Rent Increases Above the CPI Cap and Recovery of Overpayments

Renewal of a residential tenancy does not entitle the landlord to raise the rent by any percentage they choose. For an ordinary annual increase, the rent review clause in the lease applies, but it is invalid to the extent that it exceeds the change in the Consumer Price Index (CPI) based on twelve-month averages. A higher percentage written into the lease therefore does not, by itself, oblige the tenant to pay that increase. Turkish Code of Obligations, Article 344(1)

If the tenant is asked to pay more than this cap permits, the first step is to establish the rent due under the lease and the law. If the excess has already been paid, the issue becomes recovery of the difference. Whether the payment was made under an express reservation of rights, whether the parties subsequently reached an agreement, and whether that agreement is valid all matter when assessing a claim for repayment. Turkish Code of Obligations, Articles 77–78 and 344

Start with the rent review clause

For residential tenancies and leases of roofed business premises denominated in Turkish lira, agreements on increases for a renewed rental period are subject to a statutory cap. Article 344(1) of the Turkish Code of Obligations (TBK) sets this cap by reference to the change in the CPI based on twelve-month averages in the preceding rental year. A higher percentage in the lease does not make the excess enforceable simply because the lease was signed.

Nor is the CPI figure a mandatory increase for every lease. If the lease contains a valid rent review clause providing for an increase below the statutory cap, that clause generally applies. For example, where the parties have agreed a fixed percentage, a higher CPI figure for the relevant period does not, on its own, entitle the landlord to claim the difference. Before calculating an increase, it is therefore necessary to read how the lease provides for rent reviews. TBK Article 344(1)

If no agreement on an increase exists, the new rent is not simply left to the landlord's choice. A judge may determine the rent within the CPI cap, taking account of the condition of the property and fairness. TBK Article 344(2)

The CPI measure also needs attention: monthly inflation, the annual change compared with the same month of the previous year, and the change based on twelve-month averages are not the same indicator. The legislation uses the last of these. When matching a Turkish Statistical Institute (TÜİK) bulletin to the renewal period, both the reference month and the publication date should be checked; a figure belonging to a different period should not be used. TBK Article 344

The former 25% cap is not today's general rule. Provisional Article 2 of the TBK regulated increases for residential rental periods renewed between 2 July 2023 and 1 July 2024, inclusive. That temporary cap cannot be used as the basis for a current increase. If repayment of an amount paid for that earlier period is disputed, however, the rules applicable to the period concerned must be examined. TBK Provisional Article 2

What changes after five years?

The landlord may base the amount requested on rents for comparable nearby properties rather than an annual index calculation. The length of the tenancy then becomes important. For leases lasting more than five years or renewed after five years, and at the end of each subsequent five-year period, the court determines the rent by considering the change in the CPI based on twelve-month averages, the condition of the property, and comparable rents together. In that assessment, the CPI is not a standalone cap in the way it is for an ordinary annual increase. TBK Article 344(3)

For a tenancy exceeding five years, it is therefore incomplete to assess a demand based on comparable rents solely through a CPI calculation. Nevertheless, the passage of five years does not automatically turn the landlord's stated market rent into the rent payable. An agreement between the parties and a court determination of rent must be distinguished. TBK Article 344(3)

If the requested increase has not yet been paid

Once these distinctions are made, the amount requested can be compared with the amount due. The lease, the renewal date, and the payment history should be considered together, rather than relying on the latest bank transfer alone. A written objection can identify the rental period concerned and explain which lease term or statutory limit is the basis for rejecting the demand.

Stopping rent payments altogether, or continuing to pay the old amount in every case, is not a safe response to an increase. Challenging a demand above the statutory cap does not mean that a valid contractual increase can also be disregarded.

The dispute in Court of Cassation, 8th Civil Chamber, E.2017/4273 K.2017/16360 — 06.12.2017 illustrates this point. The tenant argued that they had increased the rent as far as their means allowed and owed nothing further. The landlord had commenced enforcement proceedings for differences arising under the rent review clause. The first-instance court rejected the claim because the amounts paid had been accepted for a long time without a reservation of rights. The Court of Cassation reversed the decision, holding that acceptance alone did not establish that the contractual increase had been waived.

For a tenant, the practical lesson is to show not only that payment was made, but also why the amount paid was sufficient under the lease and the statutory cap. The decision concerned the producer price index (ÜFE) rules then in force; today's calculation uses the CPI measure in TBK Article 344. It is also important to remember that this case concerned an alleged rent shortfall, not an overpaying tenant's right to repayment.

If the amount has been paid: what does a reservation of rights achieve?

A tenant may have paid the increase despite disagreeing with it. At this stage, statements made when paying and correspondence between the parties matter alongside the amount paid. An express reservation of rights explains that payment is not an unconditional acceptance of the increase and that the relevant rights are reserved. It should be clear which period and which increase the reservation concerns.

Adding a reservation to a transfer reference does not, however, guarantee recovery of an overpayment. Nor does the absence of a reservation establish that all rights to repayment have been lost. The basis for the payment must be examined first: did the disputed amount arise from an invalid rent review clause or a subsequent agreement, and, if there was such an agreement, was it valid? Payment cannot be considered separately from the agreement said to have given rise to it. TBK Articles 344 and 77–78

If the repayment claim is based on unjust enrichment, TBK Articles 77 and 78 should be read together. The former provides for the return of enrichment obtained without a valid legal basis. Article 78 generally requires a person who voluntarily performed an obligation they did not owe to prove that they paid in the belief that they were indebted; it also preserves other statutory provisions. Whether an increase exceeds the cap and whether the excess payment can be recovered therefore require separate examination. TBK Articles 77–78

The documents supporting a repayment claim should include the lease and its amendments or attachments, correspondence about the increase, bank records, and any reservation of rights. The alleged overpayment should be identified separately for each rental period. Deducting the amount believed to have been overpaid from future rent is a different matter. Without first examining the conditions for deduction or set-off, such a reduction may lead to an allegation that rent has been underpaid.

Where does a rent determination action fit in?

If the parties cannot agree on the rent for the new period, a court determination may be sought. That is the purpose of a rent determination action. Recovery of sums allegedly overpaid in the past is a separate claim; a request to determine the rent does not automatically include a claim for repayment.

Nor is it always necessary to wait five years before seeking a determination. The rules in the first two paragraphs of TBK Article 344 matter for a determination before five years, while comparable rents and fairness become relevant for the periods exceeding five years described above. In the business-premises tenancy considered in Court of Cassation, 3rd Civil Chamber, E.2018/2245 K.2018/5591 — 22.05.2018, the first-instance court rejected the request on the ground that a rent determination could not be sought before five years had elapsed. The Court of Cassation reversed that part of the judgment, explaining that a determination could be made for the relevant period under the first two paragraphs. The fact that five years had not elapsed did not, on its own, require rejection of the claim.

The date from which the determined rent takes effect also matters. TBK Article 345 states that an action may be brought at any time, but sets additional conditions for the determination to apply from the beginning of a new rental period:

• If the action is brought no later than thirty days before the new period begins, the determined rent may apply from the beginning of that period.
• If the landlord gives written notice of an increase within that timeframe, an action brought by the end of the ensuing new rental period may also take effect from the beginning of the period.
• If the lease contains a provision for an increase in the new period, the rent determined in an action brought by the end of that new period takes effect from the beginning of the period.

The rent review clause is therefore relevant to more than the calculation alone. In Court of Cassation, 3rd Civil Chamber, E.2017/8251 K.2019/5094 — 29.05.2019, the lease stated that the rent would increase but left the percentage blank. The first-instance court rejected the action as out of time. The Court of Cassation's reasoning was as follows, in the original Turkish:

“Sözleşmede yıllık yapılacak artış oranı belli değil ise de, kira bedelinin artırılacağı hususunda tarafların iradesinin bulunduğu anlaşılmaktadır.”

— Yargıtay 3. HD, E.2017/8251 K.2019/5094, gerekçe.

English translation of the quoted passage:

“Although the rate of the annual increase is not specified in the lease, it is apparent that the parties intended the rent to be increased.”

The Chamber reversed the decision, accepting that an action brought during the new rental period could seek a determination effective from its beginning. It did not fill in the missing percentage; it assessed the effect of the rent review provision on the period to which the decision would apply.

Mediation and court proceedings; additional steps if enforcement has begun

Before bringing an action for rent determination or recovery of an overpayment, the mediation stage must be considered. Applying for mediation is a prerequisite to litigation in disputes arising from a tenancy, subject to the statutory exception for eviction of rented immovable property through enforcement without a judgment. If no agreement is reached, these tenancy actions generally fall within the jurisdiction of the civil court of peace (sulh hukuk mahkemesi). Law No.6325, Article 18/B; Code of Civil Procedure, Article 4

If the landlord has commenced enforcement proceedings for a rent difference and a payment order has been served, the steps required in the enforcement file must also be addressed. An objection sent to the landlord does not replace the objection required in those proceedings. The type of proceedings, the date of service, and the available remedies need separate examination even while mediation is ongoing.

Where the conditions are met, a negative declaratory action (menfi tespit) may be brought to establish that the debt is not owed. If an amount alleged not to be owed has been paid in the course of enforcement, an action for recovery (istirdat) may become relevant. The recovery action under Article 72 of the Enforcement and Bankruptcy Code is not a general repayment remedy covering every voluntary rent overpayment. It addresses a person who has been compelled to pay in full a sum not owed because they did not object to enforcement or their objection was lifted, and provides for a one-year period from payment. Enforcement and Bankruptcy Code (İİK), Article 72

Bringing a negative declaratory action does not automatically stay enforcement. Was the action brought before or after enforcement began? Is interim relief available? Did enforcement begin after the mediation application? These matters affect the protection that may be sought. There is a specific statutory provision for proceedings commenced after an application for mediation. İİK Article 72; Law No.6325, Article 18/A(16)

Conclusion

When a landlord requests an increase above the CPI measure, the first step is to identify the basis for that request. Is it an ordinary annual increase, or does it rely on comparable rents because the tenancy has exceeded five years? The rent review clause and the renewal period affect the answer.

If the requested amount has not yet been paid, the objection should be made clear while the rent legally due is correctly established. If payment has already been made, showing that the percentage was high is not enough to assess repayment: the validity of the agreement, the circumstances of payment, and the evidence must be considered together. If enforcement has begun, service dates and procedural time limits must also be examined. This approach can help avoid bringing the wrong action on the strength of a rent calculation alone, or creating a new debt dispute by continuing to pay the old rent.