Expert Reports in Rent Determination And Adaptation Lawsuits in İzmir

The two lawsuits are often confused; however, their legal bases and conditions differ.

Rent Determination Lawsuit (Turkish Code of Obligations, Art. 344)

A rent determination lawsuit aims to have the court determine what the rent amount shall be for renewed lease periods. Pursuant to Article 344 of the Turkish Code of Obligations:

• Where the parties have agreed on an increase, the increase may not exceed the twelve-month average of the Consumer Price Index (CPI) for the preceding lease year.
• Where the parties have not reached an agreement, the judge determines the rent in accordance with equity, observing the same upper limit.
• In lease agreements exceeding five years or renewed after five years, and at the end of each subsequent five-year period, the judge redetermines the rent in an equitable manner by taking into account the CPI increase rate, the condition of the leased property, and comparable rent amounts.

The point at which the comparable rent amount—and therefore the expert report—gains its primary significance is this post-five-year assessment.

Rent Adaptation Lawsuit (Turkish Code of Obligations, Art. 138)

An adaptation lawsuit aims to update the rent amount to current conditions when an extraordinary and unforeseeable circumstance arising after the formation of the contract (such as unexpected economic fluctuations) excessively disrupts the balance of performances between the parties. It typically arises in long-term leases and situations where market conditions have changed dramatically. Here too, the court relies on an expert examination to determine the current market value.

In both determination and adaptation lawsuits, the judge cannot independently and technically determine the current value of the leased property or the prevailing rental level in the area. For this reason, an on-site inspection is conducted, and experts—typically from the field of real estate valuation—are appointed. The expert report constitutes the primary technical evidence upon which the court bases its rent determination; therefore, the methodology and comparable selection directly affect the outcome.

The expert takes the rental amounts of properties of similar characteristics in the surrounding area as comparables and conducts a comparative analysis. The following criteria are generally considered in the assessment:

• Location: Street, proximity to the centre and transportation, commercial density of the area
• Area (m²) and interior features: Net usable area, number of rooms, condition of use
• Building characteristics: Age, floor, façade, elevator, parking, heating system
• Type of use: Residential or commercial (roofed workplace)
• Currency of comparables: Recent and genuinely comparable lease agreements

By comparing these factors, the expert calculates the market rent amount. The degree of similarity between the comparables and the subject property is the most important factor in determining the robustness of the report.

Konak and Alsancak are among İzmir's most central and high-demand areas. Proximity to the coastline, dense commercial fabric, and ease of transportation cause comparable rent amounts in these areas to trend above the city average. For this reason, when conducting a comparable search for a property in Konak-Alsancak, selecting similar properties on the same street or in very close proximity is of great importance; a comparable even a few streets away can significantly alter the value.

An important point: Specific comparable increase rates or numerical rent amounts are determined individually in each file through on-site inspection and current expert examination. Although the area is generally in high demand, the applicable rate for a single property varies depending on the building's age, floor, façade, and the currency of the comparables. Therefore, general rates such as "the area increased by X%" do not yield binding results for a specific case; what is determinative is the property-specific comparable analysis.

Particularly in long-standing tenancy relationships, an abrupt increase of the rent to the current market rate may produce severe consequences for the tenant. In the practice of the Court of Cassation, for long-term tenants, an equity-based reduction may be applied during the transition to market rent in observance of the principle of good faith and equity. In other words, the market rent determined by the expert often constitutes the ceiling of the determined rent; the judge may set a rent below this amount depending on the specific circumstances of the file.

In these lawsuits arising from tenancy relationships, the court with jurisdiction is the Civil Court of Peace, and the competent court is the one located where the property is situated. For a property in Konak or Alsancak, this is the İzmir Civil Courts of Peace. The general flow of the process is as follows:

1. Filing of the lawsuit petition and the opposing party's response
2. On-site inspection and appointment of an expert
3. Preparation of the expert report
4. Objection to the report and, if necessary, a supplementary report or new expert examination
5. The court's decision determining the rent amount

It should also be taken into account that the İzmir Courthouse serves in Bayraklı and that the İzmir Civil Courts of Peace carry a heavy caseload in rent disputes; the inspection and expert stages are the primary factors that determine the duration of the process.

The expert report is not a final and conclusive determination; the parties may object to the report. Selection of incorrect or non-comparable comparables, incomplete assessment of the property's characteristics, or reliance on outdated data are common grounds for objection. Upon objection, the court may order a supplementary report or appoint a new panel of experts. For this reason, careful technical review of the report is one of the most critical stages of the process.

Is a rent determination lawsuit the same as an adaptation lawsuit? No. A determination lawsuit (Turkish Code of Obligations, Art. 344) concerns the determination of the rent for a renewed period, whereas an adaptation lawsuit (Art. 138) concerns the updating of the contract due to unforeseeable circumstances.

How does the expert determine the comparable rent? The expert calculates the market rent by comparing the rental amounts of similar properties in the surrounding area using criteria such as location, area, and the age and characteristics of the building.

Is there a fixed comparable increase rate for Konak-Alsancak? No. Although the area is in high demand, the applicable rate is determined individually for each property through on-site inspection and current expert examination; general rates are not binding for a specific file.

Can the rent be abruptly increased to market rate? Particularly for long-term tenants, the judge may set a rent below the market amount in observance of the principle of good faith and equity.

Which court hears these lawsuits? Rent determination and adaptation lawsuits arising from tenancy relationships are heard before the Civil Court of Peace; the İzmir Civil Courts of Peace are competent for properties in Konak-Alsancak.

Can the expert report be objected to? Yes. It may be objected to on grounds such as inappropriate comparable selection or incomplete assessment; the court may order a supplementary report or a new examination.

The outcome of rent determination and adaptation lawsuits depends largely on the methodology and comparable selection of the expert report. Although comparable rent amounts trend high in central areas such as Konak-Alsancak, the applicable value emerges from a separate assessment for each property. In the sound conduct of the process, careful technical review of the comparable research and the expert report is determinative.

For legal support regarding rent determination, adaptation, and comparable assessment processes, you may contact Yücesoy Attorney Partnership & Law Office.

Av. Mehmet Yücesoy

İzmir Attorney & Legal Consultancy