What is a Rent Adjustment Case?
A rent adjustment lawsuit is a lawsuit filed in order to reorganize the terms of the contract if the lease agreement has become excessively burdensome for the parties due to extraordinary economic conditions. Article 138 of the Turkish Code of Obligations Accordingly, if unforeseen extraordinary circumstances arise after the conclusion of the contract, which make it excessively difficult for the obligor (lessee) to fulfill its obligations, the court may be asked to modify the terms of the contract.
A rent adjustment lawsuit may be filed especially in extraordinary circumstances such as high inflation, economic crises, major changes in exchange rates or pandemics. The main purpose of such lawsuits is to reorganize the lease agreement in a fair manner and to maintain the balance between the parties.
Under Which Circumstances is a Rent Adjustment Lawsuit Filed?
A rent adjustment lawsuit may be filed in the following cases:
- The rent reaches exorbitant levels due to the economic crisis or inflation: If the tenant has extreme difficulty in paying the rent, he/she may request an adjustment from the court.
- Excessive exchange rate fluctuations in foreign currency lease agreements: Significant changes in the exchange rate can make the contract unbearable for one of the parties.
- The impact of extraordinary circumstances such as a pandemic, natural disaster or war: Businesses that are unable to pay rent due to business closures, cessation of economic activity or restrictions may bring an adaptation action.
- Long-term lease and changing economic conditions: In long-term lease agreements, changing economic conditions over time may create victimization for one of the parties.
In order to file a rent adjustment case, the terms of the contract must have changed excessively and this must adversely affect the debtor’s (tenant’s) solvency.
Who Can File a Rent Adjustment Lawsuit?
The following persons can file a rent adjustment lawsuit:
- Tenants If the rent has increased excessively in accordance with economic conditions, they may file a lawsuit to reduce the rent.
- Landlords If the rent is too low due to inflation and needs to be updated, the landlord can also bring an adaptation action.
- Business owners: Businesses whose obligation to pay rent has been aggravated by the pandemic, economic crisis or other extraordinary circumstances may request a rent adjustment.
If the court finds that the claimant is right, it may order a change in the rent.
Conditions for Rent Adjustment Lawsuit
In order to file a rent adjustment case, the following conditions must be met:
The contract must be ongoing: The lease agreement must still be in force. An adaptation action cannot be brought for contracts that have expired or terminated.
The contract must be excessively burdensome: The rental price must have risen far above a reasonable level.
An unexpected extraordinary situation must have occurred: Inflation, economic crisis, pandemic, war, natural disasters, etc. make it extremely difficult to pay rent.
The tenant must be in good faith: It must be proven that the tenant did not sue in bad faith to avoid paying rent.
The Process of Filing a Rent Adjustment Lawsuit
The process of filing a rent adjustment case consists of the following steps:
First, a notice is sent: The tenant or landlord must send a notice demanding a reformation of the contract.
If the parties cannot agree, a lawsuit is filed: If the parties cannot agree despite the notice, a rent adjustment lawsuit is filed with the court.
Evidence is presented to the court: Economic data, appraisal reports and other evidence showing why the rent should be adjusted are submitted to the court.
An expert examination is conducted: The court may request an expert report and evaluate the economic evidence presented by the parties.
The court decides: The judge may decide to increase or decrease the rent, taking into account economic conditions.
Documents Required for Rent Adjustment Case
The following documents are required when filing a rent adjustment case:
- Lease agreement (witness statements can also be used if it is not in writing).
- Title deed or evidence of a lease.
- Reports showing changes in economic conditions (inflation data, exchange rate changes, etc.).
- Correspondence or notices between the parties.
- Expert reports (if necessary).
The completeness of these documents will contribute to the speeding up of the case.
How Long Does a Rent Adjustment Case Take?
A rent adjustment case can usually take between 6 months and 2 years. The process may vary depending on the following factors:
- Court workload.
- Duration of the evaluation of the evidence submitted by the parties.
- Preparation time of expert reports.
- The parties’ appeal processes.
In some cases, courts may grant temporary rent adjustment injunctions.
Consequences of Rent Adjustment Case
As a result of the rent adjustment case, the court may make one of the following decisions:
- Reduction of the rent: If it has become impossible for the tenant to pay the rent according to economic conditions, the court may decide to reduce the rent.
- Increasing the rent: If the landlord is justified, the court may order an increase in the rent.
- Continuation of the contract as is: If the court finds the arguments of either party insufficient, it may order the lease to continue on the same terms.
A rent adjustment lawsuit is a lawsuit filed when the lease agreement becomes unsustainable for the parties due to extreme changes in economic conditions. Both tenants and landlords can file this lawsuit to redetermine the rental price depending on the change in economic conditions.
In order for the litigation process to proceed in a healthy manner, first of all, reconciliation should be sought between the parties, and if an agreement cannot be reached, legal remedies should be resorted to. Getting support from a lawyer in this process will ensure that the process proceeds faster and in accordance with the law.
