Commercial leasing
Make-good obligations at the end of a lease.
Make-good is the clause tenants think about last and pay for first. Full reinstatement of a fitted-out tenancy can run into six figures, and landlords routinely claim more than the lease entitles them to. CMK Legal advises Melbourne tenants and landlords on what make-good actually requires, how to cap it, and how to resolve a claim at the end of the term.
Solicitor-reviewed
Clause interpretation and claims run by a commercial lawyer.
Fast turnaround
Advice ahead of expiry, while it can still be negotiated.
Fixed fee, quoted first
Fixed fee for make-good advice and negotiation.
Victorian leasing law
Experienced with VCAT make-good and damages claims.
What make-good means.
Make-good is the tenant's obligation at expiry or earlier termination to return the premises to a defined condition, often 'base building', 'original condition' or the condition recorded in a condition report, fair wear and tear excepted.
The scope depends entirely on the drafting: whether landlord-approved works must be removed, whether the fit-out becomes the landlord's property, whether painting, flooring, partitions, services and signage must be stripped, and whether a cash payment can be accepted instead.
Disputes usually arise because there is no condition report from handover, because the clause is ambiguous, or because the landlord claims the cost of works it never intended to carry out, for example where the next tenant will strip the space anyway.
Photograph and document the premises at handover and keep the landlord's approvals for every fit-out work. That evidence is what limits a make-good claim five years later.
Why make-good is worth dealing with early.
The cost is often negotiable down to a payment
Landlords frequently prefer a cash settlement to a strip-out that delays re-letting. A negotiated payment, agreed before expiry, is usually far less than the builder's quote attached to the claim.
A condition report caps the argument
Where the premises were handed over unfinished or in poor condition, a report proves it. Without one, the landlord's version of 'original condition' tends to prevail.
Landlords must prove actual loss
A claim for reinstatement costs where the landlord never carries out the works, or immediately redevelops, raises real questions about recoverable loss. That is often the strongest point a tenant has.
It can be limited at the start or at renewal
Capping make-good to a dollar figure, excluding approved works, or agreeing that the fit-out stays are all achievable at signing or renewal, and worth far more than arguing at the end.
Get advice on make-good if.
- Your lease expires in the next twelve months
- The landlord has issued a make-good notice or claim
- You are being quoted a large reinstatement cost
- There was no condition report at handover
- The landlord gave written approval for your fit-out
- The building is being redeveloped or re-let as is
- You are negotiating a new lease and want a cap
- You are a landlord preparing a make-good claim
Start six to nine months before expiry. Once you have vacated, your bargaining position weakens and the landlord holds the bank guarantee, which is often the first thing they call on.
How we handle make-good.
- 01
Read the clause
We work out precisely what standard applies, what is excluded and whether payment in lieu is available.
- 02
Assemble the evidence
Condition reports, handover photographs, fit-out approvals and plans are collected to define the baseline.
- 03
Assess the claim
Any landlord scope or quote is tested against the clause and against what the landlord will actually do.
- 04
Strategy set
We advise whether to carry out works, negotiate a payment, or resist the claim, with the numbers for each.
- 05
Negotiation
A settlement is put to the landlord and documented in a deed releasing you from further liability.
- 06
Bank guarantee released
We ensure the guarantee or bond is returned and the tenancy is formally closed out.
Fees for make-good advice.
Advice on your make-good obligation and on the strength of a landlord's claim is provided for a fixed fee. Negotiating a settlement and preparing the release deed is quoted separately, and contested matters at VCAT are staged with estimates before each step.
FAQs
Make-good FAQs.
Still unsure? Call us on (03) 9008 7224 and speak to a lawyer, not a call centre.
What does 'original condition' actually mean?
Do I have to remove a fit-out the landlord approved?
Can I pay the landlord instead of doing the works?
What if the landlord never does the work?
Can the landlord call on my bank guarantee?
How can I limit make-good in a new lease?
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Learn moreFacing a make-good claim?.
Start online or book a consultation with a CMK Legal commercial leasing solicitor in Richmond, Melbourne.