Understanding Turkey's Rent Regulations: A Comprehensive Guide for Landlords and Tenants

Renting a property is an essential part of adult life for many individuals. However, in recent times, rent prices have skyrocketed to unprecedented levels, causing financial strain for tenants. In response to this issue, the Turkish government has implemented rent regulations to protect tenants from exorbitant rent increases. This article will explore the benefits of Turkey's rent regulation for tenants and provide an overview of the key provisions.

Understanding Rent Increases in Turkey

Before delving into the details of Turkey's rent regulations, it's crucial to understand how and when landlords can raise rent. When entering into a residential lease for the first time, both parties have the opportunity to negotiate the initial rent amount. However, once the initial rental period ends and the agreement is automatically renewed for another term, landlords are allowed to increase the rent.

Under Article 344 of the Law of Obligations No. 6098 ("Law of Obligation"), any rent increase in a renewed rental period must not exceed the previous rental year's 12-month average of the Consumer Price Index (CPI). In other words, landlords cannot raise the rent by a higher percentage than the CPI. The CPI is announced by the Turkish Statistical Institute and serves as a benchmark for determining rent increases.

The New Temporary Limit on Rent Increases

In response to the alarming rise in rent prices, the Turkish Grand National Assembly passed a new law on June 8, 2022. This law sets a temporary limit on rent increases, capping them at 25% of the previous year's rent. The law went into effect when it was published in the official gazette on June 11, 2022. The temporary limit on rent increases will remain in effect until July 1, 2023. It's important to note that this law only applies to residential leases and not commercial ones.

This new law aims to provide relief for tenants by ensuring that rent increases align with the CPI and do not exceed 25%. Landlords must adhere to this cap and cannot impose rent increases that surpass the designated limit. This measure offers stability and predictability for tenants, allowing them to better manage their finances and plan for the future.

Consequences of Illegal Rent Increases

If a landlord attempts to unilaterally increase the rent before the renewal period or exceeds the legal limit, such notice will have no legal effect. Tenants have the right to continue paying rent according to their existing agreement or, if the lease is extended, the rent will increase by the CPI or 25%, whichever is applicable under the law.

It's crucial to note that landlords cannot evict tenants for refusing to pay an illegal rent increase, even if the rental agreement has expired. This protection ensures that tenants are not unfairly penalized for asserting their rights. In the event of a dispute, tenants can refer to the law to protect themselves from unjust rent increases and potential threats of eviction.

Rent Increases During an Existing Lease

Article 345 of the Law of Obligations allows tenants to file a lawsuit at any time to determine the rental price. However, this lawsuit will only impact the current rental period if it is filed at least 30 days prior to the renewal date or if the landlord provides written notice of a rent increase during the current period. This provision primarily applies to rental agreements that have reached their fifth year.

In cases where there is no agreement between the parties regarding rent increases, the judge may determine the rental price based on the condition of the rented property, considering equity and fairness principles, as long as the increase does not exceed the CPI. However, if the rental duration exceeds five years or the rental contract is renewed after five years, the judge may consider factors such as market price and the CPI when determining a new rental price that surpasses the CPI.

It's important to mention that the new law also applies to these types of litigation. Therefore, the court cannot rule on an increase that exceeds 25% as long as the new law is in effect. This provision provides additional protection for tenants and ensures that rent increases remain within reasonable limits.

Calculating the Ideal Rent Amount

Determining the perfect rent amount involves considering various factors, including the CPI and the terms of the rental agreement. When applying rent increases for residential leases, landlords and tenants should compare the change rate based on the 12-month average of the announced CPI, the agreed-upon rate in the rental contract, and the maximum 25% limit set by the new law. The lowest of these three rates should be used to calculate the rent increase.

The maximum 25% limit for rent increases in residential leases is applicable from June 11, 2022, until July 1, 2023. Any rent increase that exceeds this limit between July 1, 2023, and July 15, 2023, will be invalid, and tenants have the right to request a refund for the excess amount based on the principles of unjust enrichment. After July 1, 2024, landlords can apply rent increases based on the CPI unless otherwise specified in the rental contract.

Conclusion

Turkey's rent regulations provide essential protection for tenants, particularly in a time of soaring rent prices and economic challenges. The temporary limit on rent increases ensures that tenants are not subjected to unfair financial burdens and allows them to plan their budgets more effectively. By adhering to the provisions of the law, landlords can maintain a fair and transparent rental market while providing tenants with stability and peace of mind.

It's important for both landlords and tenants to be aware of their rights and obligations under the rent regulations in Turkey. Seeking legal advice from an expert attorney can provide valuable guidance in navigating any disputes or uncertainties related to rent increases. With the help of professionals like Lexin Legal, tenants can find solutions to their rental problems and ensure their rights are protected.

Frequently Asked Questions (FAQs)

1. What is the maximum limit for rent increases in Turkey?

The law caps rent increases at 25% or the CPI change rate, whichever is lower. This applies to residential leases from June 11, 2022, until July 1, 2023.

2. What happens if a landlord imposes an illegal rent increase?

Any rent increase that exceeds the legal limit or is attempted before the renewal period is considered invalid. Tenants can continue paying rent according to their existing lease agreement.

3. Can a tenant be evicted for refusing to pay an illegal rent increase?

No, landlords cannot evict tenants for refusing to pay an illegal rent increase, even if the rental agreement has expired.

4. Can a tenant file a lawsuit to determine the rental price?

Yes, under Article 345 of the Law of Obligations, tenants can file a lawsuit at any time to determine the rental price, with certain conditions applicable.

5. How is the ideal rent amount calculated?

The rent amount should consider the 12-month average of the announced CPI, the agreed-upon rate in the rental contract, and the maximum 25% limit. The lowest rate among these should be used for calculation.

6. What happens after July 1, 2024, regarding rent increases?

From this date, landlords can apply rent increases based on the CPI unless otherwise specified in the rental contract.

7. What kind of protection does the rent regulation law provide for tenants?

The law provides protection against unreasonable rent increases and potential eviction threats, allowing tenants to manage their finances better and plan for the future. Additionally, it guarantees a fair and transparent rental market.

1. What other steps can landlords and tenants take to ensure a successful tenancy?

Landlords and tenants should stay informed of the law and their rights, while seeking professional legal advice when needed. It's also important to keep lines of communication open between both parties so that they can reach an agreement in a mutually beneficial way. This will help create a positive atmosphere for both landlord and tenant.