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The Diplomatic Clause in Rental Contracts

(01 July 2009)

Whilst most words deriving from ‘diplomacy’ are buzzwords evoking immunities and exemptions applicable to a chosen few, there is at least one usage that makes reference to duties rather than privileges. Having or not having a diplomatic clause included in your rental contract can make all the difference– whether you are a landlord or a lessee. The latest article from GMW Advocaten’s Law Matters series spells out the different scenarios.

 

Expats moving to The Netherlands are often shocked by the unusual level of protection lessees enjoy in this country…. and nobody seems to really mind. Dutch tenancy law provides a solid framework that makes it very hard on lessors to whimsically terminate a rental contract from one moment to the other. And, just as every other regulation, this one has a fully legal way out, too – the much invoked and somewhat elusive ‘diplomatic clause’.

 

The basic principle of Dutch tenancy law is that the tenant is to be considered the ‘weaker party’. Often, legislation regarding rental contracts is imperative and parties, especially landlords, are not allowed to deviate from this legislation by means of an agreement. The imperative character of this legislation is clearly reflected in the rules regarding the way one is to give notice when looking to terminate the rental contract of a lessee.

 

Expatriates in The Netherlands often conclude rental contracts for a limited period of time. It is good to know that in general, temporary rental contracts are extended automatically, if no prior notice was given before the ending of the mutually agreed first term. In order to prevent an open-end-rental-agreement-situation, a ‘diplomatic clause’ can be added to the contract.

 

In principle, both the landlord and the tenant can benefit from a diplomatic clause. As previously mentioned, it can be extremely difficult for landlords to terminate a rental contract in case the tenant is not willing to leave the rented property. In most cases the desired outcome will only come by ways of a ruling issued by a judge. Adding a diplomatic clause to the rental agreement can facilitate the termination of a rental contract; however, a court order will still be necessary.

 

Such a diplomatic clause must stipulate two conditions: that the rental property is to be vacated in case the landlord wishes to live in the rental property himself after the term for tenancy agreed to in the contract has come to an end. And, that the landlord has a righteous interest for the tenancy agreement to end. The court will issue a ruling terminating the rental agreement only if both these elements are contained in the clause.

 

Such a diplomatic clause is often used by Dutch nationals who temporarily live and work abroad on a secondment; they will most often rent out their home, wanting to make sure that once their secondment has ended they will be able to force the tenant to leave, should push come to shove.

 

A diplomatic clause can also serve the interests of a tenant. In most cases, such a clause will imply that the lessee can terminate the tenancy contract even before the anticipated and initially agreed date of termination of the contract. However, the diplomatic clause can only be invoked if all conditions of the clause have been fulfilled.

 

Such clauses often include the condition that the lessee can terminate the contract if, for work related reasons, he is transferred to a location further than, let’s say, 75 kilometres away from his current residence. Another condition often included is the termination of the contract in case of force majeure. This essentially frees both parties from obligations when an extraordinary event or circumstance beyond their control occurs. Such conditions will have to be interpreted in a strict way - should the lessee wish to relocate for private reasons, he will not be able to automatically invoke the diplomatic clause.

 

After having made it to the end of this article you might want to check if your rental contract has a diplomatic clause. For the sake of certainty, it is advisable to seek a legal opinion – and you know where to find us.

 

Please contact Hein Hoogendoorn for more information on this subject: h.hoogendoorn@gmw.nl or  www.gmw.nl/en

 


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