Will the removal of the 25 percent rent cap affect existing lawsuits?

The Turkish Code of Obligations had introduced a 25 percent rent increase cap for residential rentals with a temporary article added on June 8, 2022.

This practice will be lifted as of July 1, 2024, and rent increases will be calculated based on the CPI rates of the last 12 months. Rent determination lawsuits filed by property owners before July 1 will not be affected by this situation.

Lawyer and Mediator Dr. Umut Metin stated that the removal of the 25 percent rent cap would not affect rent determination lawsuits filed before July 1.

Metin stated, "Existing rent determination lawsuits have no connection to the removal of the 25 percent rent cap. In existing lawsuits, rent determinations will be set according to comparable properties in the region."

Providing explanations regarding the removal of the 25 percent rent increase cap, Lawyer and Mediator Umut Metin said, "Existing rent determination lawsuits have no connection to the 25 percent regulation. It was announced that the 25 percent rent cap would be lifted after July 1. In the new period, increases will be made according to CPI rates. There should not be a perception that property owners can increase rent by any rate they desire. In rental contracts to be renewed after July 1, the increase rate will be based on the CPI figures of the last 12 months. If a 25 percent increase was applied in the past 2 years, an increase cannot be made in the new period by adding the differences from the past 2 years to the CPI figures."

"NEW RENTAL CONTRACTS ARE MADE ACCORDING TO THE MAXIMUM 12-MONTH CPI AVERAGE"

Stating that rent increase rates cannot be above the 12-month average inflation rate, Metin said, "New rental contracts are made according to the maximum 12-month CPI average. Different increase rates may have been agreed upon in contracts. In such cases, if the increase rate in the contract is below the CPI, the rate in the agreed contract is valid. If the rate in the contract has exceeded the CPI, the CPI rates are valid."

"RETROACTIVE RENT DIFFERENCE IS PAID TO THE PROPERTY OWNER"

Metin said that the retroactive difference of the rent amount ruled by the judge in rent determination lawsuits will be paid by the tenant to the property owner.

Metin stated, "When there are rent determination lawsuits, the cases can take a long time. Rent determination lawsuits are the determination of the property's price by the judge according to its comparables. If the parties could not reach an agreement with a mediator before the lawsuit, the judge's decision is awaited during the lawsuit process. If the rent was low during the lawsuit process and the judge has ruled for a higher rent, the tenant is obliged to pay the retroactive rent. The longer the lawsuit lasts, the tenant pays the difference between the rent ruled by the judge and the pre-lawsuit rent without interest. In our society, solving problems before a lawsuit by practicing empathy is an opportunity. Mediation makes these opportunities possible and serves social peace."

News Source: İHA