Memo on Rent Increase Rate

Former Turkish Code of Obligations had set no limit for the rent increase rate. Freedom of contract principle had governed the contracts made by parties so the parties were free to decide the rent increase rate. However with the 6098 numbered Turkish Code of Obligations (TCO) an upper limit has been set to the rent increase rate.

Related article is as follows: “If no agreement was made by parties on this matter, rent is set by the judge on condition that it does not exceed producer price indexes (PPI) increase rate, by taking tenant’s condition in consideration according to equity.”

According to mentioned 1st paragraph of TCO Art.344 rent increase rate is limited with PPI in tenancy agreements. This article is effective since 01.07.2012 for dwellings but for the workplaces effective date has been pushed to 01.07.2020. According to Supreme Court application, due to the fact that  rent increase rate is PPI calculated by the average of 12 months, for the cases that have no special provision the rent increase rate for May 2016 is %5.19