Tenancy Law Series · 2 of 5
Rent is a substantial fixed cost for textile workshops, factories and stores. An increase stated in a contract is not automatically enforceable in full. The type of lease, renewal date, agreed clause and any applicable rent-determination or adaptation rules must be considered together.
1. The CPI ceiling for ordinary renewal increases
Article 344 of the Turkish Code of Obligations applies to residential and roofed workplace leases. An agreed ordinary renewal increase is valid only to the extent that it does not exceed the change in the consumer price index based on twelve-month averages for the preceding rental year. Commercial use does not remove this protection.
If the contractual formula produces a lower valid increase, the ceiling does not automatically raise it to CPI. Where it produces a higher figure, the excessive part is generally ineffective within the ordinary renewal framework; this does not invalidate the whole lease. If there is no applicable agreement, judicial determination under Article 344 must be distinguished from a landlord unilaterally selecting any increase.
The temporary residential 25 per cent restriction has expired and did not generally cover workplaces. This does not mean that twelve-month average CPI is the only rule for every situation: five-year rent determination, foreign-currency leases and adaptation claims require separate consideration.
Which inflation figure?
The relevant measure is the change based on twelve-month averages, not monthly CPI or year-on-year inflation. Check the official Turkish Statistical Institute release applicable to the renewal and its reference month. The month to which the data relate and the month in which the release is published are different; do not automatically take the bulletin published one calendar month before renewal or apply a later release retrospectively without checking the dates.
2. A simplified calculation
Assume monthly rent of TRY 100,000, a renewal clause requiring the applicable CPI increase, and a hypothetical twelve-month average figure of 35 per cent. The increase would be TRY 35,000 and the new monthly amount TRY 135,000.
This is an illustration, not a statement of the current official rate. It assumes an ordinary renewal without another applicable legal regime. A valid contractual increase below 35 per cent could produce a lower amount. Taxes, withholding and gross or net wording must also be checked before comparing payment figures.
If an excessive payment has already been made, recovery depends on the payment history, legal basis, evidence, limitation and other conditions. A refund should not be promised automatically. Retain demands, bank records, correspondence and any reservation of rights; avoid unassessed deductions from future rent that could create a non-payment dispute.
Older PPI or TEFE clauses
An older producer-price or mixed-index clause does not by itself override the applicable Article 344 ceiling. Determine what the clause actually produces, whether it is otherwise valid and which statutory rule governs that renewal.
3. When can an increase take effect?
An ordinary annual increase is linked to the rental period and renewal clause. A landlord cannot ordinarily compel an additional mid-period increase merely because market rents or costs have risen.
That rule must be distinguished from an agreed legally valid change or a judicial adaptation claim meeting its own statutory conditions. A business should not assume that every exceptional claim is barred simply because it arises during a rental year. Record the commencement and renewal dates and review any demand against the actual agreement.
4. The five-year threshold
For leases lasting longer than five years or renewed after five years, and at the end of each subsequent five-year period, Article 344 provides a different judicial determination framework. The court considers twelve-month average CPI, the condition of the premises, comparable rents and equity. It is not confined to applying the ordinary CPI ceiling mechanically.
This can concern a landlord seeking an increase from below-market rent or a tenant seeking an appropriate determination where the facts justify it. Neither a market comparison nor completion of five years automatically establishes the amount or entitles the landlord to immediate eviction.
Prepare reliable evidence of comparable premises, their location, size, condition and contractual circumstances. A textile workshop cannot necessarily be compared with an unrelated retail shop solely by square metre.
Timing and mediation
The effective period of a rent-determination judgment must be checked under Article 345. Filing or notice at least thirty days before the new period, subsequent filing within the relevant period and an existing renewal-increase clause can affect the result. It is inaccurate to assume that any judgment automatically takes effect from any date chosen by the claimant.
Lease disputes within Article 18/B of Law No. 6325 require pre-action mediation, subject to its statutory exceptions. The exceptions for certain non-judgment enforcement proceedings should not be treated as a general exemption for an ordinary rent-determination action.
5. Foreign-currency rent
Article 344 contains a separate regime where rent is validly agreed in foreign currency. Subject to the foreign-exchange legislation, the amount generally cannot be changed for five years; Article 138 on excessive hardship remains reserved. After five years, changes in the currency's value are considered alongside the other statutory factors.
Foreign-currency terms for Turkish real estate between Turkish residents are restricted under foreign-exchange rules, with exceptions requiring examination. Being an exporter or having a foreign shareholder does not by itself settle whether an exception applies. Check the parties, transaction and applicable rules before signing or calculating an increase.
6. A practical sequence for the operator
- Confirm the lease classification, commencement, renewal and any five-year threshold.
- Read the actual increase clause and identify the official CPI measure and release applicable to the relevant dates.
- Compare the contractual calculation with the ordinary statutory ceiling where that framework applies; do not treat the ceiling as an automatic increase.
- Request the legal basis for a mid-period or exceptional demand and assess it before accepting or rejecting it.
- Keep payment records and obtain advice before withholding or offsetting sums.
- Prepare comparable-rent evidence and check Article 345 timing and mediation if litigation is being considered.
Frequently asked questions
Must I pay a contractual 50 per cent increase?
For an ordinary renewal covered by Article 344, the applicable twelve-month average CPI ceiling limits a higher contractual increase. A five-year determination or other distinct legal situation must be assessed separately.
Does the ceiling also protect a roofed workplace?
Yes. It is not confined to residential leases.
Can a landlord demand a mid-year increase?
A unilateral ordinary increase is generally not enforceable merely because market prices rose. Judicial adaptation and other legally valid arrangements are separate questions.
Does five years mean automatic market rent?
No. A judicial determination involves the statutory factors, proper procedure and evidence. Completing five years is not itself an eviction ground.
Sources and series navigation
- Turkish Code of Obligations No. 6098: Articles 138 and 344–345.
- Law No. 6325 on Mediation: Article 18/B.
- Turkish Statistical Institute: official CPI releases.
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General information: This article concerns Turkish law. Rates change and the applicable regime depends on the lease and dates. It does not replace advice on the individual documents; Turkish statutory texts govern.