INTRODUCTION
Rapidly increasing inflation has led previously set rent and rent increase rates to become disconnected from reality. Moreover, Law No. 7409 and 7456 limiting rent increase rates to significantly lower levels, to 25%, despite higher inflation deepens the issue. This situation creates problems for both tenants and landlords, resulting in disputes.
Rent determination lawsuits are regulated under the Turkish Code of Obligations and can be initiated by tenants, property owners, and landlords in residential and commercial lease relationships. This article will cover the definition, requirements, outcomes, and frequently asked questions related to rent determination lawsuits.
What is a rent determination lawsuit?
A rent determination lawsuit is a legal case that allows the rent to be determined by a judge independently of the amount specified in the contract. It is regulated under Article 344 of Turkish Obligation Code, titled "Determination of Rent," stating that the rent for each new rental year should be determined based on the twelve-month average change rate in the consumer price index, the condition of the property, and rents of similar flats. Thus, the judge determines the rent considering various conditions and the mutual benefit of the parties.
The competent court for rent determination lawsuits
The competent court for rent determination lawsuits is the court where the defendant resides or where the immovable property is located. This type of lawsuit does not have a definitive jurisdiction rule. However, in the case of the parties being merchants or public legal entities, a jurisdiction agreement will be valid, and the designated court chosen by the parties will have jurisdiction.
The competent court for rent determination lawsuits
The competent court for rent determination lawsuits is the court of peace (sulh hukuk mahkemesi). According to Article 4 titled "Jurisdiction of Courts of Peace" in the Code of Civil Procedure, courts of peace are responsible for resolving all disputes related to rental relationships, including rent claims arising from leased immovable properties, separate from the provisions regarding the non-executory eviction of leased immovable properties under the Law on the Execution and Bankruptcy No. 2004.
Conditions for rent determination lawsuit
Once the conditions for the rent determination lawsuit are met, legal action can be initiated. The first essential condition is that the lease contract must have been established as either an oral or written agreement. Additionally, it can be filed only for residential or commercial property. Apart from these conditions, the following requirements are also considered.
When can a rent determination lawsuit be filed?
Article 345 of the Turkish Code of Obligations states that a rent determination lawsuit can be filed at any time. However, in practice, parties often wish to increase the rent by a higher rate than stipulated in the contract. The most critical condition for a rent determination lawsuit is the time condition, and the starting date of the contract plays an essential role in determining this period. According to Article 344/3, the judge determines the rent after five years have passed since the commencement of the lease or at the end of each subsequent five years. Therefore, if a rent determination lawsuit is filed before five years period, the case will be dismissed. In such cases where the rent is considered low, a rent adjustment lawsuit may be filed.
Notification condition for a rent determination lawsuit
Another essential requirement for a rent determination lawsuit is the notification condition. This can be accomplished by either directly filing a lawsuit or sending a formal notice. The notice must be sent to the recipient through a notary public. The notice will be effective for the new rental period and must be delivered at least 30 days before the beginning of the new period. Otherwise, the rent determination lawsuit will not be meeting the notice requirement for the new period, and the rent for the desired period will not be determined. Therefore, the notice must be sent at least 30 days before the new period to meet the condition for a rent determination lawsuit. Otherwise, the rent will be determined for the following year.
Determination of rent according to the contract
Article 345/3 states that if there is a provision in the contract regarding the increase in the rent for the new rental period, the rent is determined by the court according to the contractual provision. For instance, in case the contract specifies a 25% increase rate, and the landlord wishes to impose a 50% increase, the tenant can file a lawsuit to request that the amount to be determined according to the contract.
Frequently Asked Questions
Can a rent determination lawsuit be filed before 5 years?
Relatively, yes. A rent determination lawsuit can be filed before 5 years have passed, but if there is a provision in the contract regarding the increase, the determined amount cannot exceed that provision. The deviation from the specified amount in the contract can occur after 5 years.
Is a notice by a notary public required for a rent determination lawsuit?
No, issuing a warning notice is not the only condition for a rent determination lawsuit. The lawsuit can be filed without sending a notice, and as long as the requirements stated in the Turkish Code of Obligations are met, the lawsuit will be valid.
When can a rent determination lawsuit be filed?
A rent determination lawsuit can be filed at any time. However, to be able to make an increase higher than the amount specified in the contract, you need to wait for 5 years.
How long does a rent determination lawsuit take?
It is not possible to provide a certain answer regarding the duration of a rent determination lawsuit. However receiving support from an expert Turkish real estate lawyer may significantly lower the time it takes.
Can a rent determination lawsuit be retroactively filed?
A rent determination lawsuit cannot be filed retroactively. However, the determined amount can be collected retroactively after the court decision.
How is the rent amount calculated in a rent determination lawsuit?
The rent in a rent determination lawsuit is determined by the judge, considering the twelve-month average change rate in the consumer price index, the condition of the rental property, and the rent of similar flats, ensuring fairness.
When should the notice for a rent determination lawsuit be sent?
The notice for a rent determination lawsuit must be sent at least 30 days before the new rental period. Sending the notice 1-2 weeks earlier considering possible delays in the notification process would be beneficial.
Who pays the court costs for a rent determination lawsuit?
At the beginning of the lawsuit, the plaintiff (party filing the lawsuit) pays the court costs. At the end of the trial, if the plaintiff wins, the costs are collected from the losing party, and the plaintiff is refunded the amount they paid.
Is the rent determination lawsuit subject to mediation?
Yes, with the law on the Amendments on the Execution and Bankruptcy Law and Other Laws No. 7445, also known as the 7th Judicial Reform Package, and the Law No. 6325 on Mediation in Civil Law Disputes, disputes arising from tenancy relationships have been included within the scope of mandatory mediation. Since the regulation will enter into force on September 1st, 2023, it will be mandatory to resort to mediation for cases filed after this date.
Outcome of a Rent Determination Lawsuit
With the court order rent for the claimed period is determined, and if there is a difference between the determined amount and the amount actually paid, retroactive execution can be carried out. Before filing a lawsuit, it is crucial to ensure that the conditions for a rent determination lawsuit are met to avoid loss of rights and time. Considering the time this lawsuit might take and the dispute between the parties seems unresolvable, eviction of the tenant is another option at hand. Consulting a real estate lawyer for a rent determination lawsuit or rent adjustment lawsuit can help expedite the resolution of your problems. Therefore, in cases concerning rent determination lawsuits in Turkey seeking advice from a real estate law firm in Turkey is essential.
Originally published 05 July 2023
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.