WHAT CAN BE DONE LEGALLY IN THE CASE OF EXORBITANT RENT INCREASE IN TURKEY?
The rent for a residential property is determined by the agreement between the landlord and the tenant, and this agreement provides for an arrangement regarding rent increases. Although the law and other legal regulations set a maximum rate for rent increases by the state, landlords are demanding exorbitant rent increases from their tenants today due to high inflation. This situation creates financial difficulties for tenants, who are forced to endure rack rent. Rack rent is a significant problem for tenants, and it is possible to find a solution to this problem through legal means.
IS IT POSSIBLE TO INCREASE RENT IN TURKEY MORE THAN THE CPI (TÜFE) RATE?
An exorbitant rent increase is when the current rent is raised to an unreasonably high level compared to market conditions. This situation usually arises when the landlord increases the rent amount when renewing the tenant’s contract.
In Turkey, before making a rent increase, landlords should consider the 12-month average Consumer Price Index (TÜFE) rate announced by the Turkish Statistical Institute (TÜİK). Increasing the rent by the TÜFE rate is the landlord’s legal right. However, if the landlord wants to increase the rent by more than the TÜFE rate, the tenant is not obliged to accept this high rent increase in Turkey. Since TÜFE rate is upper limit for rent increase in Turkey, an increase in rent above the TÜFE rate is only valid with the tenant’s consent.
TEMPORARY REGULATION SETTING AN UPPER LIMIT FOR RENT INCREASES TO 25%
The price increases applied to rental housing in Turkey have reached quite high levels, especially in recent years. This situation has created a serious financial burden for tenants, leading to the idea that rent increase rate in Turkey should be limited. Therefore, it was decided to temporarily upper limit for rent increases to 25% in Turkey for residential properties. This regulation introduced a temporary limitation in residential lease agreements under the Turkish Code of Obligations No. 6098. According to the current situation, the 25% rent increase rate has been extended until July 1, 2024, as per the provisions of Temporary Article 2.
According to this regulation, the rent increase rate in Turkey for residential rents is limited to a maximum of 25%. In this context, demanding an increase of more than 25% in rent until July 1, 2024, is not legally required to be accepted by the tenant. This measure aims to prevent tenants from being victimized. However, limiting rent increase rate in Turkey has also brought about some drawbacks.
Firstly, the limitation of rent increases in Turkey has resulted in a decrease in landlords’ income. Therefore, it is thought that landlords may be inclined to sell their rental properties instead of raising rental prices. This situation could create an imbalance between supply and demand in the housing market.
Another negative impact is the reduction in the supply of rental housing. Landlords being capped at a rent price that tenants can pay may lead to a decrease in the supply of rental housing. In this case, it may become even more difficult for tenants to find affordable rental housing.
In conclusion, the temporary regulation limiting rent increases to 25% in Turkey is an implementation intended to protect tenants, but it has also brought some drawbacks. Therefore, further study on the issue and finding the most appropriate solution by considering the views of all parties involved is necessary.
HOW MUCH CAN A LANDLORD INCREASE RENT FOR RESIDENTIAL PROPERTIES IN TURKEY?
Between June 11, 2022, and July 1, 2024, for renewed rental agreements, the landlord can set the rent increase rate in Turkey to a maximum of 25%. However, whichever is lower between the TÜFE (Consumer Price Index) increase rate and the legal increase rate will be applied.
In the table below, the rent amount is taken as 5,000 TL for a rental agreement renewed in January 2024.
| Increase Type | TÜFE Increase Rate (53.86%) | Legal Increase Rate (25%) |
|---|---|---|
| Rent Increase Amount | 2,693 TL | 1,250 TL |
| Updated Rent Amount | 7,693 TL | 6,250 TL |
As seen in the table above, the TÜFE rent increase rate exceeds the legal rate. Therefore, the landlord can legally increase the rent by a maximum of 1,250 TL instead of 2,693 TL.
Additionally, if the TÜFE increase rate falls below the legal increase rate of 25% between June 11, 2022, and July 1, 2024, the maximum rate will be considered the legal rate.
The relevant legal regulation is as follows: “For residential rents, agreements on the rent amount to be applied in renewed rental periods between the date this article comes into force and 1/7/2023 (including this date) will be valid, provided that they do not exceed twenty-five percent of the previous rental year’s rent amount. If the change rate according to the twelve-month averages of the consumer price index of the previous rental year is below twenty-five percent, the change rate will be valid. This rule also applies to rental agreements longer than one year. Agreements made in excess of these rates will be invalid for the excess amount. This paragraph’s provision also applies to decisions made by a judge pursuant to the second paragraph of Article 344.” (This regulation ends on July 1, 2024.)
HOW MUCH CAN A LANDLORD INCREASE THE RENT FOR COMMERCIAL PROPERTIES IN TURKEY?
Rent increases for commercial properties are based on the Consumer Price Index (CPI) rates determined by TUIK (Turkish Statistical Institute). There is no restriction limiting rent increases for commercial properties to 25%. The table below shows the CPI rates from January 2024 to July 2024:
| MONTH | RENT INCREASE RATE |
|---|---|
| January | 54.72% |
| February | 55.91% |
| March | 57.50% |
| April | 59.64% |
| May | 62.51% |
| June | 65.07% |
For example, assuming the monthly rent for a commercial property is 10,000 TL and a rent increase is due in July 2024. With a CPI rent increase rate of 65.07%, the increase amount would be 6,507 TL, resulting in a new monthly rent of 16,507 TL.
Landlords can increase rents for commercial properties up to the CPI rate. If agreed upon by both parties, the landlord can increase the rent by an amount lower than the CPI rate. However, they cannot exceed the CPI rate for rent increases. In our example, the landlord can increase the rent by a maximum of 6,507 TL.
WHAT ARE THE RENT INCREASE RATE IN TURKEY FOR RESIDENTIAL PROPERTIES IN 2024?
For January 2024, the rent increase rate has been determined as 53.86% according to the Turkish Statistical Institute (TÜİK) data. However, in accordance with Law No. 7409 “Amendment to the Attorneyship Law and the Turkish Code of Obligations” which was published in the Official Gazette dated June 11, 2022, and numbered 31863, a temporary article added to the Turkish Code of Obligations No. 6098 (TBK) stipulates that rent increases for residential properties between June 11, 2022, and July 1, 2023, cannot exceed 25%.
This regulation was later extended until July 1, 2024. Therefore, during this period, the maximum rent increase rate for residential properties can be 25%. For commercial properties, the TÜFE rates announced by TÜİK for the month in which the rental period is renewed will apply.
WHAT ARE THE RENT INCREASE RATES FOR RESIDENTIAL PROPERTIES AFTER JULY 1, 2024?
As of July 1, 2024, the temporary regulation limiting rent increases to 25% for residential properties has not been extended. Consequently, the 25% limit on rent increases will no longer apply to residential leases renewed after this date.
For residential leases renewed after July 1, 2024, the rent increase rate will be determined according to the TÜFE rate. Even if there is an agreement in the lease contract for a higher increase, it can not exceed the TÜFE rate. In summary, for lease agreements renewed after July 1, 2024, the rent increase rate will be based on the TÜFE rate, without being limited to 25%.
HOW IS THE RENT AMOUNT DETERMINED IN TURKEY?
The rent is determined according to the provisions of Article 344 of the Turkish Code of Obligations. According to these provisions:
- Agreement Between Parties:
- Agreements made by the parties on the rent to be applied in the renewed rental periods are valid, provided they do not exceed the change rate according to the twelve-month averages of the consumer price index of the previous rental year.
- Determination by Court:
- If the parties have not made an agreement on this matter, the rent will be determined by the court, based on the change rate according to the twelve-month averages of the consumer price index of the previous rental year, considering the condition of the rented property and ensuring fairness.
- Rent Determination Lawsuit:
- If the parties cannot agree on the rent amount or if there is a clause in the lease agreement regarding the increase of the rent, a rent determination lawsuit can be filed. In such cases, the court will determine a fair rent amount considering the condition of the rented property.
The rent determined as a result of the lawsuit is applied from the beginning of the rental period following the lawsuit. However, there are specific periods and procedural steps for filing the rent determination lawsuit. Therefore, careful attention must be paid to the relevant processes and their follow-up during the process of rent determination by the court.
WHAT SHOULD A TENANT DO IF THE LANDLORD WANTS AN UNREASONABLE RENT INCREASE ?
Until July 1, 2024, it is prohibited for landlords to increase the rent by more than 25%, as clearly regulated by the Temporary Article 2 of the Turkish Code of Obligations. Therefore, any agreements made in violation of this mandatory provision of the law are absolutely null and void.
For rental agreements renewed after July 1, 2024, it is legally impossible to increase the rent by more than the TÜFE (Consumer Price Index) rate. If the landlord pressures for an exorbitant rent increase, the tenant should apply the TÜFE rate increase and pay the rent accordingly. By doing so, the tenant avoids falling into default and facing an eviction lawsuit by making a valid rent payment.
Article 27 of the Turkish Code of Obligations states that contracts violating mandatory provisions of the law, morality, public order, or personal rights, or whose subject is impossible, are absolutely null and void. Therefore, any high rent increase in Turkey exceeding 25% or the TÜFE rate is considered absolutely null and void.
In the case of an unreasonable rent increase in Turkey, the tenant should seek legal support from an expert lawyer and take legal action if necessary. The lawyer’s guidance is essential for initiating legal proceedings and taking the necessary steps. Obtaining legal support is important for protecting the tenant’s rights and acting within the legal framework for rent disputes in Turkey.
HOW CAN A TENANT OBJECT TO RENT INCREASE IN TURKEY?
In many countries, landlords can increase rents annually based on inflation rates. However, this upper limit can vary by country and state and may not always be applicable. Therefore, before making a rental price increase, landlords should review the current legal regulations in their country and act in accordance with the terms specified in the rental agreement.
Moreover, demanding an increase beyond the periods and rates specified in the rental agreement is not legally acceptable from the tenant’s perspective. In other words, the landlord can not arbitrarily increase the rent and must comply with certain legal regulations and contract terms for rental price increase.
If a landlord demands a rental price increase in Turkey that exceeds the legal limits and the TÜFE rate, tenants can consult a lawyer to determine if the requested increase complies with the law and the rental agreement.
It is important to note that, there is no need to report a landlord requesting an exorbitant rent increase in Turkey to any authority. This is because, without the tenant’s consent, such an unreasonable rent increase is not valid. If the landlord insists on a high rent increase in Turkey, the tenant’s first legal step is to send a written notice via a notary, stating that they do not accept the exorbitant rent increase and object to rent increase in Turkey. The tenant should clearly state in this notice that they do not accept the exorbitant rent increase and that the demand for a high rental price increase is not legally valid.
Both the Turkish Code of Obligations and other legal regulations clearly outline the upper limit for rent increases for residential properties. In summary, if a landlord has a demand for a rack rent due to market conditions or inflation, they can exercise this right only by filing a lawsuit. However, they can only exercise the right to file a lawsuit by proving the conditions specified in the laws and complying with the legal deadlines and tenants have right to object to rent increase in Turkey.
CAN A LANDLORD BE PENALIZED DUE TO RACK RENT?
In residential rental relationships, there are limitations on rent increases as outlined in the Turkish Code of Obligations, Article 6098, and its temporary article. According to this provision, from June 11, 2022, to July 1, 2023, the rent increase rate in Turkey cannot exceed 25% of the previous year’s rent. This rule applies if the twelve-month average change rate in the consumer price index of the previous year is below 25%.
Under this regulation, the rent increase rate in Turkey for residential lease agreements can not exceed 25% until July 1, 2024. Even if an agreement between the parties specifies an increase above 25%, such an increase is deemed invalid under this rule, and the rent increase will be capped at 25%.
For residential leases renewed after July 1, 2024, the upper limit for rent increases will be the TÜFE (Consumer Price Index) rates. If a rent increase exceeding the TÜFE rate is demanded, the tenant is not obliged to accept this increase.
If the landlord demands an rack rent in Turkey, the tenant has legal recourse. However, there is no legal penalty stipulated for a landlord who unlawfully demands a high rent increase in Turkey. The landlord will not face any penalty for requesting a high rent increase in Turkey.
In such cases, the tenant can exercise their legal rights and insist on applying the legal maximum increase rate. The tenant should continue to pay rent based on the legally permitted increase rates in case of rent disputes. By fulfilling their legal obligations in this way, the tenant’s rights are protected.
HOW MUCH RENT INCREASE CAN BE APPLIED TO A TENANT WHO HAS COMPLETED 5 YEARS?
The topic of increasing the rent for a tenant who has completed five years is significant in Turkish law. In Turkey, for lease agreements longer than five years or renewed after five years, and every five years thereafter, the new rent amount is determined based on factors such as the consumer price index (TÜFE), comparable rental rates, and the condition of the rented property. The process must follow local legal regulations, and the rent increase for a tenant who has completed five years should adhere to the terms and rates specified in the lease agreement.
If the parties cannot reach an agreement, the landlord can file a rent determination lawsuit to have the rent amount adjusted according to current conditions.
The legal basis for rent determination lawsuits is found in Article 344 of the Turkish Code of Obligations. These regulations play a crucial role in ensuring a fair and balanced rent amount in the relationships between tenants and landlords. By adhering to the laws and the lease agreement, both the tenant and the landlord can prevent rent disputes and maintain a stable relationship.
THINGS TO CONSIDER FOR RENTAL PRICE INCREASE PROCESS IN TURKEY
Rental price increases are made in accordance with the terms of the lease agreement. If there is an agreement, this provision applies. If the parties have determined the rent amount by agreement, any increase is also made according to the agreement. For renewed lease periods, the agreed rent amount between the parties is valid, provided that it does not exceed the twelve-month average change rate in the consumer price index of the previous rental year (TBK Article 344/1).
If there is a provision in the contract regarding rent increase for the new lease period, the rent amount determined by the court in a lawsuit to be filed until the end of the new lease period is also effective from the beginning of the new period (TBK Article 344/2).
If there is no agreement between the parties on how the rent amount will be renewed, a rent determination lawsuit can be filed. In this case, the rent amount is determined fairly, taking into account the condition of the rented property and not exceeding the twelve-month average change rate in the consumer price index of the previous rental year (TBK Article 344/2).
For tenants who have completed five years in their contracts or for lease agreements renewed after five years, and every subsequent five years, the rent amount to be applied in the new rental year is determined fairly, considering the twelve-month average change rate in the consumer price index, the condition of the rented property, and comparable rental rates (TBK Article 344/3).
Some points to consider regarding rent increases are as follows:
Rent increases should be made in accordance with the specified durations in the lease agreement:
According to the Turkish Code of Obligations, the rent can be increased once a year. However, the increase rate should not exceed the period specified in the lease agreement. For example, if the increase rate is specified as 10% in the agreement, the landlord can increase the rent by 10% once a year.
An official document should be issued for rent increase:
The landlord should issue an official document to the tenant for the rent increase, specifying the increase rate, increase dates, old and new rent amounts, and other relevant information. This document is important to prevent rent disputes between the parties and to prevent excessive rent increases.
Rent increases should not exceed the TÜFE rate:
Rental price increases should not exceed the rate determined by the Turkish Statistical Institute (TÜİK). This rate serves as the upper limit for rent increases. Increases exceeding the TÜFE rate are illegal and considered unjust rent increases.
The rent increase rate should be reasonable:
The rent increase rate in Turkey should be reasonable and fair. If the landlord wishes to increase the rent significantly, the tenant has the right to object to rent increase in Turkey
Legal recourse in case of rent disputes between the parties:
In case of rent disputes regarding exorbitant rent increase in Turkey, a rent determination lawsuit can be filed. In this lawsuit, the court determines the rent amount and resolves the dispute between the parties.
THE IMPORTANCE OF GETTING LEGAL SUPPORT FOR EXORBITANT RENT INCREASE IN TURKEY
Getting legal support in cases of exorbitant rent increases is crucial for tenants. Tenants can protect their rights situation of high rent increase in Turkey by seeking legal assistance.
Legal support can help tenants understand how they can legally challenge exorbitant rent increases. Lawyers can verify whether the rent increase specified in the lease agreement complies with legal limits. Moreover, they can encourage tenants to protect their rights in case of disputes over rent increases.
Rent cases involve lawsuits filed by landlords and tenants to protect their legal rights. In these cases, the court takes necessary actions to ensure that rent disputes are resolved fairly and in accordance with the law. Tenant lawyers advocate for tenants’ rights in rent cases and strive to achieve favorable outcomes for them.
Seeking legal support for excessive rent increases can help tenants protect their rights and avoid potential legal issues. For more detailed information, you can visit our “Rent Law Attorney” page.
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