1. Legal Basis and Nature of the Lease Adaptation Lawsuit

What is a Lease Adaptation Lawsuit? Conditions, Process, and Application According to the Supreme Court. A lease adaptation lawsuit constitutes an exceptional application of the principle of “pacta sunt servanda” (Ahde Vefa – Pacta Sunt Servanda), which dominates contract law. As a rule, a contract must be applied exactly according to the conditions at the time it was made. However, if, due to extraordinary and objective events that emerge during the performance of the contract after its establishment, which could not be foreseen by the parties and were not expected to be foreseen, the balance between the performances is disrupted to an unbearable degree against one party, strictly adhering to this principle may create a situation contrary to the rules of justice and fairness (Supreme Court 6th Civil Chamber – 2015/6627; Supreme Court 3rd Civil Chamber – 2017/5251).

At this point, the principle of “collapse of the basis of the transaction” or “Clausula Rebus Sic Stantibus” (unforeseen circumstances clause) comes into play. According to court decisions, in cases where the conditions forming the basis of the contract substantially change subsequently, the judge’s intervention in the contract becomes relevant. The legal basis for this intervention is the provision of “Excessive Difficulty in Performance” regulated in Article 138 of the Turkish Code of Obligations (TBK) No. 6098, and in the earlier period, Articles 1, 2 (rule of good faith), and 4 of the Turkish Civil Code (TMK) (Yargıtay HGK – 2003/13-332; Yargıtay 13. HD – 2012/2412). Adaptation is accepted as an exceptional, subsidiary (secondary), and auxiliary solution for the contract and finds application especially in long-term debt relationships (Yargıtay 6. HD – 2015/11014).

2. Conditions for a Rent Adaptation Lawsuit

Court of Appeals decisions and Article 138 of the TBK emphasize that a series of conditions must be met for a rent adaptation lawsuit to be filed. These conditions are as follows:

Emergence of an Extraordinary and Unforeseeable Situation: 

An extraordinary situation, unforeseeable and not expected by the parties at the time the contract was made, must have arisen. In court decisions, situations such as war, serious economic crises shaking the country, extreme increases in inflation rates, shock devaluation, and a significant decrease in the purchasing power of money are given as examples (Supreme Court 3rd Civil Chamber – 2017/7432; Supreme Court 6th Civil Chamber – 2015/6627). Even if the events were foreseeable, the inability to foresee the extent and form of their effects on the contract to such a degree may also be considered sufficient for this condition to be met (Supreme Court 13th Civil Chamber – 2012/2412).

The Changed Situation Must Not Originate from the Debtor: The extraordinary situation that has arisen must not have originated from the party requesting the adaptation (the debtor) (Supreme Court 3rd Civil Chamber – 2017/7304).

Excessive Impairment of the Balance Between Performances: This situation must have altered the facts existing at the time the contract was made, to the detriment of the debtor, to such an extent that demanding performance from them would be contrary to the rules of good faith. The balance between performances must have been excessively and clearly impaired (Supreme Court 3rd Civil Chamber – 2017/12987; Supreme Court 13th Civil Chamber – 2010/17858).

The Debt Must Not Yet Have Been Performed or Must Have Been Performed Under Reservation: The debtor must either not yet have performed their debt or must have performed it while reserving their rights arising from the excessive difficulty of performance (under reservation) (Supreme Court 3rd Civil Chamber – 2017/7304; Supreme Court 6th Civil Chamber – 2014/3305). Adaptation cannot be requested for rent payments made retrospectively (Supreme Court 3rd Civil Chamber – 2024/1623).

Absence of an Adaptation Clause in the Contract or Law: There should be no adjustment clause or provision in the contract or law concerning changed circumstances. However, adaptation may also be requested in situations where the application of a provision in the contract could constitute an abuse of right according to Article 2/2 of the Turkish Civil Code (TMK) (Supreme Court 3rd Civil Chamber – 2017/5992).

3. Procedures and Principles

The procedures and principles that courts must follow in rent adaptation lawsuits have been detailed in Supreme Court decisions:

Expert Examination: The court must obtain a justifiable and auditable report from a three-person expert committee specialized in the relevant fields to determine whether the adaptation conditions have been met (Supreme Court 3rd Civil Chamber – 2017/7304; Supreme Court 3rd Civil Chamber – 2017/5992).

Content of the Expert Report: In the expert report, different from the methods used in lawsuits for determining rent, the following matters should be investigated and evaluated within the framework of principles specific to adaptation lawsuits:

The nature, usable area, and location of the leased property.

Above-normal zoning and commercial developments in the region that would affect rent.

Comparable rental values (however, these are considered only as auxiliary sources).

Increases in tax and depreciation expenses.

Sudden and excessive fluctuations in exchange rates.

The existence of events requiring the renegotiation of payment terms due to severe economic crises or natural disasters affecting the country (Supreme Court 3rd Civil Chamber – 2017/12987; Supreme Court 3rd Civil Chamber – 2018/5741).

The Judge’s Role and Decision: The judge first examines the specific adaptation provisions in the contract. If no such provision exists, the judge assesses whether the basis of the transaction has collapsed in light of the expert report and other evidence. If the judge concludes that adaptation is necessary, relying on their authority under Article 1 of the Turkish Civil Code (TMK), they determine the new rent by filling the gap in the contract within the framework of equity, fairness, truth, and honesty rules (TMK Art. 2/1, 4) (Court of Cassation 13th Civil Chamber – 2012/2412; Court of Cassation 6th Civil Chamber – 2015/859). The judge must not disregard the parties’ hypothetical intentions and convergent goals when entering into the contract, and should not transform the contract into an entirely new one (Court of Cassation 3rd Civil Chamber – 2017/11362).

Effective Date: The adapted new rent becomes effective from the date of the lawsuit (Court of Cassation 13th Civil Chamber – 2010/11127).

Reasoned Decision: The court’s decision must be reasoned, stating the acceptance and rejection aspects of the collected evidence and their bases, and must be suitable for review by the Court of Cassation (Court of Cassation 6th Civil Chamber – 2015/6627).

4. Special Circumstances and Considerations

Assessment for Merchants: Plaintiff merchants have an obligation to act “like a prudent businessperson” in accordance with Article 20/1 of the Turkish Commercial Code (TTK). Therefore, situations such as the unstable economic conditions experienced in Turkey for years may be considered foreseeable for merchants, and in such a case, the condition of “unforeseeability” for adaptation might not be met (Court of Cassation General Assembly of Civil Chambers – 2003/13-332).

Relationship with Article 344 of the TCO: In residential and roofed workplace leases, Article 344 of the Turkish Code of Obligations (TCO) allows for the rent to be determined by the judge based on equity in contracts longer than five years. This provision offers a kind of legal adaptation possibility. For this reason, there is a first instance court decision stating that an adaptation lawsuit filed solely on the grounds that the rent remains below market rates before the five-year period expires may be rejected on the grounds that it would circumvent Article 344 of the TCO (First Instance – Istanbul Anatolian 5th Civil Court of Peace – 2024/128).

Lis Pendens and its Effect: A pending (ongoing) adaptation lawsuit directly affects lawsuits aimed at collecting rent arrears. In this case, the court hearing the collection lawsuit may need to await the outcome of the adaptation lawsuit (Supreme Court 3rd Civil Chamber – 2018/7526). However, before the adaptation lawsuit is finalized, the tenant cannot unilaterally underpay or reduce the rent amount specified in the contract (Supreme Court 3rd Civil Chamber – 2024/1623). A paper suggestion.

Why is Expert Lawyer Support Necessary in Rent Adaptation Lawsuits?

Although rent adaptation lawsuits appear to be solely about changing the rent amount, they are extremely complex and technical lawsuits due to Article 138 of the TCO, Articles 1, 2, and 4 of the Turkish Civil Code (TCC), established Supreme Court precedents, and technical expert evaluations. Procedural or strategic errors made in these cases can lead to the rejection of even legitimate claims.

Specifically

Failure to substantiate the unpredictability of the extraordinary circumstance,

The failure to correctly prove that the balance between performances has been unbearably disrupted,

The failure to make timely and technical objections to the expert report,

The incorrect determination of the lawsuit date and the date the adaptation will be applied,

The incorrect structuring of the relationship between Article 344 and Article 138 of the Turkish Code of Obligations,

Such issues can lead to the lawsuit being lost on its merits.

Therefore, it is of great importance that rent adaptation lawsuits are handled by an expert lawyer who is well-versed in lease law and Supreme Court practices, and who can correctly interpret economic data and precedent decisions.

Legal Support in Rent Adaptation Lawsuits in Tuzla – Istanbul

As 2M Hukuk Law Firm (Tuzla / Istanbul);
we provide our clients with effective legal consultancy and litigation services in disputes concerning residential and roofed workplace leases, particularly in rent adaptation lawsuits, in light of current Supreme Court precedents and implementation principles. If you believe your lease agreement produces unfair results under current economic conditions, it is highly recommended to seek professional legal support before incurring a loss of rights.