There is a great deal of confusion about the two types of diplomatic clause
The diplomatic clause is a term you often come across when letting property, especially to expats. Below we explain the differences between a diplomatic clause for a tenant and one for a landlord.
Diplomatic clause for expats
As you know, at Riva Rentals we mainly let to expats: people from abroad who come to Rotterdam for a temporary project or assignment. That means we regularly encounter the diplomatic clause. Many companies will not rent accommodation unless this “escape clause” is included in the tenancy agreement. It allows a tenant to end the agreement during the normal contract term, provided they can demonstrate that they have been transferred for work and are obliged to move to another city or country. We call it an escape clause because the diplomatic clause is an exception to the restriction on terminating an agreement during the initial term. A diplomatic clause is included in 90% of the lettings we arrange, but in practice it is rarely invoked, so it is not something to worry about in advance.
Letting to expats without a diplomatic clause?
The escape clause remains a risk for landlords, but it is part of letting to expats. Some landlords are unwilling to accept this risk, which significantly reduces their potential tenant pool. Many expats in Rotterdam rent through relocation agencies that check contracts for the clause on behalf of their employers. In most cases, companies such as Shell, Unilever, BP, Petrobras and Glencore will not approve a tenancy agreement without a diplomatic clause.
Diplomatic clause for landlords
The term diplomatic clause is not used exclusively for expats. It is also sometimes used for landlords in the form of ‘interim letting’. This is a tenancy agreement within the meaning of Article 7:274(1)(b) and (2) of the Dutch Civil Code. Under so-called “interim letting”, the home is let temporarily because the landlord intends to occupy it personally again at the end of the contract. This is also referred to as a “diplomatic clause” and is a form of temporary letting. The owner’s permission is required and the interim tenant has limited security of tenure, meaning the tenant must vacate the property no later than the end date of the agreed rental period. The property may be let in this way to several successive interim tenants.
When is interim letting permitted?
This form of diplomatic clause is permitted only where the tenancy agreement states that the tenancy ends on the specified date and where the reason for temporary letting is that the owner or original tenant intends to live in the property again.
State the reason in the contract
The tenancy agreement must specify the reason for interim letting and the precise rental period and end date. The landlord must still terminate the agreement in accordance with statutory requirements. The interim tenant cannot give notice before the end of the agreed period unless this is agreed in writing. Please note: rent protection under the points system and limits on rent increases still apply!
Worry-free letting with a diplomatic clause
As mentioned, the clause is hardly ever used in practice. More often, tenants stay longer rather than leave earlier. If you would like Riva Rentals to let and manage your property, we would be happy to advise you personally on the rules and legislation governing expat lettings.