Pursuant to Provisional Article 1 of the Turkish Code of Obligations No. 6098, the rent increase rate in the lease agreements to be renewed between 08.06.2022 - 01.07.2023 could not exceed 25%, and if it exceeded, the additional amount will be deemed invalid. As the expiry date of the relevant article approached, it was a matter of great curiosity for the public whether the relevant article would be extended again. Minister of Justice Yılmaz Tunç announced that the 25% rent increase limit will be extended for one more year.
The relevant article entered into force after being published in the Official Gazette dated July 15, 2023 and numbered 32249. Pursuant to the relevant amendments, effective as of 02.07.2023, the 25% rent increase rate will continue until July 1, 2024 in line with the provisions of Provisional Article 2 added to the Code of Obligations No. 6098 regarding the limited rate of rent increase in residential lease agreements.
Starting from July 2, 2023 until July 1, 2024, rent increases in residential lease agreements subject to renewal cannot exceed 25% of the previous year's rent amount. Since the upper limit in question is regulated as a temporary article, it is valid between July 2, 2023 and July 1, 2024, unless there is a subsequent extension in terms of duration, and it deals with rent increases during this period. In order for the Consumer Price Index (CPI) rate of change to be applied for rent increases, the CPI rate of change for the previous lease year must be below 25% compared to the 12-month average. If the rent increase exceeds the amount stipulated in the law, the additional amount will be deemed invalid.
Provisional Article 2:
Agreements regarding the rental price to be applied in the lease periods renewed between 2/7/2023 and 1/7/2024 (including these dates) in terms of residential rents are valid, provided that they do not exceed twenty-five percent of the rental price of the previous lease year. If the rate of change in the consumer price index of the previous lease year according to the twelve-month averages is below twenty-five percent, the rate of change is valid. This rule applies for periods longer than one year also applies to lease agreements. Contracts made in excess of these rates, excess invalid in respect of the amount. Pursuant to the second paragraph of Article 344 shall also apply to decisions to be made by the judge.
In the event that the parties cannot reach an agreement on the rent increase rate to be applied in the new lease period, pursuant to the reference to Article 344/2 of the TCO in the temporary lease arrangement, the judge will take this amendment, which limits the exorbitant rent increase, as a basis when assessing the rent increase rate. Although, in theory, Article 344/2 of the TCO relates to lease agreements without a rent increase clause, in practice, the absence of a rent increase clause in residential lease agreements is not common. Regarding the 'rent determination lawsuits' filed for lease agreements that have expired for 5 years pursuant to Article 344/3 of the TCO, it should be argued that it would be more appropriate to prevent judges from issuing high increase decisions by taking into account today's precedent rents. It should be noted that landlords have the right to increase the rent for tenants who have completed their 5th year by filing a rent assessment lawsuit, and there is no 25% limit here. However, in the event that the landlords request a rent increase above 25% and the tenant does not accept it, if an eviction lawsuit is filed due to underpayment of the rent; the lawsuit will be rejected as the courts are bound by the legal regulation.
This cap on rent increases does not apply to workplaces in terms of scope, but only to residential buildings. Therefore, in terms of workplace rents, the CPI rate increase rule in the Law will continue to be applied. Although this regulation appears as a protective regulation for residential tenants against rent inflation, the fate of this regulation after July 2, 2024 will be evaluated according to the rent inflation of that day. In summary, it is possible to say that as of the effective date of the temporary law, all residential tenants who renew their lease agreements will benefit from this rule.