Can Landlords Increase Rents by 100% When the 25% Rent Cap Ends?

With the rent cap of 25% not being extended, tenants are concerned about potential rent hikes. However, lawyer Ali Onar assures that landlords cannot arbitrarily impose excessive increases. Onar explained that the maximum rent increase would be based on the annual inflation average, as before, meaning increases of 100% or 200% are not possible.

The 25% rent increase cap is expected to end in July 2024. The possible end of this cap has raised concerns among some citizens about whether landlords might impose exorbitant rent hikes.

Lawyer Ali Onar from İzmir discussed what tenants could expect with the removal of the 25% cap. He emphasized that there was no need for tenants to panic and that landlords could not impose arbitrary increases.

Increases will be made according to inflation rates as before

Onar explained that the ceiling rate for rent increases was stipulated in the Code of Obligations and would be determined by the average annual inflation rate (CPI). He stated:

“A temporary provision in the Code of Obligations sets the rent ceiling increase rate at 25%. If no legal regulation is made, this 25% cap will end in July 2024. Essentially, our Code of Obligations has a ‘ceiling application’ for determining rent amounts. What does this mean? To establish a balance and determine a reasonable rent amount, the Code of Obligations provides a rate of increase for rents; in common terms, it will be based on the 12-month average inflation rate. For a tenant whose lease expires in July, the first criterion will be this 12-month average if there is no clause in the lease agreement. It is expected to be around 70.9%. This limit cannot be exceeded.”

“Even if Parties Agree on a Rate, the Agreement Will Not Be Valid”

Ali Onar highlighted that if no increase rate were specified between the parties, it would still be determined based on the 12-month average inflation rate. He noted that in potential disputes between tenants and landlords, the inflation rate would be considered.

“The monthly and annual inflation rates announced by the Central Bank will determine the rent amount. If the 12-month average for July 2024 is announced as 79%, the rent ceiling can be increased by up to 79%. Even if the parties agree on a different rate of increase, this agreement will not be valid. In any legal dispute, the court will consider the ceiling rate. The law aims to maintain a reasonable balance between the tenant and the landlord,” he said.

“No Ceiling for Contracts Exceeding 5 Years”

Addressing rental contracts of five years or more, Ali Onar stated, “For contracts exceeding five years, such a ceiling does not apply. Therefore, after five years, the rent can be increased without considering the ceiling. This situation, of course, benefits the landlord.”

He continued: “Landlords cannot impose arbitrary increases. They cannot increase rents by 100% or 200%. Even if such a clause is included in the lease, it is not valid. A ceiling rate has been set, and any increases exceeding this are invalid. Thus, tenants are protected. If the tenant resorts to legal means, they can demand the application of the legally stipulated increase rate.”

Ali Onar also advised that rents should be paid through banks, with the explanation “rent” noted in the transaction.