A “how to” guide for Turkish rentals

Whether you are a landlord or a tenant, this column should be interesting for you.

The main issue in drafting a rental agreement is to include the parties, the description of the property, and the terms and conditions. Under Turkish law the parties are only bound by the basic mandatory principles of the Turkish Penal Code (TCK).

Some examples of mandatory terms are: no agreements for longer than a period of 10 years can be made, no agreement against the public order can be made (for instance a rental agreement for a gambling club is not valid because gambling is forbidden in Turkey), an undertaking by the tenant to evacuate the premises at a certain date cannot be made at the time of signing a rental agreement (this can only be made after a reasonable period has elapsed following the signing of the rental agreement).

The parties to a rental agreement can freely design the content of a rental agreement. Here are some examples I can give to demonstrate the contract freedom concept concerning Turkish rental law: The parties can freely decide the period of the rental agreement as long as it is less than 10 years, what part of the property will be rented, if there will be sub rentals, etc. What about the rent increase rate? The parties can also decide the rental increase rate freely.

In most cases the rental increase rate is tied to the average index rate of consumer prices. This rate is called “TUFE” in Turkish. Here I would like to refer to a question sent by email from Elizabeth: “Hi Mr. cektir, I read your columns every time they come out and have used them as a sort of unofficial guide’ to living in Istanbul. I have a question that I could use your help with. It has to do with annual increases in the price of rent. I’ve heard from people that the government regulates how much my landlord can increase my rent [by] each year. Could you tell me how I learn this amount each year? I’ve lived in my current flat in Istanbul for almost a year and I’m trying to prepare myself if my landlord requests an increase in rent.” Indeed it is not the government who regulates the rate. The TUFE rate is a figure created by calculation of the average consumer prices in the last 12 months before the month when the calculation is done. It is an average figure of many commodities. For May 2015, the TUFE figure increased at a rate of 1.63 percent compared to the previous month and it increased 8.57 percent compared to 12 months since same date last year. Some people use the UFE rate, which is the average of the TEFE and TUFE rates, which is today 7.36 percent. If your rental agreement is referring to the TUFE rate, then you can use the TUFE rate announced by the Turkish Statistics Institute (TuiK).

More importantly, the parties have the right to go to court to request the determination of the rental figure. This can be done when the rent of the property goes under or above the average rental figures in the same or similar neighborhood. This is a common strategy generally used by the landlords to claim that rents decrease to below-average levels after some years of tenancy. In case you have questions about rental increase lawsuits, I would be happy to write another article in particular about this topic.

NOTE: Berk cektir is a Turkish lawyer and available to answer questions on the legal aspects of living and doing business in Turkey. Please kindly send inquiries to b.cektir@todayszaman.com. If a sender’s letter is published, names may be disclosed unless otherwise is expressly stated by the sender. DISCLAIMER: The information provided here is intended to give basic legal information. You should get legal assistance from a licensed attorney at law while conducting legal transactions and not rely solely on the information in this column.

SOURCE: Today’s Zaman