Everything You Need to Know About the Make Good Clause

When leasing office space in Brisbane CBD, one of the most important yet often overlooked components of a lease is the Make Good Clause.

This clause outlines the condition in which a tenant must return the premises at the end of their lease. While it may seem like a future problem, misunderstanding make good obligations can lead to significant and unexpected costs.

Getting clarity on this upfront is critical to avoiding disputes and protecting your business financially.

What Is a Make Good Clause?

A make good clause defines your responsibility to restore the tenancy at lease expiry.

Depending on the agreement, this can range from:

• Leaving the space clean and tidy
• Reinstating it to its original condition
• Fully stripping out the fit out and returning it to base building

The level of obligation will vary based on:

• How the space was delivered (fitted or unfitted)
• The landlord’s leasing strategy
• The negotiated lease terms

Why It Matters

Make good is one of the most common points of negotiation between landlords and tenants.

Without a clear understanding, tenants may face:

• Unexpected end-of-lease costs
• Operational disruption during exit
• Disputes with landlords

The key is to ensure all expectations are clearly documented before signing the lease.

Common Types of Make Good Clauses

1. Removal of Tenant Property Only

This is the most basic form of make good.

Tenants are required to remove:

• Furniture
• Equipment
• Loose items brought into the space

The tenancy is typically left in a clean and tidy condition.

This type of clause is relatively low cost and straightforward to manage.

2. Return to Original Condition

This obligation goes a step further and requires the tenancy to be returned to the condition it was in at lease commencement.

This may include:

• Professional cleaning
• Carpet cleaning
• Repainting walls

The condition is usually referenced against an entry condition report and allows for fair wear and tear.

This is commonly applied to spaces with a landlord-provided fit out, particularly spec fit out suites.

3. Full Make Good (Base Building Reinstatement)

This is the most comprehensive and costly form of make good.

Tenants are required to:

• Remove all fit out elements
• Strip back fixtures and finishes
• Reinstate base building services such as air conditioning and lighting
• Return the space to a “warm shell” condition

This process can be complex and requires coordination with contractors and building management.

Typical cost estimate:

• Approximately $200 – $300 per sqm, depending on the size and complexity of the fit out

Planning and budgeting for this early is essential.

4. Cash Settlement

In some cases, tenants and landlords agree on a fixed cash payment instead of completing the physical make good works.

This allows:

• The landlord to manage reinstatement directly
• The tenant to avoid coordinating works at lease expiry

This option can provide certainty around costs but must be negotiated upfront.

How to Protect Your Business

Before committing to a lease, it’s important to:

• Review the make good clause in detail
• Understand the scope of required works
• Request a clear condition report at lease commencement
• Negotiate terms where possible
• Budget for end-of-lease costs early

Engaging a leasing specialist can also help ensure the clause is fair and aligned with market standards.