Annual Rent Increases are now capped at 25% in Residential  Leases

Annual Rent Increases are now capped at 25% in Residential  Leases

Within the scope of the temporary Article 1 added to the Turkish Code of Obligations as published on the Official Gazette dated 11 June 2022 and numbered 31863, annual rent increases for residential properties are capped for the period starting from 11 June 2022 and ending on 1 July 2023.

Accordingly, agreements for rent increases during renewed lease periods between 11 June 2022 (effective date) and 1 July 2023 (including this date) will be valid provided they do not exceed 25% of the previous year’s rent. However, if the 12-months average of the change in the consumer price index for the previous lease period is lower than 25%, then the lower rate shall be applied for rent increases. This new rule will also be binding for lease agreements concluded for more than one year.

In this context, it is regulated that the increase rates applicable to rents in residential lease agreements that are renewed between 11 June 2022 and 1 July 2023 at the end of their respective lease terms or have entered a new period within their respective lease terms, cannot exceed 25% of the rent of the previous year. If the annual average of the consumer price index is lower than 25%, then the lower consumer price index rate will apply.