When you lease a commercial property, there’s a good chance you’ll come across the term make good provision in your agreement. These clauses are commonly included in commercial leases across Sydney. The make good provision can result in significant cost and time implications for tenants at the end of their lease, if not handled properly.
In this article, we’ll unpack what a make good provision is, what tenants are usually responsible for, and how you can plan ahead to avoid any unwelcome surprises when it’s time to move out. If you’re an owner or building manager, it’s also important to understand your responsibilities, and what to expect at the end of a tenants lease.
What is a make good provision in commercial property?
A make good provision is a clause in a commercial lease that requires the tenant to restore the premises to a certain condition at the end of the lease term. It’s designed to protect the landlord by ensuring the property is left in a usable or re-lettable state for the next tenant.
The scope of a make good clause can vary greatly. It may involve simple cleaning and rubbish removal, or it may require a full strip out of all tenant-installed fixtures, finishes, partitions, and branding — essentially returning the property to its original ‘base building’ condition.
Why are make good clauses included in commercial leases?
A provision for make good helps landlords avoid the cost and hassle of returning a space to its original state once a lease ends. It ensures the incoming tenant isn’t left with an awkward fitout or damage caused by previous occupants.
These provisions also provide a level of certainty for both parties. Tenants know their responsibilities in advance, and landlords can plan future leasing activities with the assumption that the space will be left in a defined condition.
Common obligations under make good clauses
The specifics of a make good provision are usually outlined in the lease and can include requirements such as:
- Removing partition walls and fitout works
- Repainting walls to original colours
- Replacing worn carpet or flooring
- Restoring lighting or electrical to base building standards
- Removing data cabling and communications infrastructure
- General cleaning and rubbish disposal
- Completing any “make good provision AASB 16” obligations if the lease is treated as a right-of-use asset under accounting standards
Depending on the nature of your tenancy, these tasks can become extensive and require specialist input.
How landlords interpret make good requirements
Landlords often interpret make good clauses strictly — particularly when re-letting the property depends on it. While some may be flexible or willing to negotiate a cash settlement in lieu of physical works, others may insist on full compliance.
In some cases, landlords may engage their own contractors to complete the make good works and invoice the tenant, particularly if the tenant vacates without completing the obligations themselves. This is why clarity and preparation are essential.
How tenants can prepare for make good obligations
Planning ahead is the key to managing your make good provision effectively. Here are a few simple steps:
- Review your lease
Understand the specific wording of your provision for make good.
- Photographic records
Document the original condition of the property when you move in.
- Get advice early
The earlier you understand your responsibilities, the easier it is to budget and plan.
- Start planning 3–6 months before vacating
This allows enough time for quotes, approvals and works to be completed without delay.
- Use professionals
Engaging a company that specialises in make goods, like ours at Makegoods, ensures that all works are done properly and in line with your lease obligations.
Negotiating make good terms before signing a lease
You can often avoid disputes later by negotiating the terms of the make good provision at the beginning of your lease. For example, some tenants negotiate a cap on the value of the make good works or agree to leave the premises in “clean and tidy condition” rather than a full base building restoration.
Commercial tenant advisors can help you secure terms that reflect the nature of your tenancy and avoid overly onerous obligations. At Makegoods, we’re here to help if you find yourself in a sticky situation at the end of your lease.
Speak to our team about your make good provision
At Makegoods, we provide end-to-end make good and strip out services for commercial tenants across Sydney and surrounding suburbs. We understand the complexities of commercial leases, and we take the stress out of vacating your premises. We’re so good we’ll even guarantee you get your bond back.
Book a consultation with our team today.
FAQs about commercial make goods
What happens if you don’t comply with a make good clause?
If you fail to comply with your make good provision, the landlord may carry out the required works and charge you for the full cost — often without the ability to control scope or pricing. In some cases, it may result in disputes, withheld bonds, or legal action.
How much does the make good process cost?
The cost varies widely depending on the size of the tenancy, the condition of the property, and the extent of the obligations. A simple clean and repaint may cost a few thousand dollars, while a full office strip out could run into tens of thousands. That’s why a make good provision calculation is important in the early planning stages.
When should I engage a make good specialist?
Ideally, engage a make good specialist 3–6 months before your lease ends. This provides time for assessment, quoting, scheduling works, and meeting any building or landlord requirements — without rush or penalties.