Understanding the Diplomatic Clause In Rental Agreement

November 9, 2020
Understanding diplomatic clause in rental agreement in Singapore

While most words deriving from ‘diplomacy’ are buzzwords that evoke a sense of exemption and immunity applicable to a chosen few, there would be at least one term that refers to duties rather than its privileges. Having a diplomatic clause in your rental contract can make all the difference, especially when you are the lessee. Let us have a look at the different scenarios where a diplomatic clause becomes vital.

The diplomatic clause in a rental agreement provides a solid framework, which makes it hard for lessors to terminate a rental contract any time they please. According to the basic principle of the diplomatic clause, the weaker party is the tenant. Most times, legislation regarding rental contracts is vital. Parties are not allowed to deviate from this legislation using any other agreement. The crucial character of this legislation is reflected clearly in the rules regarding the notice period while planning to terminate a lessee or contract.

Generally, temporary rental contracts automatically extend in the absence of giving prior notice before ending the mutually agreed first term. One adds a diplomatic clause in their rental agreement to prevent open-end-rental-agreement situations. Both the landlord and the tenant can benefit from this, especially the landlords if the tenant is unwilling to leave the property rented. In addition, these types of contracts also let the tenants have minimum rental protection.

Why is a Diplomatic Clause Crucial in Singapore? 

As we all know, no job in the world is permanent and secure forever. If you are currently working in Singapore, you should also consider the possibilities of getting a job transfer sometimes. In such situations, having to pay the rest of the money as per the contract would be a sure pain for you. This is the reason why including a diplomatic clause in your rental agreement is crucial.

The diplomatic clause is only applicable to expats in Singapore, and not Singaporeans.

Tenancy agreements in Singapore for two years is likely to include a diplomatic clause. A typical diplomatic clause would appear as follows:

  • A tenant can exercise the diplomatic clause if he/she/they has to leave the country due to job transfer or termination.
  • The tenant will have to give at least two months notice period, or else he/she/they will have to pay rent for the same period.
  • A tenant will have to stay at the place for a minimum of twelve months for the diplomatic clause to kick in. 
  • The tenant will also have to provide the evidence to prove the reason for relocation. 

Note that you have to be a tenant for twelve months to protect the interest of the landlord as well. What this means is that a tenant can only issue a notice after twelve months of stay at a place coupled with two months notice period. 

Usually, there is also an additional clause that comes along with the diplomatic clause, and it is called the reimbursement clause. It makes the tenant liable to reimburse the landlord of the agent fees on a pro-rata basis. However, you can always try to negotiate and reach a mutual consensus in the best interest of both parties involved.

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