Problems Regarding The Rental Price
Despite the expiry of the fixed-term lease agreement in residential and roofed workplace leases, the agreement is deemed to be extended under the same conditions unless the lessee notifies at least 15 days before the expiry of the term in accordance with TCO 347/1. The exception to this is the rental fee. The increase in the rental price during the periods when the lease agreement is extended is an important issue, especially in practice.
Article 56 of the Law dated 17.1.2019 and numbered 7161 With the Article 56 of the Law dated 17.1.2019 and numbered 7161, the phrases “INCREASE IN THE PRODUCER PRICE INDEX (PPI)” in the first and second paragraphs of this article have been changed as “CHANGE IN THE CONSUMER PRICE INDEX (CPI) ACCORDING TO TWELVE MONTH AVERAGES”, The phrase “INCREASE IN THE PRODUCER PRICE INDEX” in the third paragraph has been changed as “CHANGE IN THE CONSUMER PRICE INDEX ACCORDING TO THE TWELVE MONTH AVERAGES”. The reason for this change is that the PPI rate is higher than the CPI rate, essentially for the protection of the tenant.
IN LEASE AGREEMENTS CONCLUDED IN TURKISH CURRENCY, THE EXISTENCE OF A PROVISION REGARDING THE INCREASE IN THE CONTRACT -TBK 344/I
The agreements of the parties regarding the rental price to be applied in the renewed lease periods are valid, provided that they do not exceed the rate of change in the consumer price index according to the twelve-month averages in the previous lease year. This rule shall also apply to lease agreements with a term longer than one year.”
The parties are not completely free in determining the rental price here. The legislator has imposed an upper limit on the parties’ agreements regarding the increase and this upper limit is the CPI. Otherwise, the sanction of modified partial invalidity comes into effect and as a result of this sanction, the increase rate is reduced to the CPI rate and becomes valid at this rate. Agreements regarding the increase can be made at the beginning of the contract or afterwards. The lessee who pays a higher price than the increase rate agreed by the parties may claim back the overpaid price based on the unjust enrichment provisions.
A major problem in practice arises when the lessee pays a lower rent than the agreed increase amount and the lessor accepts it without any reservation. This issue is controversial in the doctrine. When the decisions of the Court of Cassation are examined, it is seen that the lessor cannot file a lawsuit and claim back the remaining part upon acceptance without a reservation. In another decision of the Court of Cassation, if there is an adjustment clause in the contract, the lessor’s acceptance of the payment without a reservation is not sufficient for the existence of an implied agreement, and the Court of Cassation seeks proof of this implied agreement.
ABSENCE OF A CLAUSE ON INCREASE IN LEASE AGREEMENTS -TBK 344/II
If the parties have not made an agreement on this matter, the rent shall be determined by the judge according to equity, taking into account the condition of the leased property, provided that it does not exceed the rate of change in the consumer price index of the previous lease year according to the twelve-month averages
In case of a decrease in the CPI rate, the lessee may request a reduction in the rent.
DETERMINATION OF THE RENT PURSUANT TO TBK 344/III
Regardless of whether or not an agreement has been made by the parties in this regard, for more than five years or
in lease agreements renewed after five years and at the end of every five years thereafter,
The rent to be applied in the new lease year shall be determined by the judge in an equitable manner by taking into consideration the rate of change in the consumer price index according to the twelve-month averages, the condition of the leased property and the comparable rental prices. The rent determined in this manner in the lease year after every five years may be changed according to the principles in the previous paragraphs.
CRITERIA TO BE TAKEN AS BASIS
Twelve-month rate of change in CPI
Condition of the leased property: These are the qualities of the leased property. The age and size of the leased property, the quality of the materials used and other facilities offered in connection with the immovable property can be given as examples of the condition of the leased property
Precedent rent price : It is expressed as “the value reached by the rental money in lease agreements concluded in a certain neighbourhood for regular and continuous periods”. “In determining the precedent rental price, a comparison should be made based on the characteristics of the leased property and the lease agreements that can be accepted as the same quality in the vicinity of the leased property and concluded close to the period requested to be determined.”
Equity: This issue, which is expressed as “former tenant discount” in the decisions of the Court of Cassation, appears as a discount between 5-20% according to equity over the rental price determined in an amount equal to or very close to the rental price at which the leased premises can be rented as empty.
Both parties may request the determination of the price according to the market price, regardless of whether the increase rate is determined in the lease agreement.
IN LEASE AGREEMENTS CONCLUDED IN FOREIGN CURRENCY – TBK 344/IV
If the rental price is agreed in foreign currency in the contract, the rental price cannot be changed until five years have passed, without prejudice to the provisions of the Law on the Protection of the Value of Turkish Currency dated 20/2/1930 and numbered 1567. However, the provision of Article 138 of this Law titled “Excessive difficulty of performance” is reserved. In determining the rental price after five years, the provision of the third paragraph shall be applied by taking into consideration the changes in the value of the foreign currency.
TIME LIMIT FOR FILING A LAWSUIT – TBK 345
The lawsuit regarding the determination of the rent may be filed at any time. However, if this lawsuit is filed at the latest thirty days before the beginning of the new lease period, or if it is filed until the end of the following new lease period, provided that the lessor has notified the lessee in writing that the rent will be increased within this period, the rent to be determined by the court shall bind the lessee as of the beginning of this new lease period. If there is a provision in the contract that the rent will be increased in the new lease period, the rent to be determined by the court in the lawsuit to be filed until the end of the new lease period shall also be valid as of the beginning of this new period.
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