The contract is to define and fulfill the obligation and this may not be fully on a tangible financial ground. Also in every single agreement there is a risk involved. Here, this is also the tenant who takes the risk of premature termination of the contract (within the initial period) so IMHO all together it is reasonably balanced and I don't think the court will see it very differently.carteki wrote: In general, a diplomatic clause allows the tenant to break the lease agreement after 50% of the time has passed with little / no penalty to the tenant. As a result of the diplomatic clause the LL bears the WHOLE cost of the broken contract. We've seen on the forum instances where the LL has not allowed a replacement tenant. It is unlikely that the courts will uphold this attitude as the purpose of the contract is to protect against financial losses
I think it is very much to the agreeing parties (individuals). With a few TA executed already I have never felt that the diplomatic clause is of any serious concern to my LLs. It is not to that extent that I am PR and still have it in our current TA. As I said, I think it fairly balances the risk between the landlord and the tenant especially for the non-residents. If under the specific circumstances of your friend / her LL she found it beneficial than of course it was desirable to trade the clause off for some other benefits but I don't think it is generally advisable and justified to recommend this approach.carteki wrote: And the result of my friend's negotiation? Well the rent remained unchanged, but the diplomatic clause was removed.
Interested to hear your thoughts and ideas on this.
As I read through your post my thought was that I bet the LL would respond in the same way if you suggested a discount for foregoing the DC.carteki wrote:During the discussion I thought about the diplomatic clause and suggested to her that as part of the negotiations this had very little value to her and that she should tell the LL that she'd remove it from the contract. Shock - horror - no - I couldn't do that - was the initial response, but once I'd talked it through it made sense.
carteki wrote: And the result of my friend's negotiation? Well the rent remained unchanged, but the diplomatic clause was removed.
Disagree - the rental remained unchanged from the original contract rental. We've heard tales of 50% increases on the board, so in my mind it is a gain.JR8 wrote:carteki wrote: And the result of my friend's negotiation? Well the rent remained unchanged, but the diplomatic clause was removed.
So the attempt to negotiate for mutual benefit ended with the LL alone getting any gain? Hmmm, not very successful then!![]()
OIC, I'd missed that point. I think a problem though if you're being analytical is that you cannot know if the rent would have been raised, dropped or left the same anyway. Given the financial dung that is going to hit the fan in the coming year or more, maybe a locked-in term of two years at current prices looks like a win-win prospect to the LL?carteki wrote:[
Disagree - the rental remained unchanged from the original contract rental. We've heard tales of 50% increases on the board, so in my mind it is a gain.
Did you throw in your old porn collection as a 'deal-sealer'?!JR8 wrote:A sidenote:
The last lease I had in SG, I recall discussing a DC but I now see it never ended up in the final version of the agreement.
What we did get though was a clause for a rent review after one year of the two year term. Which in the event resulted in a c.15% cut in what I paid.
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In London where I own a handful of long-term rentals, as a rule of thumb rent goes up for existing tenants at RPI (Retail Price Inflation). Only once a tenant leaves does it gets rebased by marking-to-market. Rent never goes down, though I did give my tenants a holiday off the annual review in 2008/2009 due to us all bearing the pain.
This means I have reliable and happy long-term tenants who in general are paying under market, and they know it (even if they act blur), and I know that they know
I have nil voids, happy tenants who don't dick me about, and make sure they don't prejudice their position by always paying rent on the nail.
Perfick, I reckon
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