The Lease Is Ending—Now What? A Practical Guide to Make-Good Obligations in Victoria

By Kather­ine Dean, Miglic Dean

When a com­mer­cial lease ends, one of the most com­mon — and cost­ly — sources of ten­sion between land­lords and ten­ants is the ​“make-good” clause. At Miglic Dean, we’ve helped count­less clients nav­i­gate this process, and we know that what’s writ­ten in the lease is only half the sto­ry. The oth­er half is about tim­ing, com­mu­ni­ca­tion, and strate­gic foresight.

What Is a Make-Good Obligation?

In Vic­to­ria, make-good refers to the tenant’s respon­si­bil­i­ty to return the premis­es to a par­tic­u­lar con­di­tion at lease end. This might include:

• Rein­stat­ing the space to its orig­i­nal con­di­tion (often a ​“cold shell”)
• Remov­ing fit-outs or alterations
• Repair­ing dam­age beyond fair wear and tear (patch­ing a paint­ing for exam­ple, or re-sur­fac­ing flooring)
• Repaint­ing or re-car­pet­ing, depend­ing on the lease terms
• Pro­vid­ing ser­vice reports for fire safe­ty equip­ment, com­mer­cial roller doors, A/C etc

The scope of these oblig­a­tions is typ­i­cal­ly defined in the lease.

Com­mon Pit­falls We See (and Help Avoid)

• Vague lease lan­guage: Terms like ​“good con­di­tion” or ​“orig­i­nal state” can be ambigu­ous with­out a clear baseline.

• Miss­ing con­di­tion reports: With­out prop­er doc­u­men­ta­tion at lease com­mence­ment, dis­putes become hard­er to resolve. With­out these there is more reliance on gen­er­al make-good claus­es which cov­er this point (such as the 5 year re-paint, re sur­face clause).

• Last-minute plan­ning: Leav­ing make-good to the final weeks can lim­it options and inflate costs. We always rec­om­mend a pre-exit inspec­tion to ensure all crit­i­cal make-good works are clear­ly under­stood by all parties.

Our advice? Don’t wait. Engage ear­ly, doc­u­ment thor­ough­ly, and seek expert guidance.

For Land­lords: Pro­tect­ing Your Asset

We work with land­lords to ensure make-good claus­es are:

• Clear­ly draft­ed and com­mer­cial­ly realistic

• Sup­port­ed by detailed con­di­tion reports and photos

• Enforced with enough lead time to allow for smooth transitions

This proac­tive approach helps min­imise down­time and ensures your prop­er­ty is ready for re-leas­ing or repositioning.

For Ten­ants: Plan­ning for a Clean Exit

Ten­ants ben­e­fit from under­stand­ing their oblig­a­tions from day one, ensure to have sought advice around:

• Review­ing and nego­ti­at­ing lease terms before you sign 

• Cost-effec­tive exit strategies

• Explor­ing alter­na­tives like nego­ti­at­ed settlements

The goal? Avoid sur­pris­es and exit on your terms.

Why It Pays to Work with an expe­ri­enced com­mer­cial prop­er­ty manager.

Make-good isn’t just a legal clause — it’s a strate­gic lever. At Miglic Dean, we bring deep leas­ing exper­tise, com­mer­cial insight, and a proac­tive mind­set to every trans­ac­tion. Whether you’re a land­lord or ten­ant, we’re here to help you nav­i­gate make-good with clar­i­ty and confidence.