion of the 5th year. Since long-term 10-year lease agreements can cause serious losses to the detriment of the lessor, filing a lawsuit for a rent increase after 5 years is legally possible and often necessary.
What is the Difference Between a Rent Determination Case and a Rent Adaptation Case?
A rent determination lawsuit aims to readjust the rent amount in accordance with current market conditions.
A rent adaptation lawsuit, on the other hand, concerns making the current rent amount fair due to extraordinarily changing circumstances (for example, a pandemic or economic crisis).
How to File a Rent Determination Lawsuit?
- An application for mediation is made.
If no agreement is reached through mediation, the final minutes are attached to the statement of claim. - An application is made to the competent court.
The competent court is the Magistrates' Court of the place where the leased property is situated or where the defendant is domiciled.
How does a judge determine the rent increase?
The judge considers the following criteria when making a decision:
- CPI’the 12-month average rate of change in
- Physical and environmental characteristics of the rented property
- Comparable rental values (supported by an expert report)
- Equity discount (usually %5-20)
Therefore, the expert rental determination report for the case file, the rental prices of similar properties in the surrounding area and inspection requests must definitely be included.
Value Subject to Fees in Rent Determination Lawsuits
In the rent determination lawsuit, the court fee is calculated based on the difference in rent. Between the current rent and the requested new rent amount 1-year gap Character is the real value.
Example:
Current rent: 5,000 TL
Requested rent: 10,000 TRY
The difference: TRY 5,000 x 12 = 60,000 TL taxable value
What Happens if There is an Eviction After a Rent Increase Lawsuit?
Eviction of the tenant while a rent determination lawsuit is ongoing does not dismiss the case. The rent amount for the period requested for determination continues to be determined and can be collected from the tenant after the judgment becomes final.
When Does Interest Begin in Rent Determination Lawsuits?
The rent difference can only be put into enforcement after the court decision becomes final. Interest also starts to accrue from this date onwards. Neither the date of the lawsuit nor the date of the decision is considered the start date for interest.
How long does a rent determination lawsuit take?
The duration of lawsuits varies depending on the workload of the courts. In Magistrate Courts in major cities, the average duration of these cases is 6 to 12 months can vary between.
Rent Determination Lawsuit Attorney Fee
Legal fees vary depending on the rent difference, the nature of the work and the tariff rate determined by the lawyer. According to the 2024 Minimum Attorney Fee Tariff, The lower limit for the rent determination lawsuit is 18,000 TRY, whereas according to the Ankara Bar Association's recommended tariff, £43.875’is.
Can a rent determination lawsuit be filed before 5 years have passed?
Generally no, but if the 5 years are completed during the course of the lawsuit, the court may rule for the next period.
Is a formal notice required to file a rent determination lawsuit?
It is not compulsory, but in some cases (especially if there is no escalation clause in the contract), sending a formal notice before filing a lawsuit can make the lawsuit valid.
Are the same rules applicable to commercial property rentals?
Yes, the rules for rent determination lawsuits for residential and roofed workplaces are the same.
Result
Rent increase lawsuits aim both to protect the landlord's rights and to ensure the tenant's legal security. Parties who experience disagreements regarding rent increases, particularly after 5 years, must fulfil the conditions of a rent determination lawsuit and conduct the process within a legal framework. In this process professional legal advice taking it will ensure the process progresses more quickly and effectively.
