For over a year, BRM has been providing strategic property guidance and planning for Melbourne’s Jewish Holocaust Centre. While every property client is a valuable experience in itself, this project was meaningful in a different way…
A “Make Good” clause refers to the tenant’s obligation, when reaching the end of the lease term, to ensure that they ‘make good’ the premises before leaving. This is a standard clause of most commercial leases requiring the tenant to return the property to the landlord in either its original or existing, clean and tidy state.
Make Goods exist to allow the tenant to exit the premises in a way that’s fair to both parties, by specifying works and obligations that should be undertaken by the tenant upon leaving. However, Make Good clauses are not always drawn up fairly. Sometimes they can be too ambiguous or irrelevant to the specific premises. In some cases, tenants will hurry to sign a lease after negotiating more pressing matters such as term and possession, pushing the Make Good clause aside until the end of the lease. The tenant may then be shocked at what they are required to do, leading to a dispute with their landlord.
So how should you handle a Make Good clause as a commercial tenant? And what steps can you take to ensure a smooth leasing process and handover?
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