What can parties do when they cannot agree on a rent increase?
An action for the determination of rent is the route when the parties cannot agree on an increase. Timing, procedure and consequences.
By: Can Karadavut
In lease agreements the rate of increase applies as agreed in the contract, or within statutory limits where no agreement exists. When the parties cannot agree, the route is an action for the determination of rent.
When the action must be filed
The action must be filed at the latest thirty days before the start of the new lease period, or the landlord must deliver written notice of the increase to the tenant within that period. Where this condition is met, the action may be filed until the end of the new period and the judgment takes effect from the start of that period.
If no notice was given and the deadline was missed, the determination applies only from the following lease period — a year is lost.
What the court considers
For leases shorter than five years, the change in the consumer price index is the upper limit. For leases running longer than five years, the judge determines the new figure having regard to comparable rents, the condition of the property and equity. In practice an expert examination and a survey of comparables are carried out.
Not to be confused with eviction
Determination of rent and eviction are separate actions. Failing to agree on an increase is not in itself a ground for eviction. Eviction is possible only in the cases listed in the law (need, reconstruction, an eviction undertaking, two justified notices, and so on).
On the tenant's side
If the requested increase appears excessive, stopping payment altogether is a risky course; accumulated rent arrears may give rise to a ground for eviction. In practice, continuing to pay the undisputed portion and leaving the difference to the outcome of the case is preferred.
This article is for general information only and does not replace legal advice on a specific matter. Rates and periods in the legislation may change.