Lease agreements will often set out the obligations of each party at the end of the Lease term. One term which should not be overlooked is the ‘make good provision’.
What is a make good provision?
Make good provisions are included in lease agreements to ensure the premises is restored to its original state at the end of the term. These provisions usually require the tenant to undertake certain works at the end of the lease which may include repainting walls, removing any added fitouts, rectifying any damages, and replacing floor coverings.
Why are Make Good Provisions Necessary?
Make good provisions serve to safeguard the value and condition of the property for landlords. By clearly defining the obligations of the tenant in restoring the premises, these provisions establish transparency and set expectations for the post-lease restoration process. Landlords benefit from the reassurance that their property will be returned to its original state, ready for future use, sale or leasing.
Understanding Make Good Obligations
The scope and extent of make good obligations depend on several factors, including the nature of the premises (e.g., office, retail, warehouse), the condition and age of the property, and any alterations or modifications made by the tenant or landlord. These factors play a crucial role in determining the specific requirements to be outlined in the lease agreement.
Both tenants and landlords should carefully consider the make good obligations to ensure fair and accurate expectations. Tenants must be aware of their responsibilities, allowing them to budget for any necessary expenses associated with restoring the premises. On the other hand, landlords should ensure that the provisions are reasonable and reflective of the property’s condition at the beginning of the lease. Open and clear communication, along with mutual agreement on the make good obligations, can prevent disputes and promote a positive landlord-tenant relationship.
The Role of your Legal Advisor
Given the complexity of lease agreements and the potential financial implications involved, it is advisable for both tenants and landlords seek legal advice before signing the lease and when terminating the agreement. Ardor Legal is an experienced commercial and property law legal firm that can provide valuable guidance, advise on obligations and assist with enforcement of the lease terms where necessary.
Contact Ardor Legal for further advice and assistance on your commercial lease obligations.
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