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. This article spells out the different scenarios.
The legal diplomatic clause
Expats moving to The Netherlands are often shocked by the unusual level of protection lessees enjoy in this country. 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
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 on basis of a lawful ground was given before the ending of the mutually agreed term. In order to prevent an open-end-rental-agreement-situation, the landlord that rents out his own home can add a ’diplomatic clause’ to the contract.
Diplomatic clause and termination of rental contract
Adding a diplomatic clause to the rental agreement can facilitate the landlord for the termination of a rental contract; however, a court order will still be necessary in case the lessee refuses to accept the termination. The court will issue a ruling terminating the rental agreement only if both of the hereafter following conditions are contained in the clause. And if the landlord provided proof that the conditions are actually met in practice and that he has an interest in the termination of the lease.
A diplomatic clause must stipulate two conditions: first that the rental property is to be vacated on the last day of the lease. And second that -in case the landlord wishes to live in the rental property himself again after the term for tenancy agreed to in the contract has come to an end- he can terminate the rental agreement on that ground.
Please note: the landlord must still give notice in time, and he can’t terminate earlier than as per the last day of the contract.
A diplomatic clause also contains the possibility that parties can decide to extend the lease for a new fixed period of time. At the end of that period the landlord has again the possibility to terminate the lease or to extend the lease another period of time, and so on.
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.
Beware: the other so called ‘diplomatic clause’
There is also a contractual clause that serves the interests of a tenant that is called a ‘diplomatic clause’. This is however a total different clause than the legal diplomatic clause for the landlord that we discussed hereabove.
In most cases, the diplomatic clause for the tenant will imply that the tenant can terminate the tenancy contract even before the anticipated and initially agreed date of termination of the contract. For example in case he will be transferred to a location further than, let’s say, 75 kilometres away from his current residence for work-related reasons. Such conditions will have to be interpreted in a strict way – should the tenant wish to relocate for private reasons, he will not be able to automatically invoke this ‘diplomatic clause’.
Questions? More information?
Having made it to the end of this article, you might now want to check if your rental contract has a diplomatic clause, for the landlord or for the tenant. If you are uncertain, get help from an expert.
If you have questions about the diplomatic clause, please feel free to contact us.