In the realm of commercial leasing, ‘make good’ clauses are often overlooked—until the lease ends and the costs begin to mount. These clauses define the condition in which a tenant must return the premises, and misunderstanding them can lead to costly disputes or unexpected liabilities. At Ensure Legal, a Brisbane-based commercial and property law firm, we work with both landlords and tenants to clarify these obligations and resolve conflicts when they arise.
What Is a ‘Make Good’ Clause?
A ‘make good’ clause sets out the tenant’s duty to return the leased property in a specified condition at the end of the lease term. This might involve:
- Removing installed fixtures and partitions
- Repairing damage caused during the tenancy
- Repainting, recarpeting, or deep cleaning
- Returning the premises to an original or “base building” condition
The scope of these requirements varies significantly between leases, and the wording used in the clause is critical.
Legal Position in Queensland
Under the Property Law Act 1974 (Qld), tenants are typically required to return the premises in “good and tenantable repair,” taking into account the condition at the lease’s commencement—excluding fair wear and tear or damage from events like flood or fire. However, lease terms can override these general rules. Many leases impose more detailed and demanding make good requirements, which become legally binding once signed.
Common Sources of Dispute
Disputes over make good duties are common, especially when:
- The lease terms are vague or contradictory
- No initial condition report was prepared
- The landlord and tenant disagree on what “original condition” means
- The tenant has made extensive fit-out changes and is unsure what must be removed
These situations can escalate quickly if not managed early and with proper legal advice.
Reducing the Risk of Conflict
To avoid disputes and reduce legal risk:
- Always include a detailed condition report with photos at the lease start
- Clearly define the make good obligations in the lease
- Engage in open dialogue well before the lease ends
- Seek legal review of make good clauses before signing any lease
If disagreement still arises, mediation through the Queensland Small Business Commissioner (QSBC) is available for lease disputes up to $750,000.
How Ensure Legal Can Help
At Ensure Legal, we help clients manage and resolve make good issues by offering:
- Lease reviews focused on make good and exit obligations
- Negotiation support and dispute resolution strategies
- Representation in mediation or QCAT proceedings
- Drafting of deeds of surrender or settlement agreements
Our goal is to protect your commercial interests and minimise costly surprises at the end of a lease.
Contact Us
If you’re facing questions or disputes over make good duties, contact Ensure Legal today. Our experienced Brisbane team is here to help you navigate lease exits with confidence and clarity.
