The relationship between landlords and tenants in Turkey is governed by a detailed legal framework that balances two competing interests: the right of property owners to receive a fair market return on their investment and the right of tenants to be protected against arbitrary or disproportionate rent increases. When the parties to a lease agreement cannot reach an agreement on rent or when the existing rent has become disconnected from market conditions over time, Turkish law provides two distinct judicial mechanisms to resolve the dispute. These are the rent determination lawsuit, known as kira tespit davası, and the rent adaptation lawsuit, known as kira uyarlama davası. Both proceedings are governed by the Turkish Code of Obligations No. 6098 and are subject to specific procedural requirements that must be observed before and during litigation.
Understanding these mechanisms is particularly important in a period of significant economic volatility, when the gap between contract rents and prevailing market rates can widen rapidly. Both landlords and tenants may find themselves in situations where the existing rent no longer reflects the economic reality, and the law provides a structured process for addressing this disparity through judicial intervention.
The Legal Framework for Rent Increases Under the Turkish Code of Obligations
The primary provision governing rent adjustments in Turkish law is Article 344 of the Turkish Code of Obligations, which applies to residential leases and leases of roofed workplaces. Under this article, the parties to a lease may agree on the amount by which the rent will increase upon renewal of the lease for the following year. However, any agreed increase is capped at the twelve-month average change in the Consumer Price Index, known as TÜFE, for the preceding year. Any contractual provision that stipulates a higher rate of increase is void to the extent that it exceeds this cap.
Article 344 of the Turkish Code of Obligations: Agreements between the parties regarding the rent to be applied in renewed lease periods are valid only to the extent that they do not exceed the rate of change in the consumer price index based on twelve-month averages for the preceding lease year. This rule also applies to leases lasting longer than one year. If no agreement has been reached on the rent for the renewed period, the judge shall determine the rent by considering the twelve-month average consumer price index rate, provided that the rent does not exceed the prevailing market rate.
For the first five years of a lease, the court is bound by this CPI ceiling when determining rent in the absence of an agreement. However, once the lease relationship has continued for more than five years — including through successive automatic renewals — the court is no longer strictly bound by the TÜFE cap. Instead, Article 344, paragraph 3 allows the judge to determine a fair rent based on the prevailing comparable rents in the market and the overall equitable balance between the parties. This provision represents a structural mechanism designed to prevent rents from becoming permanently depressed relative to market levels over long-term lease relationships.
It is worth noting that between June 2022 and July 2024, the Turkish legislature introduced a temporary cap of 25 percent on annual rent increases for residential leases, imposed in response to the extraordinary inflationary conditions of that period. This temporary measure has since expired, and rent increases for residential properties are once again governed exclusively by the twelve-month average TÜFE rate.
When and How the Rent Determination Lawsuit May Be Filed
A rent determination lawsuit may be filed either by the landlord or by the tenant. For leases in which the parties have agreed on an annual increase rate, the action seeking determination under the five-year provision may only be brought after the completion of five full lease years calculated from the inception of the original lease agreement. It is important to note that automatic annual renewals of the same lease do not reset this five-year period. A landlord who argues that each annual renewal constitutes a new lease would be acting contrary to both the statutory framework and settled Court of Cassation precedent.
Procedural timing is critical in rent determination cases. Where the landlord wishes the new rent to take effect from the beginning of the next lease period, a written notice must be sent to the tenant at least thirty days before the end of the current lease period. Alternatively, a lawsuit filed within the same thirty-day window will have the same effect as prior notice. If neither a timely notice nor a timely lawsuit is served, the new rent determined by the court will take effect only from the beginning of the following lease period, resulting in a delay of one full year in the practical application of the judgment.
Article 345 of the Turkish Code of Obligations: A lawsuit for the determination of the rent to be applied in the new lease period may be filed at the latest within thirty days before the end of the current lease period. If this period is not observed, the new rent shall take effect from the beginning of the next lease period.
The competent court for rent determination lawsuits in Turkey is the Civil Court of Peace, known as the Sulh Hukuk Mahkemesi. The territorially competent court is the one located in the district where the leased property is situated. This rule applies regardless of where the parties reside or where the lease agreement was signed.
Since September 1, 2023, mandatory mediation has been introduced as a prerequisite for filing certain lease-related lawsuits, including rent determination and rent adaptation proceedings. Under the amendment introduced by Law No. 7445, a party seeking to initiate a rent determination or adaptation lawsuit must first apply to a mediator. If the mediation process does not result in an agreement, the mediator issues a final record, and only upon presentation of this record to the court may the lawsuit proceed. A case filed without completing this mandatory mediation step will be dismissed on procedural grounds.
The Role of the Expert Witness in Rent Determination Cases
Once the lawsuit is filed and the mediation precondition has been satisfied, the court initiates an evidentiary phase in which a court-appointed expert witness plays a central role. The expert, typically a licensed real estate appraiser or a specialist in property valuation, is tasked with assessing the comparable rental market in the area where the property is located. This assessment involves examining actual lease agreements for properties of similar type, size, location, and condition, as well as analyzing the prevailing market conditions at the time of the hearing.
The Court of Cassation has consistently emphasized that the expert’s report must reflect a genuine market analysis and not simply apply an automatic formula based on the CPI rate. In cases falling under the five-year rule, the court retains broad discretion to depart from the TÜFE ceiling and set a rent that is fair to both parties in light of actual market conditions. The expert’s findings are not binding on the court, but in practice they carry significant weight, and parties who wish to challenge the expert’s conclusions may request a supplementary report or submit an independent valuation.
The court’s determination covers only one lease year at a time. A plaintiff who seeks a determination for the year 2025 cannot obtain a ruling that also establishes the rent for 2026 or for any prior period. This limitation ensures that rent determinations remain current and reflect the conditions prevailing at the time of each proceeding.
The Rent Adaptation Lawsuit Under Article 138
Separate from the rent determination mechanism, Turkish law also provides a remedy for situations where extraordinary and unforeseeable changes in economic conditions have so fundamentally disrupted the balance of a lease agreement that continuing to perform under its original terms would be unjust. This remedy is the rent adaptation lawsuit, grounded in Article 138 of the Turkish Code of Obligations, which codifies the doctrine of excessive burden of performance.
Article 138 of the Turkish Code of Obligations: If an extraordinary circumstance that was not foreseen and not expected to be foreseen by the parties at the time the contract was concluded arises after the conclusion of the contract, and if this circumstance changes the existing facts to such an extent that requiring the performance of the contract would be contrary to the rule of good faith, and if the debtor has not yet performed the obligation or has performed it under reservation, the debtor may request the court to adapt the contract to the new circumstances or, if this is not possible, to withdraw from the contract.
The adaptation lawsuit differs from the determination lawsuit in several important respects. First, it is not subject to the five-year precondition. It may be filed at any point during the lease relationship, provided that the qualifying conditions are met. Second, the qualifying threshold is considerably higher. A mere rise in inflation or general economic deterioration is not sufficient to trigger this remedy under established Court of Cassation case law. The change in circumstances must be extraordinary, unforeseeable at the time the contract was formed, and not attributable to the party seeking adaptation. Examples recognized in practice include sudden and dramatic shifts in the surrounding urban environment, such as the construction of a major transportation hub near the property, or catastrophic events that fundamentally alter the value or usability of the premises.
The adaptation lawsuit also differs in its temporal effect. Unlike a determination judgment, which applies from the beginning of the relevant lease period when procedural requirements are met, an adaptation judgment applies from the date the lawsuit was filed. Retroactive adjustment of past rents is not available under this mechanism.
Judgments, Appeals, and Practical Considerations
Once the court issues a rent determination judgment, the newly determined rent replaces the previously applicable rent for the relevant period. If the tenant has been paying a lower amount during the pendency of the lawsuit, the landlord becomes entitled to collect the difference between the determined rent and the amount actually paid, together with statutory interest from the date of each missed payment. The tenant who continues to pay the old amount without reservation assumes the risk of accumulating a debt that may later become the basis for an eviction proceeding.
Both parties have the right to appeal a rent determination judgment to the regional court of appeal and, under certain conditions, further to the Court of Cassation. The Court of Cassation has developed a substantial body of case law on rent determination disputes over the years, and its rulings on issues such as the methodology for selecting comparable properties, the proper application of the equity standard in five-year cases, and the procedural consequences of late notice have become important points of reference for both courts and practitioners.
In practical terms, the duration of a rent determination lawsuit can vary considerably depending on the workload of the competent Sulh Hukuk Mahkemesi and the complexity of the evidentiary phase, particularly where the expert’s initial report is contested. In major cities such as Istanbul and Ankara, where lease disputes are numerous and court dockets are congested, proceedings may extend to a year or more from the filing of the lawsuit to the issuance of a final judgment.
Real Estate and Lease Lawyer in Istanbul – Attorney Ozan Soylu
Attorney Ozan Soylu is a practicing lawyer based in Istanbul, advising landlords and tenants in lease disputes, rent determination proceedings, and adaptation lawsuits under Turkish law. His practice covers the full range of residential and commercial lease litigation, from pre-lawsuit mediation and procedural preparation to representation before the Sulh Hukuk Mahkemesi and appellate courts.
For all legal matters concerning Turkish law, you can reach out to Attorney Ozan Soylu. Legal consultancy and representation services are provided with a dedicated approach for foreign nationals. To submit your questions, contact us.
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