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FAQs on Rent Determination Lawsuits

FAQs on Rent Determination Lawsuits

What is a Rent Determination Lawsuit?

Due to fluctuating economic conditions and high inflation rates in Turkey, disputes frequently arise between landlords and tenants. Rent determination lawsuits are initiated when the parties fail to agree on the rental amount, enabling a court to establish the rent. It is important to note that such lawsuits can only be filed for residential properties and leased workplaces. They are not applicable for the rent of land, vehicles, or other movable properties. Additionally, rent determination lawsuits are strictly for establishing and fixing the rental price. Claims for backdated rent differences cannot be included in these lawsuits. Court decisions in these cases cannot be directly enforced; separate legal procedures must be followed for enforcement.

The legal basis for rent determination lawsuits is Article 344 of the Turkish Code of Obligations. It allows the court to adjust the rent to market conditions for rental agreements exceeding five years, regardless of any agreement between the parties on this matter.

What are the Conditions for Filing a Rent Determination Lawsuit?

Both landlords and tenants can initiate rent determination lawsuits. There is no specific timeframe or deadline for filing. However, the effective date of the new rent amount depends on when a notice was sent to the tenant before the lawsuit and the terms of the rental agreement.

Key conditions include:

  • Existence of a Rental Agreement: Although rental agreements can be verbal or written, written agreements are recommended for ease of proof.
  • Legal Interest: Under Article 345 of the Turkish Code of Obligations, there must be a legal interest in determining the rent. If the current rent is significantly lower than comparable properties, this is considered as a valid legal interest by courts.
  • Five-Year Period: The rental agreement must have been in effect for at least five years. Lawsuits filed before this period are dismissed by courts. Moreover, mediation process should be initiated after the five-year period. If the mediation process is initiated before the five-year period and the lawsuit filed after this period, still it will be dismissed by courts.

Is Issuing a Notice Mandatory?

Even lawyers can have different evaluations about this issue so detailed explanation is seemed necessary. Issuing a notice is not mandatory to file a rent determination lawsuit. However, the timing of the notice can influence the effective date of the new rent determined by the court. According to Article 345 of the Turkish Code of Obligations (TCO), if the rental agreement includes a provision regarding the increase of the rent for the new rental period, the rent determined by the court in a lawsuit filed until the end of the new rental period will also be valid retroactively as of the beginning of that new period.

For example:

  • If the rental agreement includes a clause stipulating annual rent increases based on a specified index (e.g., TÜİK inflation rates), lawsuits can be filed at any time after five years without issuing a notice.
  • In the absence of such a clause, issuing a notice becomes necessary to establish a new rental amount.

Is Mediation Mandatory Before Filing a Lawsuit?

As of September 1, 2023, mediation is a mandatory prerequisite for rent determination lawsuits. If mediation fails, the lawsuit can be filed with a record of unresolved mediation proceedings.

Which Court Handles Rent Determination Lawsuits?

Such lawsuits are filed in the Civil Courts of Peace located in the jurisdiction of the rented property’s address.

How is the New Rent Amount Determined by the Court?

The court considers the following factors when determining the rent:

  1. Twelve-month average of the Consumer Price Index (CPI).
  2. The condition and characteristics of the rented property.
  3. Comparable rental rates of similar properties.

During the proceedings, an expert assesses the property’s attributes, such as its location, size, condition, and intended use, and evaluates comparable rents. Additionally, courts may apply a fairness adjustment of 5% to 15% to the determined rent to account for long-term tenancy.

Can the Lawsuit be Amended During the Proceedings?

The Turkish Supreme Court has ruled that rent determination lawsuits cannot be filed as partial lawsuits, nor can claims be amended during the proceedings. This underscores the importance of accurately determining the rent amount to be claimed when filing the lawsuit.

Can an Eviction Lawsuit Be Filed Simultaneously?

Yes, rent determination lawsuits and eviction lawsuits can be pursued simultaneously as their subject matters differ. For instance, a landlord may file a rent determination lawsuit due to low rent while also filing an eviction lawsuit based on personal need. The rent determination case will continue even if the tenant vacates the property during the proceedings.

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