RENT DETERMINATION CASE
Recently, especially as a result of the increasing inflation and economic conditions in our country, rental prices remain below the current market price. For this reason, landlords file a rent assessment lawsuit against their tenants in order to determine the rental price according to the current market price.
The rent determination lawsuit refers to the lawsuits filed in order to increase or decrease the rental price determined at the time of the establishment of the contract in residential and roofed workplace lease agreements, renewed lease periods in fixed-term contracts, and the contract continues in indefinite-term contracts. ederkn In our related article, information will be given about the rent determination lawsuit.
What is the Concept and Legal Nature of Rent Determination Lawsuit?
A rent determination lawsuit is a type of lawsuit that can be filed by the lessor or the lessee, in which an increase or decrease in the current rental price is requested. During the execution of the lease agreement, the parties may freely determine the rental price. However, the parties may request a change in this rental price in the new lease period. According to Article 344 of the Turkish Code of Obligations No. 6098 (“TCO”); “The agreements of the parties regarding the rental price to be applied in the renewed lease periods are valid, provided that they do not exceed the rate of deflation according to the twelve-month averages in the consumer price index in the previous lease year. This rule shall also apply to lease agreements with a term longer than one year.
If the parties have not made an agreement on this matter, the rent shall be determined by the judge in accordance with equity, taking into account the condition of the leased property, provided that it does not exceed the rate of change in the consumer price index of the previous lease year according to the twelve-month averages.
Regardless of whether an agreement has been made by the parties on this matter or not, in lease agreements with a term longer than five years or renewed after five years and at the end of each subsequent five years, the rental price to be applied 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 according to the twelve-month averages, the condition of the leased property and the comparable rental prices. The rent determined in this manner in the lease year after each five years may be changed according to the principles in the previous paragraphs.
If the parties cannot agree on the rent for the new lease period, they may file a rent determination lawsuit and request the court to determine the rent.
However, if the lease agreement is for less than 5 years and the parties have not made an agreement on this issue, the rent to be determined in the new period is determined by the judge according to equity, taking into account the condition of the leased property, provided that it does not exceed the rate of change in the consumer price index of the previous lease year according to the twelve-month averages.
For lease agreements longer than 5 years, regardless of whether there is any agreement between the parties or not; the rental price will be determined by taking into consideration the condition of the leased property and conditions such as precedent rental prices and market prices. In this case, it would be appropriate to investigate the prices of other rental apartments in the same situation while determining the rental price.
What are the Conditions for a Rent Determination Case?
In order to file a rent determination lawsuit, the following conditions are required. These are
• There must be a lease agreement between the parties. This contract may be in writing or verbal. There is no written requirement.
• The parties must have a legal interest in filing the lawsuit. What should be understood here is that; if the parties have already determined a rental price for the new lease period in accordance with the legal limits and the law, then there is no legal interest in filing a lawsuit for the determination of the rental price.
• The lease relationship between the parties must have been continuing for more than 5 years or there must be no provision in the lease agreement regarding the manner in which the rent increase for the renewed lease period will be realized.
In order to file a lawsuit for the determination of the rental price, the above-mentioned conditions must be present together. Otherwise, the lawsuit will be rejected.
What is the Time Period for Filing a Rent Determination Lawsuit?
Pursuant to Article 345 of the TCO; “A lawsuit for the determination of the rental price may be filed at any time.” However, if this lawsuit is filed at the latest thirty days before the beginning of the new lease period or until the end of the following new lease period, provided that the lessor has notified the lessee in writing that the rent will be increased within this period, the rent to be determined by the court shall bind the lessee as of the beginning of this new lease period.
If there is a provision in the contract that the rent will be increased in the new lease period, the rent to be determined by the court in the lawsuit to be filed until the end of the new lease period shall be valid from the beginning of this new period.”
Pursuant to the Law, there is no prescription period or statute of limitations for the filing of a rent determination action. In this respect, the lawsuit for the determination of the rent can be filed at any time. Therefore, if the parties want the new rent to be determined by the court to be valid from the beginning of the new lease period, they must have filed the lawsuit at least 30 days before the new lease period or notified the other party in writing at least 30 days in advance. If these conditions are met, the new rental price to be determined by the judge is valid from the beginning of the new lease period.
From which date is the determined rent valid?
If one of the conditions listed below is realized, the determined rent will be paid;
1. If the rent determination lawsuit is filed 30 days before the start of the new lease period,
2. If a notice is served on the other party within the 30-day period,
3. If a rent increase clause is agreed upon by the parties in the contract, it shall be valid from the beginning of the rental period in the period when the lawsuit is filed.
What is the Competent and Authorized Court in Rent Determination Case?
Pursuant to Article 4 of the Code of Civil Procedure No. 6100 (“CCP”), the court of competent jurisdiction is the Civil Court of Peace. The competent court is the court of the defendant’s domicile on the date of filing the lawsuit pursuant to Article 6 of the CCP or the court of the lessor’s domicile pursuant to Article l O of the CCP.
Are Lease Disputes within the Scope of Mediation as a Condition for Litigation?
Disputes arising from the lease relationship (excluding eviction through execution without writ of execution), disputes regarding the elimination of partnership, disputes arising from condominium ownership and disputes related to neighboring rights were included in the scope of mediation as a condition of litigation as of September 2023. Within this framework, it has become mandatory to apply to the mediator before filing a lawsuit for disputes arising from rent determination cases. Lawsuits filed without fulfilling the requirement to apply to the mediator will be procedurally rejected.
Conclusion
In the last few years, the rapid increase in the number of rent fixation cases has become a prominent issue among the judicial proceedings. However, despite these cases, it is a fact that rent fixation cases are not fully understood and may still be subject to misapplications.
In practice, one of the most common misconceptions regarding rent assessment actions is that such actions cannot be filed before 5 years only by the lessor. However, as explained above, in the absence of a rent increase clause in the lease agreement, anyone who is a party to the lease agreement may file a rent assessment action without being subject to any time limitation. The 5-year time limit rule may come into effect if there is a provision on rent increase in the lease agreement. The filing date of the lawsuit is effective in determining when the new rent will enter into force. Finally, it is clear that the mandatory mediation practice introduced as of September 2023 will lead to better results both financially and morally for both parties.