Consider this if…
- Your lease is ending and the landlord has sent a make-good scope or claim
- You are being asked to strip a fit-out the landlord originally contributed to
- You want to know what your make-good exposure is before you sign
- You are negotiating a payment in lieu of carrying out the works
- You are a landlord and the premises have been handed back in poor condition
- You have vacated and a claim has arrived after the event
How it works
Send us the lease and the claim
The lease and any variations, the condition report or photographs from commencement if you have them, the fit-out approval, and whatever the landlord has sent.
Today
We work out what the obligation actually is
Make good, reinstatement, repair and redecoration are different obligations and leases frequently contain several of them pulling in different directions. The condition at commencement matters, and so does what was approved along the way.
With the review
We test the landlord's scope
Whether the items claimed fall inside the clause, whether fair wear and tear has been allowed for, and whether the landlord is seeking an improvement rather than a reinstatement.
With the review
You get a position in writing
What we consider is genuinely owed, what is arguable, and what we would propose — works, a negotiated settlement sum, or a defence to the claim.
With the review
We negotiate or run the dispute
Most make-good claims settle. Where they do not, the dispute follows the usual leasing path. Quoted stage by stage.
Quoted before we start
Fee
Quoted in writing before we start
GST inclusive
We quote a fixed fee in writing before any work begins.
The liability that arrives at the worst time
Make good is agreed years before it is performed. At the start it is one clause among fifty and it costs nothing to accept. At the end it is a builder's quote arriving in the same month as a relocation, a new fit-out and a bank guarantee the landlord is refusing to release.
That timing is why make-good claims settle badly. The tenant is under pressure, the landlord holds security, and the obligation is rarely as clear as the claim letter suggests.
Read the clause before accepting the scope
Leases use several different obligations, sometimes in the same document:
Reinstatement — removing the tenant's works and restoring what was there before them. Make good to base building — stripping the premises back to the landlord's shell, which can be more than reinstatement if the shell never existed in that form. Repair — keeping the premises in the condition described, usually subject to fair wear and tear. Redecoration — painting and finishes, sometimes on a stated cycle.
Where a lease contains more than one, they have to be read together, and the landlord's scope tested against the one that actually applies to each item.
The questions that decide the number
What condition were the premises in at commencement? A condition report or a set of dated photographs is worth more here than any legal argument. Without evidence, the argument becomes about assertion.
What was approved? Fit-out works approved by the landlord, and any written agreement about what happens to them at the end, frequently narrow the scope.
Who paid for the fit-out? A landlord contribution does not automatically exclude those works from make good. It should have, and in a well-negotiated lease it does.
Has fair wear and tear been allowed? Most claims are drafted as though it does not exist.
Is the landlord seeking betterment? Returning the premises to a standard better than the obligation requires is not make good; it is a refit at the tenant's expense.
For landlords
The same clause read from the other side. A claim is far easier to enforce where there is a condition report, approvals in writing, a schedule of the works required and a costed scope prepared promptly after handover. Where security is held, the terms on which it can be applied matter, and applying it incorrectly creates a second dispute on top of the first.
Getting it right at the start
The cheapest make-good outcome is negotiated before signing: capping the obligation, excluding landlord-funded works, agreeing a photographic condition report, and, where possible, agreeing a fixed sum payable in lieu. We deal with all of that as part of a retail or commercial lease review.
Frequently asked questions
What does make good actually require?
Whatever the lease says, which is why the clause has to be read rather than assumed. Common standards are returning the premises to base building, to the condition they were in at commencement, or to a condition described in a schedule. The difference between those standards can be very large in money.
Do I have to remove a fit-out the landlord paid for?
Sometimes, and it surprises people. A fit-out contribution and a make-good obligation are separate clauses, and unless the lease says the contributed works are excluded from make good, the tenant can be required to remove work the landlord helped fund. It is worth dealing with in the lease, not at the end.
Can I pay the landlord instead of doing the works?
Frequently, yes, by agreement. A payment in lieu can suit both sides: the landlord may be about to refit for an incoming tenant anyway, and the outgoing tenant avoids running a construction job while moving. What matters is that the release is documented and covers the whole obligation.
What is fair wear and tear?
Deterioration from ordinary use over the term. Where the lease excepts it — and most do — the tenant is not obliged to return the premises in better condition than reasonable use would leave them. It is one of the first things we test a claimed scope against.
The landlord's quote seems very high. Is that normal?
Opening scopes are often broad and priced at the top. That is not a reason to ignore the claim, but it is a reason to have it checked line by line against the clause and against the condition at commencement before anything is paid.
We have already moved out. Is it too late?
No, but it is harder. Evidence of the condition on handover is what most of these disputes turn on, so send us whatever photographs, inspection notes and correspondence you have, and do it before responding to the claim.
Related services
Photographs from the day you took the premises are worth including.
Send us the lease and the claim