1. Read the make good clause first
A make good clause sets out how a tenant must leave the premises at the end of the lease. Lawpath, an Australian legal services site, calls these clauses some of the most heavily scrutinised and contested parts of commercial leasing.
So read yours twice. Ask what “original condition” means. Ask whether you must remove the cabling, the partitions and the ceiling changes you add. Ask whether you can pay the landlord instead of doing the work. If the wording is vague, ask for it to be made exact now, while you still have bargaining power.
Commercial leases can run from 3 years to 25 years, so the day you hand back the keys may be a long way off. Write down what you agree today.
2. Record the starting condition
Photograph the space before you move in. Photograph it again during the lease and on the day you leave. Dated photos are cheap, and they are the best proof of what the space looked like at the start.
If you are taking over an existing lease, check what you inherit. Lawpath notes that a new tenant who takes an assignment generally takes the property as it is, and inherits the make good duties of the original tenant. That can include damage you did not cause. Ask for a written list of known defects before you sign.
3. Get landlord approval in writing
Some commercial leases prohibit certain alterations, or limit fixtures and structural installations. Lawpath advises checking with the landlord before you make changes, and keeping the landlord involved throughout.
Do not rely on a phone call. Send the plans and ask for consent by email or letter. The approval should also say what happens to each change at the end of the lease: stay, or be removed. A gap here is a common source of later argument.
Also ask your builder or designer whether the works need a council permit or a certifier. Rules differ by state and by site, so get that answer from the authority, not from a guess.
4. Settle the safety paperwork
A fitout can count as construction work, so work health and safety rules may apply to it. Safe Work Australia’s model Construction Work Code of Practice says a construction project is one where the cost of the construction work is $250,000 or more. Larger projects need a principal contractor. Check your contract to see who holds that role.
The code also lists high risk construction work, and a safe work method statement (SWMS) is required for it. One example is work with a risk of a person falling more than 2 metres. On a construction project, the principal contractor must be given a copy of each SWMS.
Ask every trade for its SWMS before it starts. Ask who is responsible for hazards such as asbestos in older buildings. The code lists the presence of asbestos and asbestos-containing materials among the hazards to consider, and it also notes the risk where different trades work in the same space.
The code says consultation is a legal requirement when construction work is carried out. Tell the building manager and neighbouring tenants when noisy or disruptive work is planned.
5. Lock in supplier timing
Furniture, joinery and glass partitions do not arrive on the day you want them. Ask each supplier for a delivery date in writing, and ask what happens if it slips. Check the date against your lease start, your rent-free period and the end of your old lease. A late delivery can leave you paying rent on two offices.
Plan the order of work too. Cabling and power go in before the ceiling closes. Painting comes before the carpet, and furniture comes last. Book building access and lift time early if the building has shared lifts.
6. Plan for the day you leave
Put the end of the lease in your calendar now. Lawpath says the landlord is generally responsible for major structural parts of the building, such as the roof and shared building systems, while the tenant usually looks after the premises themselves, including walls, floors and fixtures. Check that your lease agrees.
Review your insurance before you start work. Damage during a fitout can affect your make good duties, and Lawpath recommends reviewing insurance options before taking a commercial lease.
Keep every approval, plan, certificate and invoice in one folder. When the lease ends, that folder is your evidence.
Quick checklist
- Make good wording read and made exact.
- Starting condition photographed and defects listed.
- Landlord consent in writing, with end-of-lease treatment stated.
- Permit and certifier question answered by the authority.
- Principal contractor named and SWMS collected.
- Delivery dates in writing from every supplier.
- Insurance checked and records filed.
The limit of this guide: it is general information, not legal advice. Lease wording and state rules differ, so have a commercial lease lawyer read your lease before you sign.