At Coleman Greig we have seen many disputes in relation to make
good that could have been avoided if the parties had seriously
contemplated their make good obligations before entering into the
Is the tenant required to strip the premises back to an empty
shell? Is the tenant required to simply repaint and replace floor
coverings? If painting, how many coats and is it the inside or the
outside surfaces? If racking is removed, are bolts shaved to ground
level or are they to be grinded down and holes filled? What will be
the reference point to establish condition and how will
contamination be addressed? Will the landlord accept a sum of money
in lieu of make good and if so, how much? There are many more
questions along a similar theme.
While some of these questions may seem trivial, in our
experience costly disputes can arise because a lease does not
adequately address parties' responsibilities at the end of the
tenancy. So our advice to a landlord or a tenant when negotiating a
lease is to clarify and document precisely what they understand and
agree to be their make good obligations, so that there are no
arguments over interpretation at the time of making good the
Some common themes that keep emerging in this regard are:
When a tenant attempts to complete the make good themselves,
there may be a dispute with their landlord as to the quality and
standard of that work. This is particularly so if they have not
consulted with the landlord before doing that work. We suggest that
if a tenant wishes to do their own make good, they have clearly
articulated with the landlord as to what those works are,
tradespeople to be engaged, materials to be used, number of coats
of paint etc. We have acted on behalf of clients in a number of
disputes where the tenant has carried out works which are not
accepted by the landlord in accordance with the lease. In such
cases, a tenant leaves themselves exposed to not only the
additional costs the landlord incurs in completing the works in
accordance with the lease, but potentially rent for the period
during completion of the make good.
Given 1, we have found that parties increasingly are reaching
an agreement on a payment in lieu of the tenant actually attending
to the make good works themselves. If so, in our experience it is
important to begin the discussions about make good as early as
possible in order for the parties to reach agreement on this
settlement figure. This is because the parties will have to come up
with a common methodology of calculating this figure (eg based on
quotations for each task, if so how many and from whom, etc).
Often disputes arise between a landlord and tenant where the
landlord relies on a clause which says the tenant must return the
premises to the condition it was in at the commencement date.
However, what is that condition? The best way to address this is
for the parties to record the condition of the premises at the
commencement date of the lease.
Regardless of whether you are a landlord or a tenant, it is wise
to obtain legal advice in relation to clarifying your make good
obligations before entering into a lease.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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