rack rent in turkey

WHAT ARE THE LEGAL OPTIONS IN CASE OF RACK RENT IN TURKEY?

The rental price of a property is determined according to the contract between the landlord and the tenant, and this contract establishes an agreement between the parties. Although the maximum rental price increase rate is determined by the state through laws and other legal regulations, landlords demand rack rent increases from their tenants due to high inflation rates.

This situation can create financial difficulties for the tenant, and legal solutions can be sought. Rack rent is a major problem for tenants, and it is possible to find a solution to this problem through legal means. In this article, we will discuss the legal measures that can be taken against exorbitant rent increases.

CAN THE LANDLORD DEMAND RENTAL PRICE INCREASE MORE THAN THE RATE OF INFLATION?

Rack rent and exorbitant rent increase are an increase in the current rental price to an unreasonably high level according to market conditions. This situation usually arises when the landlord increases the rental price while the tenant’s current contract is still valid.

In Turkey, landlords must consider the 12-month average Consumer Price Index (CPI) rate announced by the Turkish Statistical Institute (TurkStat) before making any rent increases. Increasing the rental price by the CPI rate is the landlord’s legal right. However, the landlord cannot force the tenant to accept a rental price increase above the rate of inflation. Rental price increases above the rate of inflation are valid only with the tenant’s approval.

TEMPORARY REGULATION ON LIMITING RENT INCREASES TO 25% IN TURKEY

The price increases applied to rental houses in Turkey have reached quite high levels, especially in recent years. This situation creates a serious financial burden for tenants, and the idea that the rate of increase in rent prices needs to be limited has emerged. Therefore, it has been decided to temporarily limit rent increases to 25% in Turkey.

According to this regulation, the rate of increase in rent prices is limited to a maximum of 25%. This practice aims to prevent tenants from being disadvantaged. However, limiting rent increases has also brought some negative effects.

Firstly, limiting rent increases may cause a decrease in landlords’ incomes. Therefore, landlords may be inclined to sell rental properties instead of raising rent prices. This situation can create an imbalance between supply and demand in the housing market.

Another negative effect is the decrease in the supply of rental properties. Landlords being restricted to a rental price limit that tenants can afford can lead to a decrease in the supply of rental properties. In this case, finding affordable rental properties for tenants can become even more difficult.

In conclusion, the temporary regulation on limiting rent increases to 25% in Turkey is an application that was considered to protect tenants. However, it has also brought some negative effects. Therefore, further research should be done on the subject, and the opinions of all parties should be taken into account to find the most appropriate solution.

WHERE CAN A LANDLORD WHO DEMANDS RENT INCREASE MORE THAN TURKISH INFLATION INDEX BE REPORTED?

In many countries, landlords can increase rents by a certain percentage based on the annual inflation rate. However, this rate can vary depending on the country and state, and may not always be applicable. Therefore, before increasing the rent amount, the landlord should review the current legal regulations in the country and comply with the conditions specified in the lease agreement.

In addition, requesting a rack rent increase in rent beyond the periods and rate of increase specified in the rack rent lease agreement is not legally acceptable from the tenant’s point of view. In other words, the landlord cannot increase the rent amount as he/she wishes, and must comply with certain legal regulations and contract terms when rental price increase.

Tenants who are faced with a landlord demanding exorbitant rent increase beyond legal regulations or CPI can consult a lawyer to learn whether the periods and rate of increase specified in the rack rent lease agreement are legal, or they can seek their rights by applying to local rental commissions.

It should be noted that in Turkey, there is no need to report a landlord who demands rack rent increase to any authority under current legal regulations. This is because excessive rent increase will not be valid unless accepted by the tenant. If the landlord insists on exorbitant rent increase, the first legal action that can be taken for this request is for the tenant to object to the landlord in writing. In this letter, the tenant should state that he/she does not accept the rack rent increase, and that the demand for excessive rent increase is not legally acceptable. Both the Turkish Civil Code and other legal regulations have clearly regulated the rate of increase for residential rents.

In summary, if a landlord has a request for rack rent increase due to market conditions or inflation, he/she can use this right by filing a lawsuit. However, the right to file a lawsuit can only be exercised by proving the existence of the conditions specified in the laws and complying with the deadlines specified in the law.

Article 344 of the Turkish Code of Obligations – Agreements regarding the rental fee to be applied in renewed rental periods are valid, provided that they do not exceed the rate of change in the twelve-month average of the consumer price index in the previous rental year. This rule also applies to rental agreements lasting more than one year.

HOW MUCH RENTAL PRICE INCREASE CAN BE MADE TO A TENANT WHO HAS COMPLETED 5 YEARS?

The question of how much the rent can be increased for a tenant who has completed 5 years is frequently asked. In Turkey, in lease agreements that last longer than five years or are renewed after five years, and every five years thereafter, the new rental amount is determined based on factors such as the consumer price index, comparable rental rates, and the condition of the rented property. Therefore, landlords should act in accordance with the periods and increase rates specified in the lease agreement for tenants who have completed 5 years and comply with local legal regulations.

In cases where no agreement is made between the parties, the landlord can file a lawsuit for rent determination hearing for the tenant who has completed 5 years in order to determine the rental fee according to current conditions. The legal basis of rent determination lawsuits is stated in Article 344 of the Turkish Code of Obligations.

rack rent lease

WHAT IS A RENT DETERMINATION HEARING?

A rent determination hearing is a lawsuit filed through the court to determine the rental fee in disputes between the tenant and the landlord. This lawsuit is usually filed when the tenant does not accept the landlord’s demand for an rack rent lease or when there is a dispute over the rental fee.

The rent determination hearing is a lawsuit filed by the tenant or landlord regarding an increase or decrease in the rental fee. Considering factors such as the condition of the rented property, comparable rental rates, and the rate of increase in the consumer price index, a fair rental fee is determined by the court.

In a rent determination lawsuit, the court is applied to determine the rental fee and to help resolve the dispute between the parties. The procedures related to the lawsuit may vary depending on the country and region, but generally, the party filing the lawsuit must explain the amount and reasons for the rental fee determined.

The tenant or landlord who files the lawsuit usually presents evidence in court and makes a statement about why the rental fee should be determined in a certain way. The court evaluates the evidence and statements, determines a fair rental fee, and resolves the dispute between the parties.

A rent determination hearing filed based on the second paragraph of Article 344 of the Turkish Code of Obligations can be used when the tenant requests a rent reduction or when the landlord increases the rent.

The third paragraph of Turkish Code of Obligations states that a lawsuit can be filed for the determination of rent for the sixth year and beyond regarding lease agreements that last longer than five years or are renewed after five years.

The fourth paragraph states that a rent determination lawsuit can be filed to determine the market rental fee to be applied between the parties for the period after five years in lease agreements where the rental fee is determined in foreign currency.

A rent determination hearing is an important tool for regulating the relationship between the tenant and the landlord and helping to resolve disputes in a fair manner. However, it also has disadvantages such as court costs and time loss.

HOW CAN RENTAL DISPUTES BE PROVEN IN RENT DETERMINATION HEARING?

In rent determination lawsuits, the plaintiff is responsible for proving the existence of the rental relationship. If there is no written or official contract, the admission or oath evidence of the other party is required. After the rental relationship is proven, the current rental amount must also be proven.

When determining the new rent amount, the change rate in the consumer price index should be taken into account. According to the Turkish Code of Obligations, the judge must determine the new rent amount by not exceeding the change rate in the average of the consumer price index of the previous rental year, subject to the specific circumstances stated in the case.

A rent determination lawsuit is filed to determine the rental amount fairly in rental disputes between tenants and landlords. Providing evidence is crucial in determining the rental amount.

Ways to provide evidence in a rent determination lawsuit against a tenant who has completed five years:

  • Rental contract: The most important evidence in rent determination lawsuits is the rental contract. If the rental amount specified in the rental contract is considered fair by the court, the case will be decided in favor of the party who filed the case.
  • Rental market research: The tenant or landlord can conduct rental market research to prove whether the rental amount is in line with market conditions. By researching the rental amounts of similar rental properties in the region, it can be proven that the rental amount is in line with market conditions and not a rack rent lease.
  • Evidence of rental price increase: The landlord must prove the reasons for increasing the rental amount. Among the reasons for increasing the rental amount may be property maintenance and repair expenses, tax increases, insurance expenses, water and electricity fees. These reasons can be documented to prove that it is necessary to increase the rental amount and it is not a rack rent lease.
  • Condition of the rented property: The tenant can submit photos or videos of the rental property to the court to prove that the condition of the rental property can affect the rental amount. Factors such as the age of the property, the need for maintenance and repair, the size and features of the property, and the regional location of the property can affect the rental amount, so these evidence can also be used in the lawsuit.
  • Expert opinions: The parties can also present the opinions of experts for the evaluation of the properties to the court. These experts can be real estate agents, real estate appraisal experts, architects, civil engineers, lawyers, etc.

In addition to these methods, the court determines a fair rental amount by evaluating the evidence and resolves the dispute between the parties in the rent determination hearing.

WHEN CAN A LAWSUIT FOR RENT DETERMINATION BE FILED?

There is no specific time limit specified in the law for filing a rent determination lawsuit, and it can be filed at any time. (Turkish Civil Code Article 345/1) The decision rendered generally has a forward effect and is applied for the period after the date of the lawsuit. However, regulations have been made for situations where a new rent amount can be requested in the new rental period.

If the lessor has made a written notification that the rent amount will be increased at least thirty days before, or if the lawsuit has been filed within this period, the rent amount determined by the court in the lawsuit filed until the end of the new rental period binds the tenant from the beginning of the new rental period.

If the contract includes a provision that the rent amount will be increased in the new rental period, the rent amount determined by the court in the lawsuit filed until the end of the new period is also valid from the beginning of the new period. (Turkish Civil Code Article 345/2)

These time limits are important to protect the rights of the parties and to avoid delays in resolving disputes. However, even if the time limits have passed, a rent determination lawsuit can still be filed and the judge will make a fair decision by evaluating the evidence.

rental price increase

WHAT TO CONSIDER IN RENTAL PRICE INCREASES

Rental price increases are made according to the provisions of the contract. If there is an agreement, this provision is applied. If the parties have determined the rental price through an agreement, the increase is also made according to the agreement. The agreed rental fee for renewed rental periods is valid, provided that it does not exceed the rate of change in the twelve-month averages of the consumer price index in the previous rental year. (Article 344/1 of the Turkish Civil Code)

If there is a provision in the contract regarding the increase in rent for the new rental period, the rental fee to be determined by the court in the lawsuit to be opened until the end of the new rental period is also valid as of the beginning of the new period. (Article 344/2 of the Turkish Civil Code)

If there is no agreement between the parties on the method of renewal of the rental price increase, a lawsuit for determination of the rental price can be opened. In this case, the rental fee is determined in a fair manner, taking into account the condition of the rented property, provided that it does not exceed the rate of change in the twelve-month averages of the consumer price index in the previous rental year. (Article 344/2 of the Turkish Civil Code)

For tenants whose contracts have been in effect for five years or more, and for lease agreements renewed after five years, and every five years thereafter, the rental fee to be applied in the new rental year is determined in a fair manner, taking into account the rate of change in the twelve-month averages of the consumer price index, the condition of the rented property, and comparable rental fees. (Article 344/3 of the Turkish Civil Code)

Some points to consider regarding rental price increases are:

  • The periods specified in the rental contract should be taken into account when making increases:

According to the Turkish Civil Code, the rental fee can be increased once a year. However, the rate of increase should not exceed the period specified in the rental contract. For example, if the increase rate is determined as 10 percent in the contract, the landlord can increase the rental fee by 10 percent once a year.

  • A formal document should be issued for rental price increases:

A formal document should be issued by the landlord to the tenant for rental price increases, and information such as the rate of increase, the dates of increase, and the old and new rental fees should be specified. This document is important in preventing disputes between the parties and preventing excessive rental price increases.

  • The rental increase should not exceed the rate of inflation:

The rental increase should not exceed the Consumer Price Index (CPI) rate determined by the Turkish Statistical Institute. This rate is used as an upper limit in rental price increases. Rental increases that exceed the CPI rate are illegal.

  • The rental increase rate should be reasonable:

The rental increase rate should be reasonable and fair. When the landlord wants to exorbitant rent increase, the tenant has the right to refuse such rack rent increases.

  • Legal remedies can be sought if there is a dispute between the parties:

If there is a dispute between the parties regarding rack rent lease, a lawsuit for rental determination can be opened. In this lawsuit, the court determines the rental fee and resolves the dispute between the parties.

IMPORTANCE OF GETTING LEGAL SUPPORT FROM A LAWYER IN CASE OF RACK RENT LEASE

Exorbitant rent increases can create a serious financial burden for tenants. Tenants can protect their rights by seeking legal support in such cases.

Lawyer support can help tenants learn how to legally fight against rack rent lease. Tenants’ lawyers can check whether the increase rate specified in the lease agreement is within legal limits. In addition, in case of a dispute over rent increases, they can encourage tenants to file a rent determination lawsuit.

A rent determination hearing is a case filed by the tenant to protect their legal rights. In this case, the court carries out the necessary procedures to determine the rent fairly. Tenants’ lawyers defend tenants’ rights in rent determination lawsuits and fight for a result in favor of the tenant.

Getting legal support from a rental lawyer in Turkey in case of exorbitant rent increases can help tenants protect their rights and avoid possible legal problems.

You can review our other articles here and contact info@cbhukuk.com for your legal support request.

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