Return of rent payments made in excess of the limits set under article 344 of the Turkish code of obligations

In disputes concerning the determination of rent in residential and roofed workplace leases in Türkiye, various debates arise in practice regarding the mandatory nature of Article 344 of the Turkish Code of Obligations No. 6098 (“TCO”) and the limits of party autonomy against this provision.

Particularly in recent years, factors such as high inflation, the temporary limitation of rent increase rates to 25%, and rapid changes in market conditions have led to widespread implementation of rent increases exceeding the statutory limits between landlords and tenants. This has raised the question of whether rent payments made above the statutory threshold may be reclaimed by tenants, resulting in numerous related lawsuits.

This article examines, in light of the decisions of the Court of Cassation and the Regional Courts of Appeal, the mandatory nature of Article 344 of the TCO, whether rent amounts paid above the statutory limit may be reclaimed, and the effects of the excessive hardship provisions regulated under Article 138 of the TCO on lease relationships.

1. Mandatory Nature of Article 344 of the TCO

Article 344 of the TCO regulates the fundamental principles concerning the determination of rent increase amounts. Pursuant to this provision, agreements between the parties regarding the rent applicable in renewed lease periods are valid only to the extent that they do not exceed the twelve-month average Consumer Price Index (“CPI”) increase rate applicable to the relevant lease year.

The Court of Cassation has consistently held that Article 344 of the TCO is tenant-protective in nature and constitutes a mandatory provision related to public order. Indeed, the Court of Cassation clearly states that Article 344 is mandatory in favor of tenants, that this matter concerns public order, and that agreements intended to circumvent such limitation must be deemed invalid.

Particularly in disputes concerning the determination of rent and rent increase rates, the Court of Cassation emphasizes that rent increase clauses must be assessed within the limits prescribed under Article 344 of the TCO. Accordingly, even if the parties agree on a higher increase rate, the portion exceeding the statutory limit is deemed invalid.

2. Refund of Rent Amounts Exceeding the Statutory Limit

Where a tenant makes rent payments exceeding the limits set forth under Article 344 of the TCO, the portion exceeding the statutory limit may be claimed back under the provisions governing unjust enrichment. This is because the part of the rent increase agreement that exceeds the statutory threshold is considered legally invalid.

According to the decisions of the higher courts, the principal legal basis in such cases is the unjust enrichment provisions of the TCO. Since the portion of a rent increase agreement contrary to Article 344 exceeding the statutory limit is deemed null and void, payments made in relation thereto may be reclaimed by the tenant within the framework of unjust enrichment.

In particular, decisions rendered during the period in which the 25% rent increase cap was in force demonstrate that payments made by tenants due to concerns of eviction, housing necessity, or economic pressure may not always be regarded as reflecting genuine intent. Unless there is a clear declaration of intent by the tenant accepting the rent amount exceeding the statutory limit (which may be evidenced through written documents such as additional protocols, correspondence records, etc.), the amount paid above the legal threshold will be considered “without legal basis” and may therefore be reclaimed by the tenant.

However, in practice, not every payment exceeding the statutory limit is considered refundable. Where there are clear agreements, additional protocols, correspondence, or similar concrete evidence demonstrating that the tenant freely accepted the rent amount exceeding the statutory limit, claims for restitution of the excess payment may be rejected.

Clear intent may be understood as a declaration demonstrating that the tenant knowingly accepted a specific new rent amount exceeding the statutory increase limit without being subjected to any pressure, eviction threat, or economic necessity.

Whether the tenant’s declaration accepting a rent amount above the statutory limit is valid must be assessed separately in each individual case. Particularly in residential leases, factors such as the continuation of the lease relationship, the tenant’s housing needs, fear of eviction, the parties’ economic circumstances, and the overall course of the lease relationship are important in determining whether such declaration was truly made freely.

Accordingly, in such disputes, the mere fact that payment was made is not sufficient; rather, the conditions under which the payment was made and the existence of the tenant’s genuine intent are of critical importance.

In summary, the limitation prescribed under Article 344 of the TCO is relatively mandatory in nature. While the refund of rent amounts exceeding the statutory limit may be claimed under unjust enrichment provisions, courts should conclude that unjust enrichment can no longer be asserted where the tenant has provided a clear declaration of intent regarding the determination of the rent increase rate.

CONCLUSION

When the precedents of the Court of Cassation and the Regional Courts of Appeal are evaluated together, it is evident that there is a strong and consistent body of case law recognizing Article 344 of the TCO regarding rent increases in residential and roofed workplace leases as a mandatory tenant-protective provision.

Within this framework, the higher courts’ jurisprudence establishes the following fundamental principles: (i) rent increase agreements exceeding statutory limits are invalid, (ii) rent amounts paid above the statutory increase rate may be reclaimed under unjust enrichment provisions, and (iii) the tenant’s genuine and free intent must be taken into consideration, particularly rendering payments made under eviction pressure invalid.

Recent decisions, especially those taking into account current economic developments, demonstrate that the imbalance of power in lease relationships and the right to housing are being considered by the courts. Therefore, courts assess not only the fact of payment itself, but also the circumstances under which the payment was made, whether the tenant’s genuine intent existed, and whether statutory rent increase limits were exceeded, while also evaluating the parties’ actual payment practices and the specific circumstances of each case.

Accordingly, in order to avoid disputes in lease relationships, parties should take into account the limitations prescribed under Article 344 of the TCO when implementing rent increases and should formalize any amendments concerning rent amounts through written documents clearly reflecting their declarations of intent.