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There are several steps that tenants need to complete at the end of a retail lease. If you are a tenant, it is vital that you take the time to ensure that you correctly carry out these steps. Part of the end of lease process includes ensuring that you undertake all of the required redecorations and satisfy your make good obligations. Following this, the landlord will inspect the property to ensure that they are satisfied with the condition. If you have met all of your responsibilities under the lease, the landlord will return the security deposit or bank guarantee. This article provides a checklist for tenants who are approaching the end of their retail lease.

A Few Months Before the End of the Lease

Redecoration and Repair

Check your lease to see what your redecoration and repair obligations are. It Is common for leases to contain a clause that states the tenant must repair and redecorate at the end of the lease term. Repairing and redecorating can include:

  • repainting the walls;
  • replacing carpets; or
  • refinishing floorings.

If you are required to repair and redecorate, you must ensure that you understand the standard to which the works must be carried out. For example, some leases set out the quality, type and number of layers of paint that must go onto the walls.

Make Good Obligations

Check the make good clause in your lease to see what it requires of you at the end of the lease.Typically, your lease should allow for normal wear and tear, but will also usually require you to reinstate the condition of the premises to what it was at the start of the lease.

Your make good obligations may include:

  • removing any fittings and fixtures, you have installed for your fit-out or any other time during the lease term;
  • repairing any damage caused during the lease;
  • cleaning the property thoroughly.

If there is an existing condition report, you can refer to this to see the condition that you are expected to return the property to. It is essential to allow sufficient time to carry out these works before the end of your lease.

At the End of the Lease

Ideally, the make good works should be complete by the expiry of the lease. Additionally, any of your property should be removed from the premises. Often, leases contain a clause that gives the landlord ownership of your property if it has not been removed by the time the lease expires. In this case, the landlord can dispose of the property as they see fit.

When you have completed the redecoration and make good works, you should notify the landlord in writing. Typically, the landlord will organise a time to inspect the property. The inspection is intended to ensure that you have complied with your redecoration and make good obligations under the lease.

If the landlord thinks that you have not completed the make good works to the required standard, they may want to engage their contractors to do the work. The landlord may try and recover these costs from your bank guarantee or security deposit.

You should check your lease to see in what instances the landlord can undertake repair work on your behalf. In many cases, a landlord can call on the bank guarantee or security deposit without giving you any notice.

After the End of the Lease

Once you have satisfied all of your obligations under the lease, you should request the landlord return your bank guarantee or security deposit.

Your lease may specify a time frame for the return of the bank guarantee or security deposit. If your lease does not state a timeframe, the landlord should return it:

  • as soon as reasonably possible; or
  • in a timeframe specified in relevant retail lease legislation. For example, in New South Wales, the timeframe for return of the bank guarantee or security deposit is two months after the tenant has satisfied their obligations under the lease.

Key Takeaways

There are several steps that tenants need to take at the end of the lease. These steps ensure that the end of lease process runs smoothly. It is essential to check your lease and ensure that you are familiar with your end of lease obligations.

You should arrange a time to carry out redecoration, repair and make good works. Once this work is complete and you have satisfied all of your obligations under the lease, you should request the return of your bank guarantee or security deposit. If you have any questions, contact LegalVision’s leasing lawyers on 1300 544 755 or fill out the form on this page.

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