Office Makegood Negotiations

A makegood clause is an important part of every commercial lease agreement for office space. It’s essential that you take this into account when initially negotiating your lease, so that when the time comes to vacate, your obligations to return the space to its original condition are clear. At Niche Advisory, our team is here to help.

Makegood clauses and requirements might seem straightforward, but they can become contentious if not clearly defined or understood. If you’re vacating your space and your makegood clause is not clear, you may well end up paying more than planned to return the space to original condition. In this situation, an expert advisor is a must.

What is an office makegood clause?

An office makegood clause outlines a tenant’s obligations to restore the leased space to its original condition before handing it back to the landlord. This process often involves:

• Removing fit-outs, such as partitions or custom installations.
• Repainting walls or repairing any damage.
• Reinstating ceilings, lighting, or other fixtures that were modified.
• General cleaning and rubbish removal to leave the property in an acceptable state.

The specifics of makegood obligations can vary widely between leases, which is why a well-negotiated agreement is crucial. In some cases, you may not need to change much at all, but in this situation you should still ensure that the clause itself is as clear as can be.

Negotiating makegood clauses before signing a lease

The most effective time to address makegood obligations is during the lease negotiation stage. A poorly defined or overly broad clause can lead to unexpected expenses when it’s time to vacate the premises. At this point in time, you will be able to maintain a strong negotiating position to ensure that the clause is clearly defined, with no grey areas.

Key points to consider during negotiations

1. Define “makegood” clearly: Ensure the lease specifies the exact condition the landlord expects at the end of the term. This could range from “broom-clean” to full reinstatement.
2. Document the space’s current condition: A detailed condition report at the start of the lease ensures both parties agree on the property’s baseline state. This avoids disputes about what constitutes “damage” versus normal wear and tear.
3. Negotiate a reasonable scope: Advocate for exclusions, such as normal wear and tear, structural repairs, or upgrades requested by the landlord during the tenancy.
4. Consider a financial settlement: Some tenants opt to negotiate a cash payout instead of performing the makegood themselves. This arrangement can simplify the process and reduce risks of non-compliance.

At Niche Advisory, our team of property and leasing experts regularly helps tenants analyse lease agreements to ensure fair and balanced terms, saving time, money, and stress in the long run. We’re also here to negotiate on your behalf, ensuring that you can benefit from a makegood clause that is fair and transparent.

Addressing makegood obligations upon vacating

When a commercial lease ends, tenants may face disputes if the work conducted to return the space to ‘original condition’ does not meet the landlord’s expectations. Having professional support during this stage can prevent unnecessary costs or legal complications and ensure that you fully understand what is required.

Steps to take when vacating

When you are preparing to leave your office space, there are a few things to do.

1. Review the lease terms: Revisit the makegood clause to confirm what is required.
2. Engage professionals for an inspection: Hiring experts to assess the property’s condition ensures compliance with the agreed terms.
3. Communicate with the landlord: Proactively discuss expectations and potential solutions if disputes arise.
4. Negotiate disputes: If the landlord claims additional work is needed, tenants may be able to negotiate a settlement instead of performing costly reinstatement works.

At Niche Advisory, our team provides expert guidance during the vacating process, helping tenants resolve disputes efficiently and cost-effectively.

Why professional advice matters in makegood negotiations

Navigating makegood clauses requires experience and industry knowledge. Without proper advice, tenants risk overcommitting to unnecessary restorations or being blindsided by hidden costs. Niche Advisory’s team specialises in representing tenants, ensuring that makegood obligations are fair, transparent, and manageable. By working with our team, you can focus on your business without worrying about potentially expensive surprises.

Benefits of working with Niche Advisory

An experienced makegood negotiating team brings a range of benefits to the table. We know that at Niche Advisory, our experience and deep market knowledge is an asset to our clients. We can leverage this expertise to ensure that you get the best results, and we’ll deliver a smooth process throughout.

• Lease expertise: We meticulously review and negotiate lease agreements to protect your interests.
• Fair outcomes: Our team ensures makegood obligations align with industry standards and the property’s actual condition.
• Cost savings: By avoiding unnecessary work or excessive payouts, we help minimise end-of-lease expenses.
• Streamlined processes: We manage negotiations and communications with landlords, saving you time and effort.

Get expert help with your office makegood negotiations

Whether you’re signing a new lease or approaching the end of an existing one, makegood negotiations can have significant financial implications. At Niche Advisory, we’re your trusted partner and we’re here to ensure the process is fair, transparent, and stress-free. Contact our team today to find out how we can help.