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Find the meaning of various terms related to renting & letting here.
When renting a new home, there's more to consider than simply picking a property and moving in. Especially when you're searching for a rental for the first time, there are several things to keep in mind. If you're new to the world of renting, you'll likely come across terms you're not familiar with, such as delivery condition, rent protection, and the rent tribunal. These are terms you really should know when you're renting a place on your own, as it's likely you'll deal with one or more of these aspects.
Diplomatic clause
What does this entail?
In practice, the term diplomatic clause is interpreted in various ways, which can cause confusion among tenants and landlords. Therefore, this article explains the diplomatic clause at the request of both the landlord and the tenant.
Diplomatic clause at the request of the landlord
If the homeowner or original tenant decides to live elsewhere temporarily because of their job, they may choose to rent out their property temporarily. If they wish to return to the property afterward, a fixed-term rental agreement must be drafted. This agreement should include an eviction clause, meaning the tenant must vacate the property when the agreed period ends, and the landlord needs the property again.
The landlord must have previously lived in the property and must return to the property after the rental term ends. The landlord must also have a reason to reoccupy the property after the agreed rental period to fulfill the legal requirement of ‘urgent use’. If it concerns a newly built property that the landlord has not yet occupied but plans to after the rental period, the diplomatic clause is also applicable.
The tenant's rental protection is limited because they must leave the property by the end date of the agreed rental period. The property can be rented out in this way to multiple consecutive interim tenants.
The rental agreement must specify the reason for the interim rental and the specific rental period with the end date. The landlord is required to terminate the rental agreement according to legal regulations. The interim tenant cannot terminate the agreement before the end date of the agreed period unless this is agreed upon in writing. Rent price protection, such as the points system and maximum rent increase, still applies.
The landlord can terminate the rental agreement towards the end of the agreed term (and not earlier). There is a statutory ground for termination, meaning if the tenant refuses to leave, the landlord can enforce the termination and eviction through the court. This form of interim rental is also called a rental agreement with a diplomatic clause.
Diplomatic clause at the request of the tenant
A landlord renting out a property indefinitely can agree with the tenant on an initial period of a year. During this period, the lease cannot be terminated. This gives the landlord the assurance that the tenant will stay for at least a year.
When renting to an expat in this way, the expat often wants a so-called ‘diplomatic clause’ included in the rental agreement. This clause allows the tenant to terminate the lease early if they are transferred for work and need to move to another city or country. A diplomatic clause is an exception to the no-termination rule that applies during the initial period. In practice, this meaning is often given to the term diplomatic clause.
In most cases, such as with multinational tenants, companies will not approve a rental agreement unless a diplomatic clause is included. In practice, the diplomatic clause is rarely used. It is more common for tenants to stay longer rather than shorter.