Rent Adjustment and Rent Determination: What Is the Difference?

A landlord believes the rent has fallen far below the rents of comparable properties. A tenant says the rent has become difficult to pay after the contractual increase. Either party may ask a court to intervene, but determination of the rent and adjustment of the contract are not the same claim. Is the question simply what rent should be paid in the next rental year? Or has an extraordinary event after the contract was made so disrupted the original balance of obligations that insisting on performance as agreed would conflict with good faith? The answer determines which legal route needs to be examined.

Rent determination: Setting the rent for a new rental period

For residential and roofed workplace leases, the principal rules on rent in renewed periods are found in Articles 344–345 of the Turkish Code of Obligations (TCO). If the parties have agreed an increase, it is subject to the statutory ceiling based on the change in the twelve-month average of the consumer price index. That ceiling is not a mandatory increase automatically applied to every contract: a valid agreement on a lower increase matters in the earlier periods. If there is no agreement on an increase, the court may determine the rent within the statutory limit, also taking the condition of the leased property into account.

A different assessment applies to leases longer than five years, leases renewed after five years, and at the end of each subsequent five-year period. The court determines the rent for the new rental year by considering the index change, the property's condition, comparable rents and equity together. At this stage, considering comparable rents is not the same as mechanically applying the index ceiling applicable in earlier years. Nor does it mean simply adopting the highest advertised asking rent. For procedure and further details, see our Turkish-language article on rent determination.

Hypothetical example: An apartment was leased in 2021, and in the following years rent was paid according to the lease and the increase limits applicable at the time. When new leases in the neighbourhood become much more expensive, the landlord cannot obtain a comparable market rent in the third rental year merely by invoking TCO Article 138 and pointing to that difference. The statutory sequence for the earlier years and for the stage after five years must be examined. A rent-determination claim that also considers comparables may become relevant in a later period if its conditions are met. The dates in this example illustrate when the two routes diverge; they do not predict the outcome of a case.

The time at which a rent-determination action may be filed is a different question from the start of the rental period from which the determined rent binds the tenant. TCO Article 345 allows the action to be brought at any time. As a rule, however, for the decision to take effect from the start of the new period, the action must be filed at least thirty days before that period, or written notice of an intended increase must be given to the tenant within that time and the action filed by the end of the ensuing new rental period. If the contract contains an increase provision for the new period, the rent determined in an action filed by the end of that period takes effect from its beginning. Without examining the contract date, increase clause and contents of any notice, one cannot say that filing an action automatically raises the rent retrospectively.

Adjustment: When the circumstances underlying the contract change extraordinarily

TCO Article 138 addresses a different problem from the calculation of an ordinary rent increase. An extraordinary circumstance that the parties did not foresee, and could not reasonably have been expected to foresee when making the contract, must arise for a reason not attributable to the obligor. It must alter the circumstances against the obligor to such an extent that demanding performance would be contrary to good faith. The obligation must not yet have been performed; if it has been performed, the rights arising from the excessive difficulty of performance must have been reserved. If these conditions are met together, adjustment to the new circumstances is sought first. If adjustment is impossible, termination is generally the relevant alternative for a continuing contract. Foreign-currency obligations are not excluded from this provision.

Here, the court does not ask only, “What do nearby apartments rent for?” It examines the circumstances in which the agreement was made, the subsequent event, how that event affects which party's obligations, whether the risk was foreseeable, and how payments have been made. Naming an extraordinary event is not proof that the statutory conditions are met. A disaster or an unforeseeable serious restriction on use may raise an adjustment issue if it severely affects the agreed use of the property and the contractual balance in the particular case. Mentioning the same event does not produce the same result for every property or rental period. Whether a separate special rule, such as the rules on defects in the leased property, applies must also be considered distinctly.

Hypothetical example: Under a long-term roofed workplace lease, an unforeseeable and serious event after the contract was made substantially affects the area in which the premises are located and their agreed use. If the tenant sets out how the event affected the workplace, why the contractual balance became intolerably disrupted, and the position regarding performance—instead of merely listing rents for nearby shops—the tenant raises a distinct claim requiring examination under TCO Article 138. This example does not mean that the claim will necessarily succeed.

How do the Court of Cassation's recent decisions draw the line?

Some older decisions speak broadly about adjusting long-term leases in response to changed economic conditions. But taking that wording alone to mean “inflation has risen, therefore adjustment is available” would be misleading today. In its decision dated 10 March 2025, Third Civil Chamber, E.2024/1083, K.2025/1439, the Turkish Court of Cassation addressed precisely this question while resolving a conflict between final decisions of regional appellate courts. A landlord sought a higher residential rent before five years had elapsed, relying on inflation and the gap between the contractual and comparable rents. The Chamber held that rent inflation, purchasing power and comparable rents belong to the rent-determination framework under TCO Article 344; the same factors alone cannot be repackaged as a ground for adjustment under Article 138. It nevertheless left the adjustment route open where other grounds and conditions under Article 138 are present. The decision does not say that rent adjustment has been abolished. It says that the grounds for the two claims must not be confused.

The Court of Cassation expressed that qualification in its own reasoning:

“Dolayısıyla konut ve çatılı iş yeri kira sözleşmelerinde kira belirleme davası sebebi olarak kabul edilmeyen ancak TBK 'nun 138. Maddesi şartlarını taşıyan sebeplerin gerçekleşmesi halinde ise uyarlama davasının açılması mümkündür.”

English rendering (not the court's original words): An adjustment action remains possible if grounds arise which are not grounds for a rent-determination action in residential and roofed workplace leases but satisfy the conditions of TCO Article 138. The point is that an extraordinary ground distinct from a mere gap in comparable rents may still be examined.

A second question follows. If the parties agreed a fixed annual increase below the statutory ceiling, is that increase clause beyond adjustment altogether? The Third Civil Chamber's conflict-resolution decision dated 30 March 2026, E.2026/1213, K.2026/1751 draws an important distinction: grounds for rent determination under TCO Article 344 cannot serve as grounds for an Article 138 adjustment claim; but if other grounds and all the conditions of Article 138 are met, the contractual rent-increase rate itself may be the subject of an adjustment claim. This does not mean that a low contractual rate is invariably raised to the CPI rate. The decision neither categorically bars intervention in an increase clause nor permits a party to bypass the statutory rent system solely because an economic index has changed.

The Chamber's reasoning expressly refers to the increase clause:

“Sürekli edimli sözleşmelerden olan kira sözleşmelerinde; uyarlama talebi, süre ve kira bedeli için gündeme gelmekle birlikte, kira sözleşmesinde yenilenen kira dönemlerinde uygulanacak kira artış oranı yönünden de uyarlama talebinde bulunulabilir.”

English rendering (not the court's original words): In a lease, which is a contract of continuing performance, adjustment may concern not only its term and rent but also the rate of rent increase applicable in renewed rental periods. “May be sought” does not mean “will be granted”: the decision also requires the other grounds and conditions of Article 138 to be met.

After these two conflict-resolution decisions, the Third Civil Chamber's decision dated 7 April 2026, E.2025/4944, K.2026/1947 concerned a workplace lease with turnover-linked rent and a minimum payment. The landlord sought adjustment of the rent and subsequent increase clause, citing inflation, exchange rates and comparable rents. The first-instance court dismissed the claim because the conditions had not been met; the regional appellate court also stressed that a gap in comparable rents alone did not establish a case for adjustment. The Court of Cassation upheld the dismissal. That affirmance does not mean that every sentence of the lower court's reasoning became a separately stated principle of the Court of Cassation. It shows that what was alleged and established in the particular case mattered to the outcome.

The difference from rent determination is also apparent in a tenant's claim for a reduction. In the Third Civil Chamber's decision dated 16 April 2025, E.2024/2574, K.2025/2204, a tenant cooperative sought to reduce an increased workplace rent by way of adjustment. The first-instance court effectively decided it as a rent-determination claim under Article 344(3). The regional appellate court distinguished the conditions for adjustment from those for rent determination and dismissed the claim; the Court of Cassation upheld that outcome. A court's power to identify the legal basis of a claim does not allow it to transform the pleaded facts and relief sought into a different action without limit. Because the dispute also arose against a historical transitional regime for commercial workplace tenants, its treatment of that earlier period should not simply be extended to every lease today.

Which claim fits the same factual situation?

If rent has merely fallen behind comparable rents over time, start with the contractual increase clause, the statutory ceiling applicable to the relevant period and the five-year stage for rent determination. If a party relies on a distinct extraordinary event after the contract was made, the party must set out why it was unforeseeable, why it is not attributable to them, how severely it made performance more difficult, whether rights were reserved when performing, and what intervention is sought. The fact that five years have not elapsed does not, by itself, justify seeking through “adjustment” a comparable rent unavailable through rent determination. Nor does the passing of five years automatically rule out Article 138 where a genuine extraordinary event exists.

More important than whether the claim is labelled “determination” or “adjustment” are the event relied on and the precise relief requested from the court. For rent determination, the timing of notice and filing under TCO Article 345 must also be checked in relation to the new period; that timing is not automatically imported into an adjustment claim. The effect of adjustment on the requested starting period and on rent already paid cannot be stated definitively without examining the contract, payment records, any reservation of rights and the particular relief sought.

The choice, then, is not about “which action would produce a higher or lower rent”. It turns on the legal cause of the change. Ordinary increases and differences from comparable rents are addressed through the statutory rent-determination rules. Adjustment is considered where an extraordinary disruption of the balance of obligations, outside those rules, satisfies the conditions and is established in the particular case. Hardship caused by inflation deserves serious attention, but it does not alone create a right to exceed the CPI ceiling through TCO Article 138.