LEASE DETERMINATION LITIGATION 18 September 2023
What is a Lease Determination Litigation?
The lawsuit filed for the adaptation of the rental price to the value it deserves, taking into account the current market conditions, is called the rent determination lawsuit.
In which cases can a rent determination lawsuit be filed?
Pursuant to Article 344 of Turkish Obligation Law numbered 6098, Lease Determination Litigation can be filed:
- If an increase in rent is determined above the legal limit,
- If the parties cannot agree on the rent increase rate,
- In cases where the lease agreement lasts more than five years, it can be opened for re-determination regardless of inflation.
For which immovables can a rent determination lawsuit be filed?
The rent determination lawsuit can be filed only in disputes arising from the rents of residences and roofed workplaces. In this case, this lawsuit will not be filed for rents of vehicles, machinery or immovable properties that cannot be considered as "residence and roofed workplace" (for example, an immovable in the nature of a field).
What are the terms of the rent determination case and who can open it?
The filing of a rent determination lawsuit depends on certain conditions. First of all, it is necessary to have a written or verbal rental agreement. Another condition is the "legal interest" condition. In cases where these conditions are met, the owner, lessor and lessee can file a rent determination lawsuit.
Which is the competent court in the case of rent determination?
The court in charge of this case is the magistrates' courts; The competent court is the court of the place where the subject property is located.
When can a rent determination case be opened?
The lawsuit for the determination of the rental price can be opened at any time for the determination of the new rental price in the rental agreement to be renewed. The date the lawsuit is filed is the factor determining the date on which the new rental price will be valid. For this reason, the date of the lawsuit is also very important.
From which month is the determined monthly rental fee will be valid?
The rental price to be determined by the court (if filed until the end of the following new rental period), provided that the rent determination lawsuit is filed at the latest 30 days before the start of the new period or the lessor has given a written notification to the lessee that the rental price will be increased within this period. If there is a provision in the contract that the rental price will be increased in the new rental period, the rental price to be determined by the court in the lawsuit to be filed until the end of the new rental period will also be valid as of the beginning of this new period.
How does the judge determine the rent in the rent determination case?
The criteria used by the judge when determining the rent vary according to how many years the contract has been renewed. In lease agreements that are renewed for less than five years, the parties' agreements regarding the rental price to be applied in the renewed rental periods are valid, provided that they do not exceed the change rate in the consumer price index in the previous rental year according to the twelve-month averages. This rule also applies to lease agreements for more than one year. If an agreement has not been made by the parties on this matter, the rental price is determined by the judge on an equitable basis, taking into account the situation of the leased property, provided that it does not exceed the change rate according to the twelve-month averages in the consumer price index of the previous rental year.
In lease agreements that last longer than five years or are renewed after five years, regardless of whether an agreement has been made by the parties on this subject, at the end of every five years, the rental price to be applied in the new rental year, the rate of change according to the twelve-month averages in the consumer price index by the judge, the status of the leased property. The rental price determined in this way in the next five years may be changed according to the principles in the previous paragraphs.
Can a rent determination lawsuit be filed if there is a lease with foreign currency?
If the rental amount is determined in foreign currency in the contract, no change can be made in the rental price until five years have passed, provided that article 138 of the Turkish Code of Obligations is reserved. However, in the determination of the rental price after five years, the change rate in the consumer price index according to the twelve-month averages in the consumer price index is determined by the judge, taking into account the changes in the value of the foreign currency, in accordance with the condition of the leased property and the equivalent rental values.
