Legal AlertThe Maximum Limit of 25 Per Cent for Housing Rent Increases Has Been Extended Until 01.07.2024

20 July 2023

“Law No. 7456 Amending Certain Laws and Decree Law No. 375 on the Amendment of Additional Motor Vehicles Tax for the Compensation of Economic Losses Caused by the Earthquakes Occurred on 6/2/2023″ (“Amending Law”) has been published in the Official Gazette dated 15.07.2023 and numbered 32249. With the Amending Law, a provisional article (“Provisional Article”) – which extends the implementation date of the 25% maximum limit on residential rent increases until 1 July 2024 – was added to the Turkish Code of Obligations (“TCO”) dated 11.01.2011 and numbered 6098.

The Provisional Article states the following:

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 remains below twenty-five percent, the rate of change shall be valid. This rule also applies to lease agreements longer than one year. Agreements made in excess of these rates are invalid in terms of excess amount. The provision of this paragraph shall also apply to the decisions to be made by the judge pursuant to the second paragraph of Article 344.”

The Provisional Article extends the 25% price increase limitation introduced until 01.06.2023 for residential lease rates with the Law No. 7409 on the Amendment of the Law on Lawyers and Turkish Code of Obligations (“Law No. 7409”) published in the Official Gazette on 11.06.2023 until 01.07.2024 (including this date). The maximum limit for the increase in rent is only valid for residential lease agreements.

Pursuant to Article 344/1 of the Turkish Code of Obligations, the increase limit for workplace rents is set as “CPI twelve-month averages change rate”. The rent increase provisions in the agreements for rent increases related to land lease agreements will be valid regardless of the limit.

When the rate of increase is to be applied in residential lease agreements, the rate of change according to the twelve-month averages of the CPI announced in the month of the increase, the rate agreed in the residential lease agreement and the 25% limit set by the Amending Law will be compared and the lower rate in favour of the tenant will be used in determining the rent increase.

The maximum limit of 25% for the increase in the rental price determined for residential lease agreements will be valid between 11.06.2022 – 01.07.2024.

Between 01.07.2023 – 15.07.2023, if the rent increase rate agreed in the residential lease agreement between 01.07.2023 – 15.07.2023 is applied above 25%, the part exceeding 25% will be invalid and the tenant will be able to demand the return of the excess part based on the provisions of unjust enrichment.

Unless otherwise is regulated, the rent agreed in the housing lease agreements renewed after 01.07.2024 may be increased by the maximum rate of change according to the CPI twelve-month averages. The parties may have agreed to a lesser amount in the contract concluded between them.

In terms of the article introduced by the Amending Law, there is no provision that would prevent the filing of a lawsuit for the determination of the rental price.

You can access the relevant Amending Law from the link below: