Court rules that the 25 percent cap on rent increases in line with economic conditions is not fair

According to the report by Ökkeş Taşkın from Gerçek Gündem, a tenant who rented a house in Istanbul's Eyüpsultan district in 2019 updated their rent in 2021 based on annual legal increase rates.

However, the landlord took the matter to court, stating that the increase made by the tenant within 'legal limits' remained below the current market rental rates of comparable properties within the same complex.

In the case, the local court rejected the landlord's application for a rent adjustment increase. Following this decision, the landlord appealed the case.

Reviewing the file, the 54th Civil Chamber of the Istanbul Regional Court of Justice disagreed with the local court's decision and ruled that "the 25 percent cap imposed on rent increases in proportion to the extraordinary economic conditions experienced in our country is not fair."

The decision included the following statements:

"It has been stated that, depending on the specifics of each individual case, the current status of the property for which an adjustment is requested must be taken into account; that the rules to be applied in adjustment cases by the local court must be set out one by one as specified; and that a decision must be reached based on the outcome of a report obtained from a three-person expert panel, which investigates and evaluates all these data, the nature of the leased property, its usage area, location, zoning and commercial changes above the norm that would affect rental prices in the region, comparable rental prices, increases in tax and depreciation expenses, sudden and extreme fluctuations in exchange rates, and the existence of events requiring the reorganization of payment principles due to serious economic crises or natural disasters shaking the country, in order to establish a judgment in accordance with equity."

Evaluating the decision, lawyer Özgür Kip said, "If the conditions of the case are met in a rent dispute due to the economic conditions the country is in—that is, extraordinary situations such as inflation, exchange rates, and natural disasters—this decision sets a precedent. If these conditions have been met in a rent adjustment, the 25 percent rent cap is not currently applied. In other words, with this decision, the court has bypassed the 25 percent rent cap," he said.