Somewhere in your commercial lease is a clause about the condition the tenancy must be in when you hand it back. Most tenants read it once, at signing, and meet it again a few weeks before the lease ends, when it has become a deadline with trades, approvals and a landlord’s inspection attached. Leave it late and the last weeks of a lease turn into the most expensive ones.
At Office Fitout Professionals (OFP), a Balcatta-based registered builder (BP12706), the works side is covered on our office defits page: what gets removed, how services are made safe, how the strip out is sequenced. This guide is about the other side, the lease: what the clause usually asks for, what can be negotiated, and how to time it so the handback and your bank guarantee go smoothly. We see the clause from both ends, because the same team hands tenancies back for outgoing tenants and prepares them for incoming ones. Your lease and your agent are the authority on what’s required; treat this as the questions to ask them.
Key Takeaways
- A make good clause sets the condition the tenancy must be in at handback, usually the condition you received it in or a base building standard, and the lease wording decides which.
- The condition report or photos from the start of your term are the benchmark; without them, the landlord’s view of “original condition” is harder to argue with.
- Many landlords will negotiate: keeping a fitout the next tenant can use, or agreeing a settlement instead of works, both of which change what you spend.
- The handback date doesn’t move, so the works are planned back from it, with building access, approvals and the landlord’s inspection all inside the lease term.
- OFP is registered with the Builders Registration Board of WA (BP12706) and CM3 pre-qualified, and covers all tenancies and make goods.
Reading the make good clause
The clause goes by several names, make good, reinstatement, de-fit or redecoration, and the wording matters more than the name. Three things to find.
The standard: some leases ask for the premises as they were at the start of the lease, some for a defined base building condition, and some only for the removal of what you installed with damage made good.
The benchmark: a condition report, schedule of condition or set of photos from commencement, which is what any dispute will come back to.
The exceptions: many leases exclude fair wear and tear, and some let the landlord elect to keep parts of the fitout rather than have them removed.
If your lease has none of these, ask your agent or lawyer what the landlord expects before you scope anything, because a strip out to base building and a tidy-and-paint are very different jobs. The difference is real: Joondalup House was a full demolition and make good to a warm shell across about 1,000 sqm; a lease that only wants your partitions and paint gone is a fraction of that.
What can be negotiated?
A make good is an obligation, but the scope is often a conversation. An incoming tenant may value the partitions, kitchen or floor coverings you installed, and the landlord can agree to leave them and remove them from your scope. Some landlords prefer a settlement in place of works, so they can run their own refurbishment or offer the space as a warm shell to the next tenant. We do that side too: at 46 Parliament Place, JLL had us upgrade the amenities and rework existing fitout areas into two tenancies ready for new occupants, and for Quintessential, building management had us fit out a tenancy with no tenant signed, from cold shell to furniture, so it could be leased turnkey.
Either way, get the agreement in writing before the strip out is scoped, because it changes the cost. Where the works go ahead, an itemised quote covering the building works and each trade is your evidence of what the make good is worth, and useful if a settlement is on the table.
Timing it back from the handback date
Work backwards. The landlord’s inspection has to happen before the lease ends, so the works have to finish before that, and access to the building, after-hours windows for noisy work and any approvals have to be booked before that again. Start the conversation with the landlord well before the final months, scope the works once the landlord’s position is known, and give the contractor your handback date rather than your lease end date, because they are not always the same day. If you are relocating, line the make good up with the new fitout so the business isn’t paying two rents longer than it must; because OFP does both, the old tenancy and the new one run as one programme with one team.
When a make good isn’t the answer
Not every lease end needs a de-fit team. If your lease only asks for minor reinstatement, or the landlord agrees to keep the fitout or settle instead, a full strip out may be unnecessary, and we will say so at the first visit. The works that remain, from partition removal and painting to flooring and services, are described on the office defits page, scoped by the people who will do them, which generally means fewer variations and a cleaner inspection.
Frequently Asked Questions
What is the difference between “original condition” and “base building condition”?
Original condition means the tenancy as it was when your lease began, which may already have included a fitout. Base building means the landlord’s shell with services, before any tenant fitout. Your lease names one of them; the condition report shows what it looked like
Can the landlord keep our fitout instead of making us remove it?
Often, yes, if the next tenant can use it. Some leases give the landlord that election; otherwise it is negotiated. Ask before the strip out is scoped, and get the answer in writing.
What is a settlement in lieu of make good?
A payment to the landlord instead of the works, usually based on what the make good would cost. An itemised quote gives both sides a number to work from.
Who inspects the make good?
The landlord or their agent, against the lease and the condition report, before the handback date. A walkthrough with your contractor beforehand catches what they will look for.
What happens if the works run past the handback date?
The lease, not the contractor, decides that, so check its holding over clause. The practical answer is to start early enough that the question never arises.
Get an Itemised Make Good Quote
OFP carries out de-fits and make goods across Perth and Western Australia, for tenants handing back and landlords preparing the next tenancy. Our in-house team covers the whole scope, from removing partitions and painting walls to repairing floor coverings, so the tenancy goes back as you received it. Each quote breaks down building costs and individual trades, so you know what it will cost. Request a quote or call (08) 6465 4900.