Make good is the obligation in a commercial lease for a tenant to return the premises to an agreed condition at the end of the lease. In most NSW office, retail and industrial leases, that means removing your fit out, repairing any damage and handing the space back in the condition the lease describes. That is often the original or base building condition, allowing for fair wear and tear.
Make good works catch many businesses off guard, because the clause was signed years earlier and rarely read again until it’s time to move out. WasteWise Services carries out end of lease strip outs across Sydney for tenants, landlords and property managers. This guide explains what the obligation usually covers and how to plan for it.
This article is general information only. Every lease is worded differently, so check your specific clause with your solicitor or leasing agent.
Where to Find Your Make Good Obligations
Start with the lease itself. The obligation usually sits in a clause headed make good, reinstatement, yield up or end of lease obligations.
It’s also worth pulling out:
- Any condition report, photos or schedule of dilapidation from the start of the lease
- Fit out approvals or landlord consents for works you carried out
- Lease variations, renewals or side letters that change the original terms
- Building or shopping centre rules that apply to works in the tenancy
Together, these documents show what the space looked like when you moved in and what you agreed to put back.
What Make Good Works Usually Include
The scope depends on your lease, but make good works commonly involve:
- Removing partitions, offices, workstations and joinery
- Removing kitchens, counters, shelving and signage
- Disconnecting and removing tenant lighting, cabling and data
- Reinstating ceilings, lighting and flooring to the required standard
- Patching and painting walls
- Repairing damage caused during the tenancy
- Removing all rubbish and leaving the space clean for inspection
Original Condition, Base Building and Shell Explained
Leases describe the handback condition in different ways, and the wording can change the scope of work a great deal.
Original Condition
The space goes back to how it was when your lease started. If you took over an existing fit out from a previous tenant, that may mean leaving some of it in place. A condition report from the start of the lease is the best evidence of what original condition looked like.
Base Building Condition
The space goes back to the landlord’s standard finishes before any tenant fit out. In an office, that usually means a standard ceiling grid, lighting, painted walls and floor coverings, with base building services left in working order.
Shell Condition
The tenancy is stripped back to its bare structure, with finishes and tenant services removed to an agreed point. This is the most extensive handback and is common in retail tenancies where the next tenant builds their own fit out.
Fair Wear and Tear
Most leases allow for fair wear and tear. That covers the normal ageing of a space through ordinary use, such as faded paint or carpet worn along walkways.
It doesn’t cover damage. Holes left by removed fixtures, broken ceiling tiles and burnt or water damaged flooring usually form part of the make good works.
Who Pays for Make Good Works
In most cases, the tenant is responsible for the cost of their own make good works under the lease.
Sometimes a landlord will agree to a different arrangement. A new tenant may want to keep the fit out, or the landlord may accept a cash payment in place of the works. Any arrangement like this should be agreed in writing before you plan the strip out.
If make good works aren’t completed, many leases allow the landlord to carry out the works and recover the cost from the tenant. That can include drawing on a bank guarantee or security deposit.
When to Start Planning
Leave make good works too late and you risk running past your end of lease date. As a guide, start planning three to six months before you move out.
- Read your make good clause and gather your original condition records
- Ask the landlord or agent to confirm their requirements in writing
- Walk through the space with the agent to agree what stays and what goes
- Check the asbestos register, which workplaces in buildings built before 31 December 2003 must have
- Book your strip out contractor early, allowing for building access rules, lift bookings and after hours work
- Leave time for a final inspection and any follow up works before handover
Make Good vs End of Lease Strip Out
The two terms overlap. An end of lease strip out is the physical removal work, such as taking out partitions, ceilings, flooring and fixtures. Make good is the broader obligation, which can also include repairs, painting, reinstatement and cleaning.
For most office and retail tenancies, the strip out is the largest part of the make good works. Our guide on what happens during an office strip out walks through the process step by step, and our office strip out cost guide covers what affects pricing.
How WasteWise Services Helps With Make Good Works
Our end of lease strip outs are completed with make good obligations in mind. We remove non structural walls, ceilings, flooring and internal fixtures, disconnect and remove lighting, cabling, joinery and counters as per lease terms, and finish with waste removal and a site clean-up ready for landlord inspection.
We work across offices, retail shops, warehouses and other commercial properties, and we schedule work to meet tight lease deadlines. Clear planning and communication help us meet timeframes without cutting corners.
Frequently Asked Questions
Does make good always mean returning the space to original condition?
No. It depends on how your lease is worded. Some leases require original condition, others require base building or shell condition, and some list specific works.
Is make good the same as an end of lease strip out?
Not exactly. The strip out is the removal work. Make good is the full obligation, which can also include repairs, reinstatement and cleaning.
Can make good obligations be negotiated?
Often, yes. Landlords sometimes accept a cash settlement or agree to keep part of the fit out. Get any agreement in writing before works start.
What happens if make good works aren’t done?
Many leases allow the landlord to complete the works and recover the cost from the tenant, including from a bank guarantee or security deposit.
How early should I book a make good contractor?
As early as you can. Starting three to six months out gives you time to confirm requirements, book building access and finish before handover.
If you’re moving out of a commercial space in Sydney, our team is ready to help you plan the strip out. Get a quote or call (02) 9188 8899.