Millions of homeowners and tenants are on the agenda of the 25 percent limit on rent. A clear statement on the latest situation regarding the 25 percent limit in rent came from Treasury and Finance Minister Mehmet Şimşek. Thus, it became clear that the increase limit will end and the new period will start as of July 2. So, what are the details of the new period in rent?
Treasury and Finance Minister Mehmet Şimşek made important statements about the economic agenda in a program he attended recently. Stating that there is no reason for the 25 percent increase limit in rents to continue, Şimşek said, “I see no reason for the 25 percent limit in rent to continue, it will most likely not continue. Credit pricing should also not be interfered with.” These statements are closely followed by millions of homeowners and tenants. So, how will the new period affect landlords and tenants?
Expiration of the 25 percent increase limit
Will landlords raise prices when the 25 percent increase limit expires?
According to Hürriyet, the 25 percent increase limit will expire on July 2, but not all landlords will raise the rent on this date. Rent increases are made ‘once a year’ and ‘during the contract renewal period’. For example, if the contract renewal period is January, the increase will be expected in January 2025.
Does the lifting of the cap mean that ‘the landlord can raise the rent as much as he wants’?
The removal of the increase limit does not mean that the landlord will determine the rate. In the new period, rents will be determined according to the CPI 12-month average. For example, the last rate announced by TURKSTAT is 59.64 percent, more than twice the legal rate. The current rate to be announced in July will be followed and the ‘maximum’ increase can be made at this rate.
What will those who renewed their contracts on July 1 do?
The 25 percent limit will be applied including July 1. In other words, those who renew their contract on July 1 will pay rent with a 25 percent increase for one more year according to the law, while those who renew on July 2 will be based on the inflation average.
Ongoing Lawsuit Process
For the past two years, rent cases have locked the courthouses. Rent determination and eviction cases have created a serious burden on the legal system. For this reason, ‘mediation requirement’ was introduced before the lawsuit. However, those who could not agree here also took the way to the court.
Since the litigation process takes 2-3 years, many landlord-tenants are still waiting for the court decision. Tenants in this situation must also comply with the current legal increase rate. It is not possible for the tenant to say, ‘We are already in litigation, I will raise 25 percent’. If this is a rent determination case, the court will announce the current rent value and after the decision is finalized, the CPI 12-month average will be taken into account in the rent increase period (if the date is after July 1).
Eviction Right
The regulation was for the rent increase rate, the expiry of the period only means the expiry of this rate. The landlord cannot ask for eviction with the perspective that the tenant’s protective shield has been lifted. There must be a justifiable reason for eviction.
The landlord may request the eviction of the tenant if he or a dependent is in need, if there is one of the justified eviction reasons written in the Code of Obligations. However, he cannot rent the house to someone else for 3 years after saying that he needs it. For a tenant whose 10-year contract extension period has expired, eviction can be requested without any justification. If the house is sold, the person who buys the property can demand the eviction of the tenant if he/she is going to live there. In addition to all these, if the landlord has a ‘valid eviction commitment’, he/she can request eviction.
Landlords Finding the Legal Rate Low
In the rental market, not only tenants but also landlords are victimized. While the former tenant sits at an affordable price, when the increase is limited to 25 percent for two years, the rental price falls far below the current value. Property owners are worried that ‘even if we increase according to the CPI 12-month average, the rent will remain low’.
