When and How Much Your Renter Can Raise the Rent?
As rent prices have spiked by an unprecedented degree over the past 12 months, it is important to know when and how much your landlord can raise the rent as per the relevant legislations in Turkey.
When entering a residential agreement for the first time, parties can agree upon the amount of rent freely. The rent can be increased when the first rental term is concluded and the agreement is renewed for another term (which happens automatically) and not sooner.
As per the Article 344 of the Law of Obligations No. 6098 (“Law of Obligation”), the agreement between parties with regard to increase in rent in a renewed rental period is valid so long as the rate of increase does not exceed last rental year’s (previous rental period) 12-month average of consumer price index (we will refer to this average as “CPI” for convenience or “TÜFE” in Turkish). In other words, it is illegal for a landlord the increase the rent more than the CPI. (Note: CPI is announced by Turkish Statistical Institute and can be found on the following link, which has an English page: https://www.tuik.gov.tr)
Furthermore, if the rental price is agreed upon in foreign currency (e.g. USD) in the agreement, it cannot be changed before five years have passed.
What is the New Temporary Rent Cap?
A new law was approved by the Turkish Grand National Assembly on 8 June 2022 which limits the rate of increase with regard to rental prices to 25% of the rent of the previous rental year. The New Law came into effect on 11 June 2022, when it was published in the official gazette. As per this legislation, the rental price will continue to increase as per the CPI, provided that the it is below 25%, in which case, it will cap at 25%. The New Law will be valid until 1 July 2023. This law pertains only to residential agreements and not commercial ones.
How to Respond to an Illegal Rent Increase?
If the Renter notifies you that they unilaterally increased the rental price before the renewal period or to an illegal degree, this notification will have no legal effect. Tenants can still continue to pay their rent as per their agreement, or if the agreement is renewed, the increased legal amount as per CPI (or 25% as the case may be).
Can the Renter File a Lawsuit to Adjust the Rent?
As per the Article 345 of the Law of Obligations, a lawsuit to determine rental price can be commenced at any time. However, this lawsuit will only affect current rental period if the lawsuit is filed before (at least) 30 days of the renewal date or if the landlord notifies the tenant in writing that the rent will be increased within that period. The judge cannot decide on an increase above 25% so long as the new legislation is in effect.
