Seven Common Mistakes in Rent Increases

Now most people know that the legal ceiling for rent increases is the rate of change in the twelve-month averages of the CPI. Despite this, the same mistakes are repeated in practice, landlords lose money every year, and tenants fail to realize they are paying too much.

Mistake 1: Using the wrong month's rate

The rate to be used is the twelve-month average announced for the month preceding the month in which the contract is renewed. For a contract renewed in September, the August rate applies. Since the rate changes every month, choosing the wrong month directly leads to the wrong rent.

Mistake 2: Confusing the monthly change with the average

TURKSTAT announces two different figures every month: the change for that month and the change based on twelve-month averages. The one to be used for the rent increase is the latter. Calculating with the monthly or annual change figure often results in an increase above the ceiling, and the exceeding portion becomes invalid.

Mistake 3: Calculating according to an expired regulation

A temporary twenty-five percent ceiling was applied to residential rentals between June 11, 2022, and July 1, 2024. This period has closed; the criterion is once again the CPI average. Such a ceiling was never applied to commercial property rentals anyway.

Mistake 4: Failing to notify the rent increase in writing

An increase within the legal limit does not depend on the tenant's consent; however, in the event of a dispute, the burden of proving that the notification was made falls on the landlord. Making a written notification before the renewal period nips most of subsequent disputes in the bud.

Mistake 5: Failing to make the increase and then demanding it all at once

The right to a rent increase is not lost; it can be requested retroactively. However, an increase that is not actually collected falls behind in the calculation of the following year as well; the loss accumulates and grows over the years. In a contract where no rent increase is made for two consecutive years, the difference in between is mostly never recovered.

Mistake 2: Trying to make a rent increase in the middle of the year

The increase is valid for the renewal period of the contract. A unilateral increase cannot be made in the middle of the year. Even in cases accepted by the tenant, such a modification remains open to dispute in the future.

Mistake 4: Still looking at the CPI when five years have elapsed

When the rental relationship reaches the five-year mark, the criterion changes: the CPI ceiling no longer applies, and the fair market rent of the property can be taken as the basis instead. If the parties cannot reach an agreement, the court determines the new rent by evaluating comparable rents and the condition of the property.

For a contract where no rent increase has been made for a long time, reaching the end of five years is the biggest window of opportunity for the landlord. Most people miss it because they do not keep track of this date.

What is decisive in a rent determination lawsuit?

The expert examines the location and condition of the property, collects comparable rental agreements in the region, and arrives at a rent amount by applying a fairness discount. What is decisive here is not the advertised listing prices, but actually signed contracts. The power of comparable data directly affects the outcome of the lawsuit.

If a rate lower than the legal ceiling has been agreed upon in your contract, the rate in the contract shall apply. This article is for general informational purposes and does not constitute legal opinion.