Adaptation and Eviction Suits: Theoretical and Practical Issues

THEORETICAL AND PRACTICAL PROBLEMS IN ADAPTATION AND EVICTION CASES

I. INTRODUCTION

The principle of Pacta Sunt Servanda, one of the cornerstones of Turkish Law of Obligations, expresses that the parties to a contract are obligated to fulfill their undertakings regardless of how difficult conditions become. However, this principle is not absolute. In order to ensure "contractual justice," the legal order brings into play the principle of Clausula Rebus Sic Stantibus (Changed Circumstances) in the presence of unforeseeable extraordinary situations.

In particular, the hyperinflationary process experienced in our country in recent years, volatility in exchange rates, and the housing crisis have transformed lease law into something of a "crisis management" area. This article aims to examine the adaptation of the lease amount in the context of TCO Article 138 and the grounds for eviction in TCO Articles 350 et seq., from a perspective that guides practitioners, in light of doctrinal debates and the Court of Cassation's current case law.

II. ADAPTATION OF THE LEASE AMOUNT (DOCTRINE OF CHANGED CIRCUMSTANCES AND TCO Article 138)

A. Legal Nature and Conditions of Application

TCO Article 138 is an exceptional regulation that legitimizes judicial intervention in a contract. The legitimacy of this intervention is based on the theory of the "Collapse of the Basis of the Transaction." The basis of the transaction is the totality of facts that were present at the time the contract was formed and whose existence the parties stipulated (expressly or implicitly) in entering into the contract. For the collapse of this basis, the following four conditions must cumulatively be fulfilled:

1. The Occurrence of an Extraordinary and Unforeseeable Situation:

The "unforeseeability" here is an objective criterion. Events that a prudent merchant or an average person could not have predicted in the ordinary course of life are meant (war, pandemic, major economic crises, natural disasters). Doctrinal Debate: Is inflation a "structural" problem in developing economies like Turkey, or an "extraordinary" situation? While the Court of Cassation for many years accepted inflation as "foreseeable," it tends to evaluate the sudden and excessive increases in recent times (particularly the CPI rates rising to the 60-80% band) in the "unforeseeable" category.

2. The Situation Not Originating from the Debtor:

The cause of the crisis must not be the fault or negligence of the debtor.

3. Difficulty of Performance (Violation of the Principle of Good Faith):

The insistence on literal performance of the contract must create an imbalance against the debtor (or in favor of the creditor) to the degree of being contrary to the principle of good faith pursuant to TCC Article 2. What is sought here is not merely "reduction of profit" but reaching the threshold of "economic ruin" or a grossly disturbed balance between the performances.

4. Performance Not Having Been Completed or Having Been Made Under Reservation:

If the debtor has performed their obligation unconditionally, they can no longer request adaptation. For this reason, it is of vital importance that lease payments be made with the statement "my right of adaptation being reserved" before or during the adaptation case.

B. Critical Differences Between the Rent Determination Action (TCO Article 344) and the Adaptation Action

The most frequently made error in practice is the confusion of these two actions. Yet there are deep differences between them in terms of both conditions and consequences:

Feature

Rent Determination Action (TCO Article 344)

Adaptation Action (TCO Article 138)

Legal Basis

Periodic renewal of the contract

Collapse of the basis of the transaction (Extraordinary circumstances)

Time Requirement

Cannot be filed before 5 years have passed (for equity)

No time requirement (long duration sufficient)

Extraordinary Circumstances

Not required

Mandatory element

Effect of Decision

May have retroactive effect (from date of action)

As a rule, prospective effect from date of action

Burden of Proof

Proving market rate has changed is sufficient

Proving unforeseeability and difficulty of performance is mandatory

Court of Cassation Practice: The Court of Cassation 3rd Civil Chamber accepts that an adaptation action may be filed even if the period for filing a rent determination action (5 years) has not expired, provided the conditions are met. However, the amount determined in the adaptation action is determined not according to "comparable market rates" as in the rent determination action, but according to the principle of "re-establishment of contractual balance." That is, adaptation aims not to raise the rent to the market rate but to bring it to a bearable level (or to reduce it).

C. Problem of Adaptation in Short-Term Contracts

According to the Court of Cassation's established case law, adaptation cannot be requested in "short-term" (for example, 1-year) lease agreements. Because the parties have assumed risk for a short period. However, even if the contract is initially for 1 year, if it has continued for many years (for example, 3-4 years) through implied renewals (TCO Article 347), a "long-term legal relationship" is deemed to have arisen and adaptation becomes requestable. Here the judge must take into account the actual duration of the contract.

III. PROCEDURAL AND SUBSTANTIVE PROBLEMS IN EVICTION CASES

Grounds for eviction in lease law are subject to the numerus clausus (closed list) principle. Eviction cannot be requested on a ground not written in the law (for example, on abstract grounds such as "I cannot agree with the tenant," "the neighbors don't like them").

A. Eviction Due to Necessity (TCO Article 350/1)

The lessor's authority to exercise the right to property and the lessee's right to housing conflict here. The Court of Cassation resolves this conflict through a "sincerity" test.

1. The Necessity Being "Genuine, Sincere, and Compulsory":

Continuity: The necessity must not be temporary. For example, needing the apartment for a summer holiday is not a ground for eviction.

Compulsion: If the lessor has another vacant apartment in the same area, they cannot have the tenant evicted. However, if the lessor's own residence is physically insufficient (for example, they need an apartment with an elevator due to health problems), this is a compulsory necessity.

Court of Cassation Case Law (Adult Child): The Court of Cassation accepts the wish of an adult child to live separately from their family as a "genuine necessity," even without economic means (because the family will support them). "The child not yet having married" or "being a student" does not in itself require rejection; however, the necessity must have "arisen." The claim of "will marry in the future" is not accepted unless there are concrete preparations (engagement, wedding date, etc.).

2. Necessity of Companies:

Legal persons (companies) may request eviction only on grounds of "workplace necessity." An eviction action cannot be filed on grounds of "housing necessity" for use as company accommodation (Court of Cassation General Assembly decisions).

3. Three-Year Prohibition on Leasing (TCO Article 355):

After eviction is achieved due to necessity, the real property cannot be leased to anyone other than the former tenant for 3 years without a justified reason. Otherwise, compensation of not less than the last year's rent is paid to the former tenant. The "justified reason" here refers to situations arising after the eviction that are not due to the fault of the lessor (for example, the death of the lessor, being compelled to sell the property due to deterioration of financial circumstances, etc.).

B. New Owner's Necessity (TCO Article 351)

This provision grants a special opportunity to the person who purchases the real property. However, the periods are preclusive and relate to public policy.

• Process: The new owner must give written notice to the tenant within 1 month from the date of the land registry transfer. The action, however, can be filed 6 months after the date of acquisition.
• Critical Point: If the term of the lease agreement expires before the 6-month period, the new owner may, if they choose, send a warning within 1 month and also file an action at the expiration of the agreement (relying on TCO Article 350). That is, TCO Article 351 grants the new owner an additional right; it does not eliminate the right under Article 350.

C. Eviction Due to Two Justified Warnings (TCO Article 352/2)

This is the path taken when the tenant has a poor habit of paying rent.

Conditions:

1. Must be within the same lease year (period).
2. There must be unpaid rent for two separate months.
3. A separate written warning must be sent for each non-payment situation.
4. The warnings must be justified (i.e., the debt must be unpaid when the warning is served).

Filing Period: The action must be filed within 1 month from the end of the lease year.

Practice Note: Stating in the warning notice "pay within 30 days otherwise I will file an eviction action" (TCO Article 315 — Default) does not prevent the two justified warnings from being constituted. What matters is the service of the warning. Even if the tenant makes payment after the warning, that warning is recorded as a "justified warning" and constitutes a basis for the eviction action.

D. Eviction Undertaking (TCO Article 352/1)

This is the most powerful eviction instrument in practice, but its validity is subject to strict formal requirements.

1. Writing: Ordinary written form is sufficient; there is no notary requirement (however, notary is preferred for proof purposes).

2. Date: The date of the undertaking must be after the date the lease agreement was made. Undertakings with the same date as the agreement are considered invalid due to the tenant's state of constraint (being in a difficult situation).

3. The "Signing Blank Paper" Issue: According to the established and criticized case law of the Court of Cassation General Assembly: if the tenant signed and gave the eviction undertaking as blank, when the lessor subsequently fills in the dates, the tenant cannot object by saying "the dates were filled in later." Because "the one who signs is deemed to have accepted the content." The tenant can only be freed if they prove that the signature on the document does not belong to them or that the document was obtained by force (defect of will). This situation produces a very severe consequence against the tenant from the perspective of the law of evidence.

IV. LITIGATION PROCEDURE AND MEDIATION

As of 01.09.2023, mediation has become a condition for filing suit in lease disputes (except for non-judgmental enforcement proceedings).

• Scope: Rent determination, adaptation, eviction, and receivable actions fall within this scope.
• Enforcement Court Exception: Actions for lifting of objection and eviction filed in the Enforcement Court as a result of "Form 13" (eviction due to non-payment of rent) and "Form 14" (eviction based on eviction undertaking) proceedings under the Enforcement and Bankruptcy Law are not subject to mediation. However, an "annulment of objection and eviction" action to be filed in the Civil Court of Peace is subject to mediation. This procedural distinction carries strategic importance for attorneys seeking to save time.

V. CONCLUSION AND EVALUATION

Lease law has a dynamic structure shaped by economic and social realities rather than static rules.

1. In Adaptation Cases: When intervening in the contract, judges must observe the balance between "freedom of contract" and "justice"; recognizing the inflationary environment as "extraordinary," they must find a middle path that protects the tenant from economic ruin and the lessor from becoming deprived of property value.
2. In Eviction Cases: Formalism is fundamental. Lawyers must be meticulous not to miss the deadlines (warning, filing of action); and judges must strictly apply the sincerity test in claims of "necessity," preventing eviction from being used as a "rent increase tool."

In the final analysis, the resolution of lease disputes lies not merely in statutory texts but in the equitable interpretations that the Court of Cassation has developed along the axis of the "principle of good faith."