Was the Tenant Overcharged? How to Calculate Rent Increases Under the CPI and the 25% Cap

Increase rates in lease agreements are an issue that comes back onto the agenda every year for both tenants and landlords — and one that is very often calculated incorrectly. The increase formula written into the contract and the upper limit permitted by law are frequently not the same, and over the years this difference can turn into a serious dispute over amounts owed or owing. So which rate should govern the rent increase, how binding is the clause in the contract, and is the 25% cap from past periods still relevant today?

Why Does This Matter So Much?

The vast majority of lease agreements in Turkey contain wording such as "the rent shall be increased by the previous year's PPI-CPI average." However, in order to protect tenants, the legislature has imposed a mandatory upper limit on such increase clauses. Not knowing about this limit can lead the tenant to overpay, or leave the landlord unable to claim the increase to which they are entitled. The fluctuations in inflation rates in recent years in particular have made these calculations even more important.

Summary of the Situation (A Typical Scenario)

A tenant, relying on the "PPI-CPI average" wording in the special conditions section of a contract signed several years ago, has paid the rent each year according to that formula. Over time, however, the temporary increase caps introduced by law (in particular the 25% cap applied to residential leases) took effect in some periods, while in other periods only the 12-month average of the CPI applied. Unsure whether the amounts paid were calculated correctly year by year, the tenant wants to clarify both their past payments and any possible debt. This is a typical picture experienced by many tenants and landlords today.

The Legal Issue

The fundamental question here is this: when the increase clause in the contract conflicts with the statutory upper limit, which one applies? And should the tenant's payments be assessed against the contract or against the statutory cap?

The Legislative Framework

• Turkish Code of Obligations (TBK) Art. 344 (Index Cap): Agreements on rent increases cannot exceed the rate of change according to the 12-month averages of the consumer price index (CPI) for the previous lease year. Even if the contract stipulates a higher rate, the portion exceeding the CPI is invalid.
• TBK Provisional Articles 1 and 2 (the 25% Cap): For residential lease periods renewed between 8 June 2022 and 1 July 2024, the upper limit on increases was set at 25%. For periods renewed after that date, the 12-month CPI average once again applies.
• TBK Art. 344/3 (the Five-Year Rule): In lease relationships that have continued for five years or longer, either party may file a "Rent Determination" lawsuit and request that the rent be re-set according to comparable rents and equity.
• Law No. 6257: The term "WPI (TEFE)" appearing in contracts is, under current legislation, taken into account in practice for rent increases as the CPI average, not as the "D-PPI (Yİ-ÜFE)."

What Does the Yargıtay (Court of Cassation) Say?

• Validity of the contractual clause: In decisions of the Yargıtay (Court of Cassation) 8th Civil Chamber (2018, E. 2018/14748, K. 2018/18936) and the Yargıtay 6th Civil Chamber (2016, E. 2016/279, K. 2016/7482), it was emphasized that increase clauses in the form of a "PPI-CPI average" are valid and binding on the parties, but that the increase can in no event exceed the CPI upper limit in TBK Article 344.
• Cumulative calculation: A decision of the Yargıtay 3rd Civil Chamber (2021, E. 2021/4624, K. 2021/6945) stated that rent increases must be calculated cumulatively for each renewed period. That is, each year the increase is applied to the previous year's updated rent — not to the initial rent.
• The reservation (ihtirazi kayıt) condition: According to a decision of the Yargıtay 6th Civil Chamber (2016, E. 2016/10125, K. 2016/5896), the landlord's acceptance of the rent without objection (without reservation) does not mean they have waived the right to the increase under the contract. Accordingly, if an underpayment was made, the landlord may claim it later.
• The burden of proof lies with the tenant: According to a decision of the Ankara Regional Court of Appeal, 15th Civil Chamber (2024, E. 2023/1877, K. 2023/1877), proving that the rent debt has been paid falls to the tenant; this can only be proven with written documents such as bank receipts or payment receipts. Pursuant to the Yargıtay 6th Civil Chamber (2012, E. 2011/12458, K. 2012/1125), the amount payable under the contract must be determined and actual payments set off against it.

Points to Watch

• Calculate each period separately. The 25% cap may have applied in one year, while only the CPI average applied in another. Calculating all years with a single formula produces misleading results.
• Do not forget the cumulative logic. The increase rate is always calculated on the previous year's updated rent.
• Keep your bank receipts and payment receipts. Proof of payment must be made with written documents; an oral statement is not sufficient.
• Paying without reservation does not mean a loss of rights. The tenant or the landlord may assert their statutory rights later, even if they raised no objection to earlier payments.
• Have the concrete numerical picture clarified by an expert. Comparing increases spread over the years against TurkStat (TÜİK) data and the receipts in your possession will only yield a sound result through an expert examination.

Conclusion: What Should You Do?

The path to the correct result in rent-increase disputes lies in assessing the contractual clause together with the statutory limit specific to each period (the CPI average or, where applicable, the 25% cap). If you have doubts about whether your rent has been calculated correctly:

• Note the start date of your contract and each renewal period.
• Gather all the payment receipts in your possession.
• Obtain the 12-month CPI average data for the relevant years from TurkStat (TÜİK).
• If necessary, clarify your retrospective debt/credit position through an expert examination or a rent determination lawsuit.

Since this process involves technical calculations, obtaining support from a law firm — especially in long-running lease relationships — will prevent losses of both time and money.