As Turkey struggles with an annual inflation rate of over 70% and informal rent hikes of 100% in some cities, the country's government has decided to cap rent increases at a maximum of 25% per year until July 2023, according to a report from the state-owned Anadolu news agency that was published on Wednesday.
Because of soaring energy prices and an easing cycle by the central bank in accordance with President Tayyip Erdogan's economic plan that prioritizes production, exports, growth, and low rates, annual inflation reached its highest level since 1998 last month, reaching 73.5%. This is the highest it has been since 1998.
How Much Can Landlords Increase Rent in Turkey?
Unpleasant but inevitable, rent increases are a feature of adult life. However, as rent prices have skyrocketed to an unprecedented degree over the past year, it is crucial to understand when and by how much your landlord can increase the rent according to Turkish law.
When and How Can Your Landlord Raise Rent?
When entering into a residential lease for the first time, the parties are allowed to negotiate the rent amount. The rent can only be increased once the first rental period has ended and the agreement is automatically renewed for another term, and not before.
According to Article 344 of the Law of Obligations No. 6098 ("Law of Obligation"), the agreement between parties regarding rent increases in a renewed rental period is valid so long as the rate of increase does not exceed the previous rental year's 12-month average of a consumer price index (we will refer to this average as "CPI" for convenience or "TÜFE" in Turkish). In other words, it is against the law for a landlord to increase the rent by a greater amount than the CPI. (Note: CPI is announced by the Turkish Statistical Institute and may be found at https://www.tuik.gov.tr, which includes an English page)
What is the New Temp Limit on Rent?
The Turkish Grand National Assembly passed a new rule on June 8, 2022, limiting rental price increases to 25 percent of the previous year's rent. When the New Law was published in the official gazette on 11 June 2022, it became effective. According to this legislation, rental rates will continue to increase in accordance with the CPI, provided that the increase is less than 25%, which will be capped at 25%. The New Law will remain in effect until July 1, 2023. This law only applies to home leases, not commercial ones.
What to Do About an Illegal Rent Increase?
If the landlord notifies you that he or she unilaterally increased the rent before the renewal time or to an illegal degree, this notice will have no legal effect. Tenants may continue to pay rent in accordance with their agreement, or if the lease is extended, the rent will increase by CPI (or 25%, as applicable) in accordance with the law.
Even though the period of the renting agreement has expired, the landlord cannot evict a tenant for refusing to pay an illegal rent increase. This information may be useful in the event that the landlord threatens eviction.
Can Your Landlord Raise Rent During a Lease?
Article 345 of the Law of Obligations permits the filing of a lawsuit at any moment to determine the rental price. However, this lawsuit will only effect the current renting period if it is filed (at least) 30 days prior to the renewal date or if the landlord gives written notice to the tenant of a rent increase during the current period. However, this is for the 5th year of renting.
Suppose there is no rental price increase agreement between the parties. In such a circumstance, the judge may set the rental price based on the condition of the rented property, in accordance with principles of equity and fairness, so long as the rise does not exceed the CPI. Suppose, however, that the rental duration is longer than five years or that the rental contract is renewed after five years (regardless of whether there is an agreement between the parties regarding rental price increases). In such a scenario, the judge may determine a new rental price that surpasses the CPI, taking the market price and the CPI into account in addition to the aforementioned factors.
The New Law also applies to this sort of litigation. In other words, so long as the new law is in place, the court cannot rule on an increase more than 25%.
All efforts have been made to assure the accuracy of this publication at the time it was written. It is not meant to provide legal advice or promise a particular result, as each circumstance is unique and the law may have changed since publication. If a reader is considering legal action, he or she should consult with an expert attorney to see how current laws may affect a case. Please contact the author for specific technical or legal advice regarding the offered information and associated topics.
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