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Last updated: 22 Nov 2000
THE DIPLOMATIC CLAUSE & ILLEGAL TENANTS
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The diplomatic clause in Singapores lease agreement is really a one-sided advantage for the expatriate Tenant as the Landlord has no similar option to terminate the tenancy.
There are numerous cases where the
diplomatic clause is used to break lease in order to benefit by living in newer housing or
Questions of one- or two-year lease
or one-year plus one-year extension are answered in correspondence below. Such FAQ are
important to relocating expatriates.
DIPLOMATIC CLAUSE IN MOST 2-YEAR LEASE AGREEMENT IS WRITTEN AS FOLLOWS:
In the event that Mr S E, who is occupying the demised premises at the commencement of the tenancy is deported from Singapore, refused permission by the Singapore Government to reside in Singapore, or transferred or relocated from Singapore to another country, or is no longer in the employ of the Tenant, the Tenant shall, subject to satisfactory documentary evidence to be given to the Landlord, be at liberty to terminate the term hereby created upon giving to the Landlord two (2) months' notice in writing or by payment of two (2) months' rent in lieu of notice, provided twelve (12) calendar months shall have lapsed from the date of commencement of this Agreement and upon the expiry of any such notice, this Agreement shall cease and determine but without prejudice to the rights of the Landlord in respect of any antecedent breach by the Tenant of any of the terms and conditions hereof.
2. If we take a one year lease, but close to its expiry that realise we will be staying in Singapore another year, can we not simply roll over the lease for another year?
Yes if the lease has a one-year option to extend at "rentals to be agreed upon by the Tenant and Landlord" (standard clause). In my opinion, this option is redundant, because the Landlord may ask for a much higher rental just to get rid of the Tenant who will not be able to afford the new rent.
3. What are the laws regarding rent increases:
No, if the Tenant remains the same. However, if there is an assignment, the Landlord may or may not increase/decrease the rent.
b) if we take a "2-year lease with the diplomatic clause in our favour" would that mean the rent could not increase over the 2 year period?
The Landlord will insert this in this one-year extension clause that the rent for the extension will be at a rent to be mutually agreed. This is standard practice. The following scenarios will happen:
|1. If the
Landlord has no better offers, the Landlord will accept the same or decreased rent from
the existing tenant.
2. If the Landlord feels that he may have better offers. he may just ask for a small rental increase in the new lease. If the Tenant disagrees, the Landlord may withdraw the offer.
3. Sometimes, some misunderstandings occur during the one-year lease and the Landlord simply will not renew the lease at the same rent to the existing Tenant.
4. At other times, the Landlord may wish to vacate the unit to live in or to sell. It is easier to sell without tenancy if the prospective Buyer wants to live in it.
5. If someone gives a better offer, you have to vacate at the end of the 12th month.
Therefore, the best recommendation is to take a 2-year lease with the diplomatic clause.
For more information on the rental apartments or to make appointments for a FREE house-hunting for expats relocating to Singapore, email Judy Quek, tel: +65 9668 6468.
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