Lawsuit to Determine Rent
Author: Servet Cetin
Practices: Real Estate, Litigation
What is a Rent Determination Case?
A Rent Determination Case is a lawsuit filed to reassess the rental price based on current conditions and market rates, without being limited by the annual rent increase rates stated in the lease agreement. It applies after the relationship between the Lessee and the Lessor has completed its 5th year. This type of lawsuit aims to mitigate the negative effects of inflation in Turkey.
It is important to note that while rents are typically increased each year based on the contract and official inflation rates, the rent determination lawsuit provides an additional right to adjust rents — because annual increases often lag behind market values.
The amount of rent requested at the outset of the lawsuit must be carefully considered, as it cannot be increased once the lawsuit is filed.
When Can a Rent Determination Case Be Filed?
A Rent Determination Case can be filed once 5 years have passed since the contract was signed. The specific duration of the lease is irrelevant; after 5 years, the lawsuit can be initiated in any subsequent year.
Is a Notice Required Before Filing the Case?
As a rule, a notice is not required before filing a rent determination case. However, there are exceptions:
• If there is an increase clause in the contract stating that the rent will increase in each lease period, the rent determined by the court will be valid from the beginning of the lease period in which the lawsuit is filed.
• If there is no such clause in the contract, then a notice regarding the rent determination case must be served no later than 30 days before the start of the new lease period. Otherwise, the rent determined by the court will only be valid from the following new lease period. Therefore, failing to issue a notice may result in the loss of up to 12 months' rent difference.
How is the New Rent Determined by the Court?
Before filing a rent determination lawsuit, it is mandatory to apply for mediation.
After the mediation process concludes and the lawsuit is filed, the court assesses comparable rental agreements and current market prices to set the new rental rate. Additionally, an expert inspection of the property is conducted, resulting in an expert report. Based on this report and other evidence, the court determines the new rent. Given that the tenant is an existing tenant, a discount of 10–20% is typically applied to the calculated market rent.
On average, the first instance trial takes about 1.5 years, and the appellate process takes about 2 years, totaling approximately 3.5 years. However, this period may vary depending on the court’s workload.
The determined rent can only be enforced once the court's decision is finalized. In practice, tenants often appeal the decision to extend the finalization period. However, as the case drags on during the appeal process, the difference between the determined rent and the rent actually paid by the tenant accumulates into a significant lump sum. Tenants, aware that they may be unable to pay this amount all at once, sometimes reach a settlement with the landlord under the pressure of potential foreclosure. Sometimes, tenants may also vacate the property. As a result, in practice, a rent determination case can also effectively become an eviction case.
Ancillary Issues
• Interest cannot be charged on the redetermined rent until the case is finalized. Given Turkey’s high inflation and lengthy court processes, this reduces the effectiveness of the lawsuit.
• In cases involving multiple owners:
i. If the property is held under shared ownership (tenancy in common), each owner may file the lawsuit independently for their respective share.
ii. If the property is held under joint ownership (joint tenancy), all co-owners must file the lawsuit together.
For further information, please contact us at info@cetin.av.tr.
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