Yes, make good clauses can be negotiated before signing a commercial lease to define the exact condition the space must be in at expiry. Negotiating these terms early prevents unexpected costs and disputes when handing back the keys.
The specific language in the lease determines whether you must return the space to a raw shell or its original move-in condition.
Difference between base build and warm shell
Base build condition requires stripping the space back to the structural slab and core walls. This is the most expensive obligation because it removes all partitions, ceiling tiles, and floor finishes.
Risks of as at lease commencement obligations
This requirement asks tenants to return the space to the condition it was in when they first moved in. Disputes are common here unless a lease commencement condition report exists to prove the original state.
Options for cash settlements
Some leases allow a make good equivalent payment instead of physical restoration works. This is a practical option for tenants with tight timelines or those whose custom fitouts would be expensive to strip out.
How a make good assessment helps negotiation
A professional assessment provides a clear scope of works and cost estimate based on lease obligations. Progressive Corporate can conduct this review to give you a solid budget for negotiations with your landlord.
Frequently asked questions
When should I start planning for make good?
Start the process 12 months before your lease expires. This provides time for a proper assessment and negotiation with the landlord.
What happens if I do not complete the works by expiry?
Landlords may engage their own contractors to complete the works. They typically charge these costs back to the tenant at a higher rate.
Is a full strip out always required?
No, landlords may agree to retain parts of the fitout or accept a reduced scope based on their future plans for the space.
Questions to ask your fitout company before you sign
- Which specific elements of this proposed design will be most expensive to remove under a full strip out?
- Can we use demountable partitions to reduce the time and cost of make good works at the end of the lease?
- What documentation should we capture during the fitout to ensure we can prove the condition of the space later?