Landlords Seek Legal Solutions: Can Tenants Be Forced to Pay Rent Differences Retroactively?

Due to a 25% rent increase cap in previous periods, some landlords received rental payments significantly below market rates. As a result, many landlords have begun seeking legal solutions. So, can tenants be required to pay rent differences retroactively? Here are the details…

Disputes between landlords and tenants continue to be a hot topic. With the 25% rent increase cap in place, a gap has grown between the rents paid by long-term tenants and the current market rates.

Can landlords request retroactive rent adjustments after the 5th year? 

Dr. Umut Metin, a spokesperson for the Turkish Mediators and Mediation Centers (TURAMEP), and real estate expert Mustafa Hakan Özelmacıklı shared their insights with milliyet.com.tr.

Özelmacıklı: ‘A Judge May Determine the Rent Even Without a Dispute’ 

Real estate expert Mustafa Hakan Özelmacıklı explained:

“There are certain conditions under the law of obligations for filing a rent determination lawsuit. One of these conditions is that even if there is no dispute over the rent amount, the court is legally permitted to determine the rent for contracts longer than 5 years.

How Is the New Rent Determined? 

For the sixth year, the rent increase rate can be directly subject to a lawsuit without the parties needing to agree on it. The judge will then consider comparable rents, expert opinions, and sample contracts provided by the parties. However, it is important to note that listings on the internet alone are not considered valid comparables.

It’s crucial not to misunderstand this point: a lawsuit must be filed at least one month before the relevant year in the rental contract ends. The relevant notices must be issued within the stipulated time, and after the lawsuit is filed, the rent amount determined by the judge applies for the period between the lawsuit and its conclusion.

‘A Rent Determination Lawsuit Covers Future Rents Only’ 

If the landlord files the lawsuit after the contract renewal period, the new rent determination applies from the new period onwards. It’s important to pay attention to the deadlines. Retroactive rent claims are not typically allowed. A rent determination lawsuit applies to future rents, and to be valid, a notice must be issued before the renewal period and the lawsuit filed accordingly.

Can a Rent Determination Lawsuit Be Filed Before 5 Years, and Is a Rent Adjustment Lawsuit a Solution for Contracts Older Than 5 Years? 

There is a time frame for filing a rent determination lawsuit. The rent increases are typically based on the 12-month average of the Consumer Price Index (CPI) as stipulated in the contract. While rent adjustment lawsuits can be filed for contracts older than 5 years, the process is usually more effectively managed through rent determination lawsuits.”

Mediator Attorney Umut Metin: ‘The Process Could Take Up to 4 Years’ 

Dr. Umut Metin, spokesperson for TURAMEP, made significant statements on the issue:

“Rent determination lawsuits are subject to mandatory mediation. Mediation must be completed within a maximum of 4 weeks. If an agreement is reached during mediation, a lawsuit is not necessary, and the rent is mutually agreed upon by the parties. However, if the parties cannot agree during mediation, a potential rent determination lawsuit could take 2 years in local courts and another 2 years in higher courts, possibly lasting up to 4 years.

Note This Time Frame: ‘Landlords Can Demand Rent Differences from Tenants’ 

When a rent determination lawsuit concludes, the tenant may be required to pay all rent differences from the time the lawsuit was filed to the time it was resolved, based on the new rent amount determined by the court.

For example, in a rent determination lawsuit filed in August 2020 and concluded in August 2024, the tenant may be required to pay the rent differences accumulated from 2020 to 2024 based on the court-determined rent. The determined rent is for the year 2020, and therefore, the rents for 2021, 2022, and 2023 are calculated based on the 2020 base rent. This way, the difference in rent during the lawsuit period is reconciled with the newly determined rent.

 ‘No Interest on Rent Differences’ 

Since the new rent is determined by the court, the tenant is not required to pay interest on the retroactive rent differences. However, if the tenant delays payment after August 2024, interest may accrue from that point onwards. In other words, retroactive rent differences are not subject to interest.

Considering the long duration of lawsuits and the fact that rent differences are not subject to interest, I believe mediation is the most appropriate dispute resolution method for society when determining new rent amounts.”

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