The Start Of A New Era: Rental Rate Increases

The significant amendments have been made in the Turkish Code of Obligations no. 6098 with regard to the provisions on the rental rent increases through The Law published in the Official Gazette No. 30659 on 18.01.2019. Henceforward, the rental rate for the renewal period regarding the lease agreements for more than one year do not exceed the rate of twelve-month average percentage change in consumer price index.

The lease amount may be determined by the court on the basis of the abovementioned rules and principles in case of any dispute between the Parties or where no written agreement was concluded.  However, at the end of the five-year period for long-term rental (more than five years) or lease agreements renewed after five years, the court is able to determine the rental rate increase considering the rate of twelve-month average percentage change in consumer price index, in addition to the rental status and imputed rental incomes on an equitable basis.

Moreover, if the rent is fixed in a foreign currency by the parties, the rent may be amended and determined after five years have passed without prejudice to the provisions of the Law regarding the Protection of the Value of Turkish Currency no. 1567. However, the provisions of Article 138 of the Turkish Code of Obligations with regard to the undue hardship rule are reserved. After five years, the rent is determined on the basis of the above principles considering the rate of twelve-month average percentage change in consumer price index, by the Parties or the court in case of any dispute between the Parties, taking into account the changes in the value of foreign currency.

These provisions shall be valid for the residential lease agreements as of 1/1/2019 and for the office lease agreements as of 01/07/2020. As of the dates stated herein, the “producer price index” shall not be taken into consideration in the rental rate increases.

CELIKBAS LAW OFFICE

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