The ‘make good’ clause is a staple of every tenancy agreement for commercial or retail properties. It is just two words, yet many problems and unnecessary headaches can come when you don’t understand it. Ambiguous or vaguely-worded ‘make good‘ clauses have caused many disputes between the tenant and the landlord on the tenant’s exit. So, it’s best to understand what it means before you put your signature on the agreement.

Well, that’s why you came here, and we’ll be sure to clarify everything. This article will tell you all you need to know about the clause to prevent unnecessary stress when you want to leave the property.

The ‘Make Good’ Clause: What Does It Mean?

The point of a ‘make good’ clause is simple. It is an inclusion in the tenancy lease that requires the tenant to return the property to its original state at the end of the lease term. This usually includes clearing out their properties, making the place clean and tidy, and repairing damages.

However, non-retail commercial leasing isn’t regulated as much as residential leases in Australia. This means that things like the ‘make good’ clause have to be agreed on by the landlord and tenant.

What Happens If A Tenant Breaches The ‘Make Good’ Clause?

At times like this, you, as the tenant, are on the losing end. The landlord may decide to sue you for any loss they incur due to your inability to comply. They may also take another route and withhold your security deposit if you paid any. Some landlords may not be satisfied with that, so they could withhold it and still sue. Nobody wants that.

How Do I Prevent This From Happening To Me?

Maybe you’ve heard some horror stories about ‘make good’ clauses, and you want to cover all the bases. These cases are pretty messy, and it is prudent to steer clear of them. The best time to do that is at the start of your lease.

You should know exactly what the clause entails. These clauses aren’t general. They are specific to the landlord and the property you’re occupying. If there is a point that isn’t clear to you, ask for clarification. If your clause is too demanding and would cost you a lot of time and stress, you should probably let that go. Yes, it’s functional, but you should think about the future.

Types Of ‘Make Good’ Clauses

These clauses can take different forms depending on the landlord, so you should keep your eyes peeled. They include:

  • Removal Of Detachable Property Only.
  • Removal Of All Properties And Basic Repairs.
  • Return The Premises To A Standard Shown In A Condition Report.
  • Return To Base Building Standard

These clauses come with obligations of increasing difficulty and cost. Removing detachable property is relatively easy to undertake, but returning to the base building standard is expensive. You’d have to keep that in mind.

These clauses help protect the landlord from damages to their property, but they may be taxing for the tenant. However, you can try negotiating with your landlord for better ‘make good ‘ terms. We hope you enjoy your new property.