The lessor or lessee of the property has the right to request a rent adjustment when, due to a significant increase or decrease in the rental value of the property, damage occurs to the lessor or the lessee, respectively, which exceeds the risk that each of them assumed when entering into the lease with the agreed-upon rent, according to commercial practices.
The provision of Article 288 of the Civil Code, which states that “the debtor is obligated to fulfill the obligation as required by good faith, considering commercial practices,” also applies to commercial leases.
Thus, both the lessor and lessee have the right to request, under the aforementioned article, an adjustment to the agreed rent. This possibility exists when, due to unforeseeable circumstances, a substantial increase or decrease in the rental value of the property has occurred, such that maintaining the same rent would be contrary to good faith and commercial practices, given the specific circumstances.
If there is a discrepancy between the current rent being paid and the actual value of the property, it must be determined by the Court whether the difference is significant enough that, according to the principles of good faith, the need for rent adjustment arises.
A need for rent adjustment based on good faith principles exists when, due to a substantial increase or decrease in the rental value of the property, damage is caused to the lessor or lessee, which exceeds the risk they undertook when entering the lease with the agreed rent, according to commercial practices.
If the Court deems an adjustment necessary, the rent will be adjusted to a level that eliminates the disproportion and restores good faith.
Examples of changes in circumstances that may lead to a rent adjustment include a significant increase or decrease in the rental value of the property, a significant increase or decrease in the cost of living index (CPI), currency devaluation, fluctuations in property demand for various reasons, and other factors.
The elements of the claim for rent adjustment, based on the provisions of Article 288 of the Civil Code, are:
- A valid lease agreement
- A permanent change in circumstances between the time the lease was concluded and the time the lawsuit is filed, regardless of whether the causes of the change were due to the fault of either party, were extraordinary, or unforeseeable
A substantial deviation, at the time of filing the lawsuit, between what is required by good faith and commercial practices, on one hand, and the originally agreed-upon rent, on the other hand, in such a way that maintaining the original rent would cause damage to the plaintiff, which exceeds the risk assumed by the plaintiff under the original or any adjusted rent amount.
