The regulation regarding the 25% limitation on the increase in housing rentals has been published in the Official Gazette numberred 31863, dated 11 June 2022, and entered into effect.

June 14th 2022

The “Provisional Article 1” added to the Turkish Code of Obligations numbered 6098 with the Official Gazette dated 11.06.2022 and numbered 31863 is exactly as follows;

“In terms of residential rents, agreements regarding the rental price to be applied in renewed rental periods between the date of entry into force of this article and 1/7/2023 (including this date) are valid, provided that it does not exceed twenty-five percent of the rental price of the previous rental year. If the rate of change in the consumer price index of the previous rental year is below twenty-five percent compared to the twelve-month averages, the rate of change is valid. This rule also applies to lease agreements for more than one year. Contracts made to exceed these rates are invalid in terms of excess amount. The provision of this paragraph is also applied for the decisions to be made by the judge pursuant to the second paragraph of Article 344.”

25% Rent Increase Limitation

Before the "Provisional Article-1" regulation, which was published in the Official Gazette and entered into force as of its publication; According to article 344 of the Turkish Code of Obligations, the owners of the houses had the right to increase their rents, provided that they did not exceed the change rate according to the 12-month average in the consumer price index. However, with the new regulation, the rate of increase in the rental price is limited to 25%.

Provisional Article-1, regulates that an increase rate of more than 25% cannot be agreed upon in residential lease agreements concluded until 01.07.2023. If the increase rate is determined more than 25% in the rental agreement, the excess amount is invalid in the rent increases exceeding the 25% increase rate.

The 25% increase rate limitation covers only residential rents. The rule of increasing the Consumer Price Index (“CPI”) rate for workplace rents will continue.

FAQ About 25% Rent Increase Limitation

-Will the regulation affect retroactive lease agreements?
The lease agreement must be renewed between 1 July 2022 and 30 June 2023 to apply the %25 rent increase limit. With the arrangement made, the landlord can raise less than this rate, but will not be able to demand more. This rule can also be applied to lease contracts longer than one year, however, in lease contracts exceeding 5 years, a case for determination of rent may be filed and the rent may be re-determined.

-Can those whose contract is renewed in June 2022 benefit from the 25% increase limit?
Those whose lease contract is renewed in June 2022 will be able to increase by 39.33 percent, which is the last CPI (average 12 months).

-Is there a limit on the rate of rent increase for workplaces?
The regulation has consequences only in terms of residential rents, and workplaces are excluded from the scope. In this case, in terms of workplace rents, the rule of increase in the CPI rate will be applied as regulated by Article 344 of the Turkish Code of Obligations.

Gökşen SAĞMAN, Legal Intern
Koray ATEŞ, Legal Intern