The applicable rent increase rate for the renewed rental period in terms of lease agreements is limited to 25% (twenty-five percent) as per the temporary article added to the Turkish Code of Obligations No. 6098 with the Law on the Amendment of the Turkish Code of Obligations and the Attorneyship Law [“ Amendment Law”]. The Amendment Law was published in the Official Gazette on 11 June 2022 and entered into force on the same date.
This amendment applies to lease agreements that are signed for at least one year. Under Turkish law, if a lease agreement is concluded for a term of one year or more, it is deemed to be renewed for one-year periods upon the expiry of the agreed term. Accordingly, the rent increase for the renewed period in lease agreements cannot exceed 25% of the previous year's rental price. On the other hand, if the change rate in the consumer price index for the preceding rental year's twelve-month averages are lower compared to the 25% limit introduced with the Amendment Law, this lower rate will apply.
This limitation merely applies to lease agreements for housing; while the change rate calculated using twelve-month averages in the consumer price index will continue to apply as a limit in renewal rental terms for roofed workplaces, even if it exceeds 25%.
The rent increase limitation brought by the Amendment Law is valid until 1 July 2023, and the rent increases made prior to the effective date, i.e., before June 11, 2022, will not be affected by the new regulation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
