May 20, 2019

A make good is a critical component of any commercial lease and it is often overlooked when negotiating a Lease. So, what is a make good and why is it so important?

What is a Make Good?

A ‘Make Good’ is the works and repairs required under the Lease that are to be completed at the end of a Lease term, prior to returning the tenancy/premises to the Owner. These works and repairs can range from re-painting, patching walls, replacing carpet and lighting to servicing of equipment, gardening and removal of fit-out. There are many aspects to a make good and they vary from lease to lease.

Is your Lease protecting your property?

When signing a new tenant into a vacant property, there is always the desire to move quickly and make concessions to get a new tenant into a property, the clauses covering the make good within the Lease can often be brushed over and not be as strong as an owner requires.

It is important that time is spent getting these clauses right, to ensure that the property is left in a strong position at the end of the term when the current tenant leaves, which may be many years from when the original Lease is signed.

When and why is a make good completed?

It’s one of the last things to occur at the end of any tenancy, either in the last months of a term or just following the end date of the term, if allowed by the owner. Given the importance of a make good, it is also critical that your Property Management company ensures that both parties are aware of what is required to occur and that it is documented correctly within the Lease.

The main aim of the make good is to “yield-up” the premises to a state that it was when the tenant took occupancy of the premises that is stipulated under the Lease, save for fair wear and tear.

How can an expert Property Manager assist?

A good Property Manager spends the time with the solicitor drafting your Lease Agreement, with all clauses reviewed and accordingly adjusted, to ensure they are not just covering the works required but are also enforceable.

A good Property Manager will also carry out an initial Property Condition Report and document this prior to any tenancy commencing, which gives record of the property, to base any ‘Make Good’ works against in the future.

An expert Property Manager will also pay attention to ensuring servicing and maintenance is carried out on all aspects of a property/tenancy. Regular servicing of systems and general maintenance form part of maintaining a property and can assist in avoiding costly issues at the end of a Lease.

The Lever Property Team is available to discuss any aspect of how a make good works or how it can be applied.