Adaptation of Lease Agreements: Hardship and Conditions

TBK m.138 requires four cumulative conditions: (i) an extraordinary situation, unforeseen and unforeseeable at the time of contract formation, has arisen; (ii) it does not stem from the debtor; (iii) it has altered the circumstances existing at the time of contracting against the debtor to such a degree that performance would be contrary to the rules of good faith; and (iv) the debtor has not yet performed, or has performed while reserving rights arising from the excessive difficulty of performance.

If the conditions are met, adaptation may be requested. Where adaptation is impossible, TBK m.138 permits withdrawal or, ordinarily for continuing contracts such as leases, termination for the future. Filing an adaptation claim does not itself suspend the obligation to pay rent.

Settled case law of the 3rd and 6th Civil Chambers of the Court of Cassation holds that adaptation is possible where extraordinary changes arising after contract formation — unforeseeable by the parties — have disrupted the balance of performance to a manifest extent. The change must go well beyond ordinary inflationary fluctuations within the reasonable range the parties could have anticipated.

Courts conducting adaptation rely on expert reports, comparable rents, and CPI/PPI inflation rates; as a rule, adaptation is not given retroactive effect.

Trial preparation should include the date the contract was formed, prior records of rent increases, comparable-rent surveys, and financial documents showing the impact of the extraordinary change on the parties.

TBK m.344 sets the annual rent increase in residential and roofed-workplace leases by reference to the twelve-month average change in the consumer price index of the previous year. Increases exceeding this cap are invalid; claims based on hardship adaptation are assessed independently of this limit.

An important procedural reminder: under Article 18/B of Law No. 6325 on Mediation in Civil Disputes, added by Law No. 7445, in disputes arising from a lease relationship (excluding eviction of the leased property through enforcement without judgment) an application to a mediator before filing suit is a procedural precondition. This requirement has applied since 1 September 2023; an adaptation action filed without completing the mediation stage is dismissed on procedural grounds.

Real-estate disputes should be reviewed first on the basis of the land registry, encumbrance records, municipal and zoning status, actual use, and the payment records between the parties. In particular, in matters concerning deed cancellation, eviction, partition and condominium ownership a single document is rarely sufficient; official records must be assessed together with the factual situation.

Before commencing an action or transaction it is essential to identify time limits and the competent authority correctly. The court of the place where the immovable is located, the form requirements before notaries, land-registry procedures, dates of notices and service records can directly affect the course of the dispute.

When preparing evidence, the deed, official deed, lease, bank receipts, formal notices, building permits, management plans and other technical documents that may be subject to expert review should be filed separately. Such preparation enables a clearer legal framework both when filing an action and in settlement discussions.