Security Deposit Caps and Rules (Turkey)

In Turkish residential and covered workplace leases, the "Security Deposit" (legally termed "Güvence Bedeli" or commonly "Depozito") is a mechanism protecting the landlord against unpaid rent, unpaid building dues (aidat), and extraordinary damages the tenant might cause to the property.

1. Statutory Maximum: 3 Months' Rent

According to Article 342/1 of the Turkish Code of Obligations (TCO), if a security deposit is agreed upon in residential and roofed workplace leases, the amount of this security (deposit) cannot exceed 3 months' rent. This limit is mandatory. If a landlord demands a deposit equal to 6 months' or 1 year's rent, the portion exceeding the 3-month equivalent is considered legally invalid. While paying rent in advance (e.g., 6 months upfront) is a separate matter, the maximum cap for funds held specifically as a "deposit" is strictly 3 months.

2. Mandatory Storage Method (Joint Time-Deposit Account)

In practice in Turkey, the deposit is often handed over in cash or transferred directly into the landlord's personal bank account. However, this is contrary to the system mandated by law.

According to TCO Article 342/2:

• If the security is provided as money, the tenant must deposit it into a time-deposit savings account structured so it cannot be withdrawn without the landlord's consent (a Joint Deposit Account).
• If the security is a negotiable instrument (e.g., a promissory note), this document must be deposited at a bank.
• The bank may return the money or the document to either party only with the consent of both parties, or upon the finalization of execution proceedings, or based on a finalized court decision.

The purpose of placing the deposit in a time-deposit account is to prevent the money from losing value against inflation (aiming to preserve its value partially through interest, especially under Turkish economic conditions). However, this rule is frequently bypassed in reality, with funds paid directly to landlords, leading to value loss or refund disputes upon moving out.

3. Permissible Deductions from the Deposit

A landlord may make deductions from the deposit in the following scenarios:

1. Unpaid Rent and Dues: Outstanding rent arrears at move-out or unpaid utility bills/building management fees (aidat).
2. Extraordinary Damages: Damages caused to the property (doors, wet floors, fixtures) due to the tenant's negligence or deliberate actions.

IMPORTANT: The landlord cannot deduct costs for "ordinary wear and tear" (natural depreciation not considered abuse) from the deposit. (For example, natural fading of wall paint, dulling of tiles over years, or periodic repainting costs). Because of this, it is essential in Turkey to complete a detailed, photographic Handover Protocol (Teslim Tutanağı) documenting the property's condition at move-in.

4. Refund Process and Timeline

After the lease ends and the tenant vacates the property, the landlord should return the deposit. If the deposit was kept in a bank account in accordance with the law, TCO 342/3 states: If the landlord does not notify the bank in writing within 3 months following the end of the lease agreement that they have filed a lawsuit or initiated execution/bankruptcy proceedings against the tenant regarding the lease, the bank is obliged to return the security deposit to the tenant upon the tenant's request. In other words, if the landlord remains silent for 3 months after taking back the property, the tenant can retrieve the money from the bank independently.

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