05 Nov The Importance Of Office Make Good Lease Clauses and How To Make Good At The End Of Your Lease
The Importance Of Office Make Good Lease Clauses and How To Make Good At The End Of Your Lease
A make good lease is a typical clause that is written within most, if not all, commercial leases. In essence, it needs tenants to “return” the office space or property to its starting state or form. This seems natural and simple at first, but when you realize that you have to make changes to the office over time, “making good” can be a bit tricky. Here are reasons for the important of office make good clauses and how to make good at the end of your lease.
Importance of Office Make Good Lease: What To Consider
Chances are, make good clauses can appear in leases that are commercial in nature. Tenants tend to lease these buildings and office spaces as “blanks” or empty canvasses that companies want to configure to an existing design.
Since make good clauses require users to return the space to its original form, it’s important to make good arrangements for this clause prior to the completion of your lease.
This appears to be a lot of work to setup an agreement, but it’s something you can’t just ignore if you don’t want any problems in the long run.
- Be prepared: Remember that it’s important to clarify things in the make good clause now because these can affect your costs in the long run. There are costs to “making good,” so that means you have to be prepared to maintain long-term liability. If there’s any chance your improvements to the office can be done with removable partitions, then this is the better option.
- Be clean: Avoid all means of excessive wear and tear to the property. Desk chairs for instance are capable of making a real mess out of wooden floors, so it’s important to consider the cleanliness of some parts of the property you’re about to lease.
- Negotiate and document everything: Chances are, you’re going to request to make some changes to the property you’re leasing. Always make sure the make good clause is included in all of these changes. If there’s some chance you can remove your changes in the make good clause, then this is better on your end.
How Do We ‘Make Good’?
Should you and your tenant have clarified the terms of your arrangement, it’s time to remember some of the things to consider in order to make sure your leased space has been “made good.” You have to assess the small and big changes you’ve done to the property that you leased.
Check Small Changes
- Did you have partitions, fixtures and fittings? Things such as audio-visual equipment, artwork, shelving, photo frames, and projectors that aren’t included with the original lease have to be removed and stored away as well. This is why it might be more optimal to get yourself materials that can easily be removed.
- Carpets and floor finishes have to be removed as well, especially since you want to restore the property or office to its original condition.
- Signages such as corporate signage and even branding have to be removed from the entire place. This means it’s much safer to have used things that can be hung instead of using things that permanently mark the property.
- If you have used window decals and curtains, you have to remove them as well.
Check Big Changes
Is the joinery clear? If you’ve made joinery items such as storage, credenzas, and bar units, you have to make sure you have these properly removed and stored to take out with you and your employees.
- Did you make changes to mechanical and fire safety aspects of the office? You have to clarify your arrangements with your tenant if you’ve made changes to air conditioning, heating, and even small reconfigurations to other protection and safety measures installed within the place.
- Lighting and electrical changes such as power points, changes to data, and light fittings have to be returned to the default state as well.
- If you’ve painted the walls and included things such as murals and wallpaper, you ought to know how to remove those because it can “make good” of the lease.
- In speaking of walls, if you’ve done changes to panelling, walls, and bulkheads that were built as part of your fit-out, then you have to remove these as well.
These changes appear to be nitpicking, but these are all things you have to consider when making sure you have made good in your make good clause. These factors are extremely important because you have to uphold your end of the bargain upon signing the make good clause.
Get Professional Advice
If there’s some chance that you’re finding your make good clause sketchy or hard to understand, always remember that there are various opportunities to get yourself professional help. It’s understandable that leasing a commercial property can be exciting and frightening at the same time, but people can get professional help if you need them.
Visit our partner company Makegoods at www.makegoods.com.au for expert advice.
Always try to consult a tenant advisor when you are unsure. There are legal repercussions to not following the make good clause properly, so always prepare for these consequences.
We recommend Niche Tenant Advisory for cost effective tenant advice. Visit www.nichetenantadvisory.com.au
A make good clause in your office lease can seem to be something you can ignore at the beginning, but it has to be an important consideration when it comes to the welfare of your company. If you’re leasing an office, it’s important to specify just what is within a make good clause just so you know what to do by the time your lease is over. If you make good at the end of your lease, this can give a good impression to the person or persons who lent you and your company the office you’re currently using.
Sydney City Rubbish are able to carry out cost effective makegoods for your business needs. We specialise in office, retail and industrial makegoods. Call us on 02 9114 9727 for more information.