When a commercial lease is finished, it’s usually the obligation of the departing tenant to return the building back to its original condition. This is what’s referred to as an end of lease make good, and it involves removing all furniture, fixtures, fittings, and modifications that may have been installed by a commercial tenant.

When a commercial tenant moves into a premises, it’s often given a basic and empty building: it’s a shell. The business can then make modifications to the building as needed. It may paint it to suit its brand, install features that are needed for its business operation, and even put up walls and partitions so it can use the building as it’s needed. When a lease is finished, the old tenant is expected to remove these things.

Usually make good obligations are outlined in the commercial lease. That is, what the tenant is expected to do, what it doesn’t need to do, and any other agreements around finalising the commercial lease and returning the building back to its original state. Of course, this may include negotiations with the landlord that allow the tenant to keep some of the modifications in place without having to pay to remove them.

But generally speaking, a commercial contract will outline that a tenant can either settle with the landlord for a fee, making it the landlord’s responsibility to return the building to its original state; or the tenant can complete the make good themselves, either organising their own tradespeople or using a professional commercial builder to complete the end of lease make good.

For a lot of businesses, they may find simply settling with the landlord the most convenient option. There are a lot of things to do when relocating a business, and the last thing an operations team wants to do is try and get their old premises back to its original state. Settling with the landlord is a fast and easy option, and one that may be suitable if there’s more budget than there is time and other resources.

However, for businesses that choose to organise their own end of lease make good, there is the opportunity to save a lot of money, and if they hire a builder to do the work, save just as much hassle as settling with the landlord.

A business’ operations team may think the only way to save money on make good obligations is to organise all aspects of the make good themselves, but this simply isn’t true. Settlements with the landlord are always going to be in the landlord’s favour, so it’s generally going to be the most expensive option when it comes to finalising a commercial lease. Of course money can be saved by a business managing a project themselves, using a commercial builder is still going to be a less expensive option than settling with the landlord.

If your business is going to be ending a lease soon, it’s worthwhile talking to us to find out how we can help with end of lease make good obligations. You may be surprised at how reasonable it all comes to.