The cap introduced to restrain fluctuations in residential and commercial rents created uncertainty for both sides of the market. Following the expiry of the strict 25% ceiling applied to residential rents between 2022 and 1 July 2024, the market has returned to the standing rules of the Turkish Code of Obligations.
With eviction, rent determination and adaptation claims increasing through 2026, we summarise below how lease agreements between landlords and tenants should be structured around the consumer price index.
The Current Framework: What Is the Statutory Cap?
The legal basis for rent increases is Article 344 of the Code of Obligations. Agreements on increases at renewal are valid provided they do not exceed the twelve-month average of the consumer price index (CPI) for the preceding lease year.
As at 2026, the only statutory ceiling applicable to both residential and commercial leases is the twelve-month CPI average.The parties may agree an increase below that figure. But an agreement above it is contrary to the statute even if made in writing and signed by both parties.Common Disputes
1. Demands Above the CPI Cap (Partial Invalidity)
Where a landlord demands an increase above the statutory cap on the basis of inflation or local market rents, the tenant is entitled to refuse.
The legal position: Even where the lease states that "rent shall increase by 60% annually regardless of inflation" and both parties have signed, that clause is invalid as a matter of partial invalidity. In proceedings, the court disapplies it and brings the increase back to the CPI ceiling.What the tenant should do: On renewal, the tenant should calculate the statutory limit using the twelve-month average and record the payment on the transfer as a rent increase payment. If the landlord refuses to accept it, the tenant is not in default, and the landlord must bring proceedings before the civil court of peace.2. Rent Determination Proceedings After Five Years (Article 344/3)
The legislature introduced the five-year rule to prevent long-standing tenants from paying far below what new tenants in the same area pay during periods of high inflation.
Once the tenancy has run for five full years, the landlord may bring proceedings for the determination of the rent, which breaks the CPI ceiling. In such proceedings the court does not apply the CPI limit. It considers the condition of the property and comparable market rents in the area, applies an equitable discount to reflect the existing tenancy (commonly in the range of 10-20% in practice), and sets the rent at market levels.Mandatory mediation: Under Law No. 7445, mediation is a procedural precondition in disputes arising from lease relationships, including rent determination and eviction claims (with the exception of evictions through enforcement proceedings without judgment). A claim filed without first applying to the mediation office is dismissed on procedural grounds.3. Confusing Monthly Inflation With the Twelve-Month Average
This is the most frequent error in practice. Parties take the monthly CPI figure, or the annual CPI figure, announced in the news for the month of the increase. Rent may be increased only by reference to the twelve-month average rate of change column in the statistical institute's bulletin.
4. Rent Denominated in or Indexed to Foreign Currency
Under Article 8 of the Communiqué on Decree No. 32 on the Protection of the Value of Turkish Currency, rents may not be denominated in or indexed to foreign currency in lease agreements, including residential and roofed commercial leases, concluded between persons resident in Türkiye over property located in Türkiye.
The exceptions are narrow and specifically defined; the general assumption that "foreign currency is allowed if a foreigner is involved" is wrong. For foreign currency to be agreed, the tenant must be one of the following: a person resident in Türkiye who does not hold Turkish citizenship; or a branch, representative office or liaison office in Türkiye of a person resident abroad, a company in which such persons hold 50% or more of the shares directly or indirectly, or a free zone company. The lease of accommodation facilities certified by the Ministry of Culture and Tourism for operation, and the lease of duty-free shops, are separate exceptions.
Breach does not render the contract void as a whole: the Communiqué requires the prices in affected contracts to be redetermined by the parties in Turkish lira. If the parties cannot agree, the formula in the Communiqué applies: the amount is converted at the Central Bank effective selling rate of 2 January 2018 and increased by monthly consumer price index changes from that date to the date of redetermination. An administrative fine may also follow under Article 3 of Law No. 1567.
Strategic Guidance
For landlords:
Where a tenancy has passed five years, begin the mediation process rather than raising the increase verbally. Rent determination proceedings take on average 18 months to two years, during which you continue to collect the lower rent, although the difference is recoverable with interest once the decision becomes final.Under Article 347, in residential and roofed commercial leases the landlord may terminate without giving reasons at the end of the ten-year extension period. The calculation is often got wrong: the ten years run not from the start of the lease but from the extension period beginning after the fixed term expires, so with an initial one-year term the right arises in practice at the end of the eleventh year. Termination is not automatic either: written notice must be given at least three months before the end of each extension year that follows, and eviction proceedings brought if the tenant does not leave.For tenants:
If you have been required to pay above the statutory cap, recovery of the excess under the rules on unjust enrichment (Articles 77 et seq.) may be available. Two significant obstacles should be understood from the outset:Article 78: A person who voluntarily performs an obligation they did not owe may recover only on proving mistake. A tenant who knowingly pays the excess for years without reservation runs into this provision.Limitation: A claim in unjust enrichment is time-barred two years from the date the right became known and in any event after ten years (Article 82). Planning to bring a single claim on moving out risks losing the earliest years to limitation.The better approach: Rather than paying the excess silently, make the payment under reservation of rights and record that on the transfer. This both addresses the obstacle in Article 78 and protects the claim from limitation.This analysis is provided for general information to landlords and tenants and does not constitute an authoritative opinion.
Last updated: 10 August 2026.
