How Will The New Rent Increase Rates Be Determined?

As of July 1, 2024, the temporary law limiting the 25 percent increase in residential rents in Türkiye expires. Statements by the relevant ministries indicate that this restriction will not be extended for a third time.

The regulation will not bring any changes to workplace rents as they are out of scope; the CPI increase limit will continue to be applied in workplaces. However, how will residential rents be affected by this development? Altınbaş University Faculty of Law Faculty Member Prof. Dr. Umut Yeniocak evaluated the situation through different lease agreements.

According to Prof. Dr. Umut Yeniocak's statements, how the rent increase will be applied may vary as follows through examples depending on the provisions in the lease agreements:

If the beginning of the lease is March 1;

The removal of the 25 percent increase limitation does not mean that landlords can immediately demand an additional rent increase as of July 1. In every lease agreement, the increase can be applied on the date the lease year ends and once a year. For example, for a lease renewed on March 1, the landlord must wait until March 1, 2025 to increase the rent by CPI. It is not legally possible to request an increase before then.

If it is written in the lease agreement that the increase will be made at the rate of CPI; 

If there is a rule in the lease agreement that the rental price will be increased by CPI every year, this provision, which cannot be applied due to the 25 percent increase limitation applied for the past two years, will enter into force again after July 1, 2024. For example, if the lease period ends on September 1, the rent for the new lease period will be determined by applying the twelve-month average CPI rate as of September 1, 2024.

If WPI/CPI average is written in the lease agreement; 

If it is written in the lease agreement that the rental price will be increased at the rate of the WPI / CPI average each year, according to the provision of the law in force since January 2019, this increase clause is invalid to the extent that it exceeds the CPI rate. After the 25 percent increase limit is lifted, it will be legally necessary and sufficient to increase the CPI rate as of the date the new lease period will begin.

If the increase rate is fixed in the lease agreement;

If the lease agreement states, for example, that the rent will be increased by 30 percent each year, this rule, which cannot be applied due to the 25 percent limit, will now be applicable. It should be noted here that even if the CPI rate is higher, the rate in the contract should not be exceeded. In contracts where the rate of increase is fixed, even after the 25 percent limit is removed, the rate in the contract is applied, not the CPI rate. In this case, an adaptation lawsuit may need to be filed to remedy the victimization.