Declaratory Judgment Action for Determination of Rent
After the lease relation has been established, changes can be made at any time to the lease agreement. However, for these changes to be valid, they must not be against the tenant. Amendments made to the lease agreement to tenant’s disadvantage after the establishment of the lease contract are invalid. [1]
As stated by the law, the only exception to the prohibition is the determination of the rent. The rent for renewed rental periods cannot be increased freely as the lessor desires. In case of disagreement on the rent to be applied in the renewed rental periods, it will be necessary to file a declaratory lawsuit for determination of rent. Regulations regarding the determination of the rent are contained in Article 343 of the Turkish Code of Obligations No. 6098 and its following.
The lawsuits filed to adapt the rent to the value it deserves by taking into account the current market conditions are called “declaratory judgment action for determination of rent.” There are many factors in determining the rent. Our article focuses on the details of determination of the rent.
Determination of Rent and Conditions
It should be emphasized that the provisions regarding the determination of the rent are applicable for residential and roofed workplace rents. In order to file a rent determination lawsuit; there must be a valid lease contract and there must be legal interest in bringing the lawsuit:
Article 344 of the Turkish Code of Obligations contains a provision regarding the determination of the rent.
According to the article herein;
- If there is an agreement between the parties on the determination of the rent, the rent price is increased according to the agreement, in this case, an action for declaratory judgment for determination of rent cannot be filed. The agreements between the parties regarding the rent price to be applied in the renewed rental periods are valid provided that they do not exceed the change rate according to the twelve-month averages in the consumer price index of the previous rental year.
- If there is no agreement between the parties, a lawsuit for determination of the rent can be filed for the new rent in the renewed lease agreement. If an agreement has not been made by the parties on this matter, the rent is determined by the judge on an equitable basis by 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.
- If the rental price is determined in foreign currency in the contract, no change can be made in the rent until five years have passed, provided that the provisions of the Law on the Protection of the Value of Turkish Currency No. 1567 dated 20/2/1930 are reserved. However, the provision of Article 138 of this Law, titled “Excessive difficulty in performance”, is reserved.
Five-Year Period Regarding Declaratory Judgment Action for Determination of Rent
Regardless of whether the parties have made an agreement to increase the rent, the rent to be applied in the new rental year at the end of five years, or renewed after five years, and at the end of every five years, the rate of change according to the twelve-month averages in the consumer price index as determined by the judge, is determined in an equitable manner by taking into account the situation and the precedent rent prices. For instance, parties that have signed an 8-year lease agreement with a starting date of 03.03.2022 can file a declaratory lawsuit for determination of the rent as of 03.03.2027, when the 5-year period expires.
Judge should determine the rent according to the research method and criteria determined by the Supreme Court. In determining the precedent rental value; the properties of the leased property and the immovable properties that can be regarded as the same in the leased place must be taken as a basis for comparison. [2,3]
The 3rd Civil Chamber of the Court of Appeal demonstrate the way to be followed in its decree no. 2019/79:
While determining the rent, first of all, if the parties have all the evidence, the original or approved copies of the precedent rental contracts should be taken into the file, otherwise, a precedent research should be carried out ex officio, the real estate leased by the expert and the precedents of the parties should be seen and examined one by one, so that the data obtained is concretized and separately with the place in question. (location, environment, nature, usage type, rental start date, rental periods, etc.) all qualities that affect the rental money should be compared, it should be explained with concrete reasons why the precedent rental prices are suitable precedents, in case the immovable subject to the lawsuit is rented again (empty) The rent money that the litigation can bring should be determined, after the rent money that the subject of the lawsuit can bring as explained above, a suitable rent should be determined by the judge (by taking into account the former tenancy of the tenant) according to the rules of rights and negotiation, taking this matter into consideration. In this case, in line with the principles stated above, the Court must determine the rental price that it can bring in case of re-lease of the place subject to the lawsuit through the expert panel of experts, in line with the above-mentioned principles, and then taking into account this rental price, the rental price of the requested period should be appraised according to the rules of right and negotiation.[4]
If the case for determination of the rent has been filed regarding a rental agreement that has lasted less than 5 years; The court is required to decide on a rent by determining the annual CPI rate as specified in the law for the new rent. However, if the case is filed regarding a lease that has lasted less than 5 years despite the increase rate specified in the contract, the lawsuit will be rejected.
Duration of Litigation and Effect of the Decision
Pursuant to Article 345/1 of the TCO, the lawsuit regarding the determination of the rental price can be filed at any time during the renewed rental period.
In the second paragraph of the article, it is regulated from which date the rent determined by the court will bind the tenant. According to the article,
- If the lawsuit is filed until the end of the following new rental period, provided that the lawsuit is filed at the last thirty days before the start of the new period or the lessor has given a written notification to the tenant that the rent will be increased within this period, the rent to be determined by the court for the new rental period. It will bind the tenant from the beginning of the rental period.
- If 30 days notice condition is not fulfilled, the court's decision will be valid for the next rental period.
- If there is a provision in the existing lease agreement between the parties that the rent will be increased, the new rent is determined as a result of the declaratory lawsuits filed before the end of the new rental period, without the need for 30-day periods, will be considered valid as of the start of the new period.
Right to Litigation and Legal Interest
A rent declaratory action can be filed by people who have a legal interest in filing this lawsuit. The rent declaratory action can be filed by the lessor who has the title of owner or not, as well as by the tenant.[5]
In shared ownership, each stakeholder may request the determination of the rent in proportion to their share.[6] If the real property is jointly owned, all partners must jointly file a lawsuit for the determination of the rent. Even if one partner files a lawsuit for the determination of the rent, the other partners can participate in the lawsuit by giving their consent later.
In case the leased property is sold during the lease agreement, the new owner of the leased property has the same rights as the old owner. For this reason, if the leased property is sold while the lease is in progress, the new owner has the right to file a lawsuit.
If the lessor takes delivery of the rent by hand over the same amount as in the previous period or the increase amount that he did not accept, without reservation, in the new rental period, he loses the right to file a lawsuit for rent determination. However, if the rent is deposited into the bank account, a lawsuit for determination of rent can be filed even if the lessor withdraws the amount deposited as the rent for the new term without any reservation. [7,8]
Competent Court of Authority
According to the provision of Article 4/1 of the Code of Civil Procedure numbered 6100, regardless of the value or amount of the subject of the lawsuit; The Civil Court of Peace is the court responsible for hearing the lawsuits regarding all disputes, including the cases arising from a lease relation, of the leased real properties, and the actions filed against these lawsuits.
Action for declaratory judgment for determination of rent; as a rule, is filed at the defendant's residence on the date of the lawsuit or at the place where the contract will be fulfilled, that is, where the real estate is located.[9]
If the parties to the contract are merchants or public legal entities, the civil court of peace in the place determined by the contract is also authorized to hear the case for the determination of the rent.
Conclusion
As a result, determining or not determining the rate of increase in the lease agreement and the duration of the renewed contract are of great importance in declaratory actions for rent. Pursuant to the decision to unify the jurisprudence dated 2/11/1979 and numbered 1/3, rent determination decisions by the court cannot be executed before they are finalized. For this reason, unless the decision itself is finalized, no execution proceedings can be initiated, not even for the trial expenses and attorney fees etc. included in the decision. For such requests, execution proceedings cannot be carried out unless the decision is finalized. [10]
Leyla Sarı
REFERENCES
1. Kırmızı, Mustafa. Rental Law. Ankara: Bilge Publishing House, 2013.
2. The 3rd Civil Chamber of the Supreme Court -2008/1300-5507 31.03.2008
3. The 3rd Civil Chamber of the Supreme Court - 2009/13834-14349 29.09.2009
4. The 3rd Civil Chamber of the Supreme Court –2019/5480 File no. 2019/79 Decree no.
5. Gumus, Mustafa Alper. Rental contract. Istanbul: Vedat Bibliopoly, 2012.
6. The 3rd Civil Chamber of the Supreme Court –2017/7770 File no. 2019/4738 Decree no. 21.05.2019
7. Gumus, Mustafa Alper. Rental contract. Istanbul: Vedat Bibliopoly, 2012.
8. On the contrary, İnceoğlu, Murat/Bas, Ece. The Prohibition of Making Related Contracts in Rental Law, Istanbul University Faculty of Law Journal, 2012.
9. Kırmızı, Mustafa. Rental Law. Ankara: Bilge Publishing House, 2013.
10. General Assembly of Law 2001/423 File no. 2001/456 Decree no.
