As is well known, a maximum rent increase rate of 25% was introduced for residential lease agreements during the pandemic period. With the expiration of this maximum increase rate on July 1, 2024, landlords and tenants are now concerned about the fate of lease agreements renewed on July 1, 2024, or whether all agreements can be subject to an increase from July 2, 2024, onwards.
Firstly, if we look at the basis of the regulations, the Law No. 7409 on Amending the Attorneyship Law and the Turkish Code of Obligations, published in the Official Gazette dated June 11, 2022, and numbered 31863, introduced a temporary article to the Turkish Code of Obligations No. 6098 (“TCO”). This temporary article stipulated that the maximum rent increase rate for residential leases renewed between June 11, 2022, and July 1, 2023, would be 25%.[1]
Subsequently, with the Law No. 7456 on the Introduction of Additional Motor Vehicle Tax to Compensate for Economic Losses Caused by the Earthquakes of February 6, 2023, and Amendments to Some Laws and Decree Law No. 375, published in the Official Gazette dated July 15, 2023, and numbered 32249, this period was extended until July 1, 2024. According to the relevant article, “Agreements regarding the rent amount for residential leases renewed between 2/7/2023 and 1/7/2024 (inclusive) shall be valid provided that they do not exceed twenty-five percent of the previous year’s rent. If the rate of change in the twelve-month average of the consumer price index for the previous rental year is below twenty-five percent, the rate of change shall apply.” [2]
As seen from the above article, this period for residential leases has been extended until July 1, 2024, and it is explicitly stated that July 1, 2024, is included in this regulation. Therefore, lease agreements renewed on July 1, 2024, will still be subject to the maximum increase rate of 25%, while agreements after this date will no longer apply this rate and will be subject to the increase under Article 344 of the TCO. According to this article, the parties’ agreement on the rent amount for renewed lease periods shall be valid provided that it does not exceed the rate of change in the “twelve-month average of the consumer price index” for the previous rental year. Therefore, the removal of the maximum 25% rent increase regulation does not mean that rent increases will be applied to lease agreements as of July 2; it means that increases will be applied in accordance with Article 344 of the TCO upon the renewal dates of the lease agreements.
[1] https://www.resmigazete.gov.tr/eskiler/2022/06/20220611-1.htm
[2] https://www.resmigazete.gov.tr/eskiler/2023/07/20230715-2.htm