A make-good clause is an important part of a commercial lease, setting out the condition a tenant is required to leave the property in when their lease ends.
For both landlords and tenants, understanding these obligations early can help avoid unexpected costs and disputes at the end of the tenancy.
What does “make good” mean?
Put simply, make good refers to the tenant’s responsibility to return the premises in the condition required under their lease. Depending on the lease, this could include:
- Removing the tenant’s fit-out, signage, fixtures or partitions
- Repairing damage caused during the tenancy
- Repainting walls or replacing flooring
- Reinstating alterations made to the property
- Returning the premises to its original or base-building condition
- Cleaning the property and removing all tenant belongings
Not every lease has the same requirements. Some may only require the premises to be left clean and in good condition, while others can require a complete removal of the tenant’s fit-out.
Why is the condition report important?
A detailed condition report at the beginning of the tenancy can be extremely valuable when the lease comes to an end. Photographs and accurate records provide both parties with a clear reference point and can help determine what work is required before the tenant vacates.
Plan for make good before the lease expires
Make good shouldn’t be left until the tenant is ready to hand back the keys.
Reviewing the lease obligations well before expiry allows time for inspections, discussions with the tenant, obtaining quotes and agreeing on what works need to be completed.
In some situations, a landlord and tenant may also negotiate a financial settlement rather than the tenant physically completing the works.
How good commercial management helps
At My Agent Aus, we help manage lease expiries by reviewing tenant obligations, conducting inspections, communicating with tenants and coordinating the make-good process.
Planning ahead helps minimise disputes, reduce vacancy delays and ensure the property is ready for its next tenant.
Own a commercial investment property? Contact the My Agent Aus team to discuss how professional property management can help protect your asset.
*This article provides general information only and should not be relied upon as legal advice.