The 25% cap on rent increases went into effect on June 10. Due to the fact that the regulation, which will last until July 1, 2023, starts in June, anyone who does not want to be covered for the second time postpones their new lease contracts to July 2, which expire in June. In addition, some landlords are starting to demand air money for housing and commercial units, and will evict the current tenant to rent out their properties at higher prices. It is warned that with the request, informality will increase and the cases of tenants in the courts will intensify.
“Air money came into play”
Stating that the regulation started on June 10 and ended on July 2, 2023, Istanbul Real Estate Brokers Cooperative (İSTEB) Chairman of the Board of Directors Ulvi Özcan said: “Therefore, those who enter now will make a deal with a rate of 25 percent next year. So they are pushing new contracts to July 2nd so they won’t be affected by 25% next year,” he said. Explaining that apps like air money also came into play, as in workplaces, Özcan said: “Apps like evacuation appointments are being applied more. This was something that had to be done. However, what is the sin of those who have income from a single house to stay in this scope? That’s why the arrangement was made without thinking about the front and the back”, he said. Expressing that those who think that rent is no longer a good investment due to the limitation, will put their house up for sale and this will increase the number of houses for sale , Özcan said: “However, these houses will also sell at high prices. They will be rented at high prices. So this will not be a solution to the rent problem. “We’re already starting to hear about it,” he said.
“This work goes to the news on page 3”
Evaluating the request, TURYAP general manager Kemal Karadağ said the regulation was not applicable when they spoke with real estate agents in the field. “Maybe a well-meaning segment that is happy with the tenant will approve the deal, but most will fight to do what I can do for the increase,” Karadağ said, adding, “This will cause an increase in rent determination cases. Because of those who think they’re relatively strong and find the right to say ‘I scare and harass’, that might go all the way to the 3rd page of news.”
Pointing out that homeowners will try to offset their grievances with unregistered money so as not to be victims, Karadağ said: “Homeowners will officially increase by 25% and leave the rest unregistered. The tenant can also go to court saying ‘I made payments through this unregistered channel’. Rent cases in court will increase. Therefore, in the current economic conditions, this regulation will not be a solution on its own. This will cause bigger public problems.” Noting that there will be those who say, ‘Instead of negotiating with the tenant, I will sell my house, take my money, invest in foreign currency, gold, put it in a currency-protected account’, Karadağ said that the number of those will not be as intense as the contentious actions brought.
The president of the Real Estate Bar Association, lawyer Ali Güvenç Kiraz, also explained the legal dimensions of the practice. Noting that the rate of increase in rent will be 25 percent between 10.06.2022 and 01.07.2023, instead of the 12-month variation rate of the CPI, with the regulation replacing article 344 of the Code of Obligations by article temporary, Kiraz said: A ceiling of 25 percent will be applied to all tenants twice. That’s a big inequality. When making a new regulation urgently, the effective date of the law should be 01.07.2022-01.07.2023 as discussed for the first time. Noting that all tenants whose renewal period ended on July 1, 2023 will increase by 25%, and all tenants who have a later extension period, within the scope of the 12-month CPI change rate, Kiraz said: “ At that point, no matter how or what period they all increase, the old practice is now in 2024. The CPI will increase within the scope of the 12-month rate of change,” he said.
Ads decreased 2%, rents increased 1%
Emlakjet General Manager Tolga İdikat said they have seen a 2% drop in the number of rental listings in a short time since the listing which brought an upper limit to the annual rental rate increase. “You can measure the decrease in rental ads since June 10th as landlords withdrawing from their rental ads,” İdikat said and continued: you can see. Therefore, the new regulation may lead landlords to demand higher values when setting rental prices. But for now, it looks like the owners have put their selling and leasing decisions on hold. We think they are watching the market to determine property prices,” he said.
Eviction action from landlords to tenants
Lawyer Ali Güvenç Kiraz, president of the Real Estate Law Association, said homeowners are very uncomfortable with current regulations. “While the market inflation rate is over 100%, the CPI rate is 73%, and the 12-month CPI rate of change is 39.33%, they don’t think it’s right that nearly half of that rate is applied to the rent increase, and they see it as unconstitutional,” said Kiraz. At this point, we see that in the last week, landlords want to evacuate their tenants very seriously. We see that the reason for the eviction is based on need, and they even want transfer this situation to the new owner by selling their properties with tenants”, he said.