WHAT CAN BE DONE LEGALLY IN THE CASE OF EXORBITANT RENT INCREASE IN TURKEY?

CAN A LANDLORD BE PENALIZED DUE TO RACK RENT IN TURKEY?

As of July 1, 2024, rent increases for residential leases in Turkey are limited to 25%. After this date, for renewed lease agreements, rent increases exceeding the TÜFE (Consumer Price Index) rate will not be legally allowed. If the landlord requests a rent increase in Turkey beyond the legal limits, the tenant is only obligated to pay within the legal boundaries.

If the landlord unlawfully demands an excessive rent increase in Turkey, the tenant has the right to pursue legal remedies:

• Objecting through a notarized notice: The tenant must object in writing to the landlord’s unjust rent increase request and notify the landlord that the request is invalid. Otherwise, remaining silent may be considered as tacit acceptance.
• Objecting when enforcement proceedings are initiated: If the landlord starts enforcement proceedings to collect the unjustified high rent, the tenant has the right to object to the enforcement within the legal time frame.
• Objecting when an eviction lawsuit is filed: If the landlord files an eviction lawsuit to remove a tenant who does not accept the excessive rent increase in Turkey, the tenant can defend themselves in the lawsuit and object.
• Filing a negative declaratory action: If the landlord claims that the tenant owes money due to exceeding the legal rent increase limit, the tenant can file a negative declaratory action to prove they do not owe the debt.
• Seeking mediation: In rental disputes, mediation is mandatory before filing a lawsuit in Turkey. If a tenant has a dispute with the landlord due to an excessive rent increase in Turkey, they can seek mediation process before proceeding with legal action. If an agreement cannot be reached, the tenant can proceed with filing a lawsuit.

However, imposing an excessive rent increase in Turkey does not carry criminal penalties. In Turkish law, this is treated as a matter of private law, and the landlord is not subject to criminal liability. Therefore, tenants cannot file a criminal complaint with the prosecutor’s office, and the landlord will not face criminal penalties for requesting a high rent increase in Turkey.

Tenants should use legal avenues effectively to protect their rights, especially by documenting their objections with written evidence and defending their rights within legal limits.

In such a case, the tenant can exercise their legal rights by requesting the highest allowable rent increase according to the law. In case of disputes, the tenant will continue paying rent based on the legal rent increase rates.

CAN RENT PAYMENTS MADE ABOVE THE LEGAL LIMIT BE RECLAIMED FROM THE LANDLORD?

Between 08.06.2022 and 01.07.2024, according to the legal regulations in force, rent increases for residential leases exceeding 25% are prohibited by law. Despite this ban, rent increases exceeding 25% between the parties are invalid, as they violate the mandatory provisions of the Turkish Code of Obligations (TCO). As explicitly stated in Article 2 of the TCO, “Contracts made exceeding these rates are invalid in terms of the excess amount.”  Therefore, the main legal basis for requests to refund rent payments exceeding the 25% increase limit is the aforementioned mandatory provision of the Law.

Although it is possible to request a refund of overpaid rent in Turkey, in some cases, this demand may be considered as an abuse of rights. In such cases, the claim of abuse of rights must be assessed by the judge within the context of the specific circumstances of the case under Real Estate Law in Turkey. However, it is difficult to consider the application of a mandatory provision of law as an abuse of rights. Article 27 of the TCO includes the rule that “Contracts contrary to the mandatory provisions of the law, morality, public order, or personal rights, or impossible in subject, are null and void.” In this context, all oral or written, explicit or implied agreements for rents exceeding 25% are invalid.

Nevertheless, until 01.07.2024, in practice, landlords and tenants have made rent increases exceeding 25% in Turkey. The agreements made between the parties are considered invalid due to exceeding the legal limits. Since this issue is still recent, there is no definitive case law yet. However, from a legal perspective, the theoretical and legal grounds for a refund request are strong. In this context, payments made for residential rents exceeding the 25% rent increase limit between 08.06.2022 and 01.07.2024 may be requested for a refund within the statute of limitations. Since the contracts exceeding the provisions of the Law are invalid, the performances made under them must be refunded under the principles of unjust enrichment.

On the other hand, some legal experts argue that the refund of overpaid rent in Turkey can be considered under the prohibition of contradictory behavior and the principle of good faith. According to Article 2 of the Turkish Civil Code, everyone must act in good faith when exercising their rights and fulfilling their obligations. In this context, both making an overpayment and requesting its refund may be considered contradictory behavior. According to this view, in cases of abuse of rights, it may not be possible for the tenant to request the refund of the overpaid amount.

On the other hand, according to the Supreme Court’s precedents, rent payments exceeding the TÜFE (Consumer Price Index) rate are not considered unjust enrichment. Instead, the refund of the overpaid rent may be requested within the framework of contractual obligations. In this case, the statute of limitations for monthly rent payments will be 5 years, and for yearly rent payments, it will be 10 years.

If the lessor sends a notice of rent increase to the tenant or files a lawsuit, and the tenant makes payments according to the increase rate, it will be considered as tacit acceptance of the offer. In such a case, the tenant’s request for a refund of the excess rent paid after the notice may be rejected. Moreover, any statements made by the tenant regarding the rent amount in front of official authorities or in court will be binding, and the opportunity to request the refund of overpaid rent will be eliminated. Therefore, it is important for the tenant to make excess rent payments with a reservation and seek the support of a real estate lawyer for legal security.

HOW MUCH RENT INCREASE CAN BE APPLIED TO A TENANT WHO HAS COMPLETED 5 YEARS IN TURKEY?

The topic of increasing the rent for a tenant who has completed five years is significant in Turkish law. In Turkey, for lease agreements longer than five years or renewed after five years, and every five years thereafter, the new rent amount is determined based on factors such as the consumer price index (TÜFE), comparable rental rates, and the condition of the rented property. The process must follow local legal regulations, and the rent increase for a tenant who has completed five years should adhere to the terms and rates specified in the lease agreement.

If the parties cannot reach an agreement, the landlord can file a rent determination lawsuit to have the rent amount adjusted according to current conditions.

The legal basis for rent determination lawsuits is found in Article 344 of the Turkish Code of Obligations. These regulations play a crucial role in ensuring a fair and balanced rent amount in the relationships between tenants and landlords. By adhering to the laws and the lease agreement, both the tenant and the landlord can prevent rent disputes and maintain a stable relationship.

THINGS TO CONSIDER FOR RENTAL PRICE INCREASE PROCESS IN TURKEY

Rental price increases are made in accordance with the terms of the lease agreement. If there is an agreement, this provision applies. If the parties have determined the rent amount by agreement, any increase is also made according to the agreement. For renewed lease periods, the agreed rent amount between the parties is valid, provided that it does not exceed the twelve-month average change rate in the consumer price index of the previous rental year (TBK Article 344/1).

If there is a provision in the contract regarding rent increase for the new lease period, the rent amount determined by the court in a lawsuit to be filed until the end of the new lease period is also effective from the beginning of the new period (TBK Article 344/2).

If there is no agreement between the parties on how the rent amount will be renewed, a rent determination lawsuit can be filed. In this case, the rent amount is determined fairly, taking into account the condition of the rented property and not exceeding the twelve-month average change rate in the consumer price index of the previous rental year (TBK Article 344/2).

For tenants who have completed five years in their contracts or for lease agreements renewed after five years, and every subsequent five years, the rent amount to be applied in the new rental year is determined fairly, considering the twelve-month average change rate in the consumer price index, the condition of the rented property, and comparable rental rates (TBK Article 344/3).

Some points to consider regarding rent increases are as follows:

• Rent increases should be made in accordance with the specified durations in the lease agreement:

According to the Turkish Code of Obligations, the rent can be increased once a year. However, the increase rate should not exceed the period specified in the lease agreement. For example, if the increase rate is specified as 10% in the agreement, the landlord can increase the rent by 10% once a year.

• An official document should be issued for rent increase:

The landlord should issue an official document to the tenant for the rent increase, specifying the increase rate, increase dates, old and new rent amounts, and other relevant information. This document is important to prevent rent disputes in Turkey between the parties and to prevent excessive rent increases.

• Rent increases should not exceed the TÜFE rate:

Rental price increases in Turkey should not exceed the rate determined by the Turkish Statistical Institute (TÜİK). This rate serves as the upper limit for rent increases in Turkey. Increases exceeding the TÜFE rate are illegal and considered unjust rent increases.

• The rent increase rate should be reasonable:

The rent increase rate in Turkey should be reasonable and fair. If the landlord wishes to increase the rent significantly, the tenant has the right to object to rent increase in Turkey

• Legal recourse in case of rent disputes between the parties:

In case of rent disputes regarding exorbitant rent increase in Turkey, a rent determination lawsuit can be filed. In this lawsuit, the court determines the rent amount and resolves the dispute between the parties.

RENT INCREASE IN LEASE AGREEMENTS INVOLVING FOREIGNERS IN TURKEY

When a lease agreement is subject to a property located within the borders of Turkey, Turkish law applies regardless of the nationality of the parties. Therefore, whether the landlord or the tenant is a foreign national does not create any difference regarding rent increases or other contractual provisions, and Foreigners Law is not applied. The Turkish Code of Obligations (TCO) and relevant legislation directly apply to these types of agreements, and the rent increase rates cannot exceed the limits set within the legal framework.

In recent years, there has been a significant increase in the rate at which foreigners acquire real estate in Turkey. Foreign nationals who are legally unable to own property have resorted to establishing companies in Turkey to become property owners. These developments have also led to an increase in legal disputes regarding lease agreements involving foreign parties.

According to Turkish law, foreigners are also subject to Turkish legislation regarding their real estate holdings in Turkey, including mortgage, pledge rights, lease relationships, and other real estate transactions. In this context, rent increases in lease agreements involving foreigners must be made within the legal limits established by the TCO. The parties are obligated to act in accordance with the legislation, and failure to do so may result in legal disputes.

THE IMPORTANCE OF GETTING LEGAL SUPPORT FOR EXORBITANT RENT INCREASE IN TURKEY

In recent years, increasing rent prices in Turkey have become a significant financial burden for tenants. Particularly, when excessive rent increases in Turkey fall outside the legal limits set within the legal framework, they may lead to tenant grievances. Getting legal support in cases of exorbitant rent increases is crucial for tenants. Tenants can protect their rights situation of high rent increase in Turkey by seeking legal assistance.

A lawyer specializing in rental law in Turkey can evaluate whether the increase rates specified in the lease agreement are in compliance with legal regulations and guide the tenant accordingly. The lawyer will take necessary legal actions against unlawful rent increases and develop strategies to protect the tenant’s rights. Additionally, in disputes regarding the determination of rent, the lawyer can represent the tenant in negotiations or legal proceedings, ensuring legal security.

Disputes arising from rental relationships may lead to judicial processes aimed at protecting the rights of the parties and producing fair solutions. Courts evaluate whether rent increases have been determined within the legal framework and provide resolutions for disputes. In this process, working with an experienced lawyer helps ensure the case is handled efficiently and without loss of rights.

Getting professional legal support against exorbitant rent increases in Turkey helps protect the tenant’s rights and minimizes potential legal risks. Therefore, consulting a lawyer specializing in rental law is a critical step in ensuring lease agreements are carried out in accordance with the law.