At the end of the lease, a tenant has a general obligation to put the premises back into the same condition it was in at the beginning of the lease. Make good clauses may go beyond this and put an obligation on the tenant to do extra work to bring it to a standard that the landlord requires.

As a tenant, you need to make sure that you understand what obligations the make good clauses will put on you. It is very easy to focus on negotiating the rental costs, term of the lease and possession but tenants often forget to think about the end of the lease. If you don’t investigate the make good obligations thoroughly, before you know it the lease period will be ending and you’ll be clamoring to make repairs and painting and forking out excessive amounts of money.

This can be avoided if you negotiate these make good clauses in the beginning, or at least have a good understanding of what is required of you at the end.

The main issue with make good clauses is when they have been written poorly. It is often the case that the make good clauses are too vague or too general for either the landlord or the tenant to clearly understand what is expected. You need to be careful of broad and general make good terms, as they may place more obligation on you than necessary.

If you aren’t able to take out the make good obligations in negotiation with the landlord, make sure they are written in a way that makes it clear what you will need to do at the end of the lease. Keep in mind aspects such as fair wear and tear, which is important for you to include.

One option you may like to consider is a cash settlement instead of make good obligations. The benefit to you is that it means at the end of the lease you don’t have to spend the effort in repairing or whatever work is necessary, you just need to vacate the premises and leave the premises in a clean and tidy state. It is helpful to add this in the lease whether or not there are make good clauses.

Some Tips

Whether or not there are make good obligations written in the lease, it is important that you are on top of things throughout the lease period. You should record and keep evidence of the condition of the premises at the beginning of the lease in the event of any dispute.

If you are still negotiating the lease, make sure you understand what your make good obligations are. If they are phrased too broadly, negotiate with the landlord to make the clauses specific and to cover issues such as fair wear and tear.

Remember that you need to make good before the end of the lease, so plan ahead! If you know that the end of your lease term is coming up and you are not planning to renew it, start thinking about what needs to be done to fulfil your obligations under the contract and under common law.

Lachlan McKnight

Next Steps

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