Make Good

Commercial End of Lease.

“Make Good”

The make-good provision in a commercial real estate lease is often the most contentious part of any contract. It’s a standard inclusion to return a premise back to its original condition when first rented, regardless of any improvements performed in the meantime. With office fit-outs costing anything up to $2,000 a square and possibly include all the latest technology, it could be a costly exercise. It certainly can be a debatable area, as It depends how well it’s all been documented in the lease as there are so many ways a make-good can be triggered.

Make-Good is the major difference between commercial and residential property. At the end of a residential lease, a property inspection report is carried out. At the end of a commercial lease, there’s no report, just the make-good. “The legal responsibility is to return it to the condition it started out in, in the lease.

 

What are the requirements from a tenant at the end of a Commercial Lease;

  • Demolish and remove all partitions, fixtures, joinery, installations.
  • Disconnect and remove all redundant power, data, lighting including cabling back to base.
  • Remove nonstandard floor and ceiling finishes.
  • Reinstate carpet, ceilings, services.
  • Repair any damage caused.
  • Apply to council for Complying Development Certificate.
  • Follow building rules.
  • Certify all works according to landlord requirement.
  • Complete and handover within a suitable time frame to avoid delay.

 

Steps for tenants to start the process of the Make Good

  1. Request a scope of works from your landlord. Give them a reasonable timeframe to get back to you and ensure you get a response.
  2. Negotiate that scope down to something you consider reasonable.
  3. Put it out to the market with makegood providers ensuring that they price the scope completely and have a proven track record of carrying out makegoods.
  4. Get your prices back and compare, ensure you take special note of any exclusions and time frame required.
  5. Your landlord may provide you with a settlement figure (cost to walk away without carrying out a makegood). It’s up to you which commercial decision you should make, however carrying out the makegood yourself could save you a considerable amount of money.
  6. Select a contractor at least a week before you need to get started to give them time to prepare.
  7. Ensure they complete on time to avoid paying unnecessary extra rent.

 

What can we do to help?

Short answer to what we can do to help is basically “Everything” We offer a complete “Turnkey” solution to your End of lease: Make Good with minimal fuss to the tenant or Landlord as possible.

  • Negotiating with Landlords
  • Legal Issues
  • Dilapidations Reports
  • Council Permits
  • Architectural Work
  • Project Mangement
  • Demolition
  • Plumbing, Electrical, Heating and Cooling
  • Walls, Partitions, Carpets and Ceilings
  • Supply and Installation of Shopfitting / Cabinetry
  • Painting
  • Handover to Landlord

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Contact us to book a first free consultation: +61 400 800 746

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