Calling All Tenants February 23, 2018

Are you aware of your ‘make good’ or reinstatement obligations?

In commercial leases, it is common for clauses to require you to return the premises to a condition consistent with the condition of the premises at the start of the lease, as well as remove and make good all of your installations, fixtures and fittings. This is commonly referred to as a “make good” obligation.

As an alternative to a “make good” obligation, landlords have commonly accepted a “lump sum payment” from tenants in lieu of a tenant being required to perform such a “make good” obligation.

The actual works required by you to satisfy your “make good” obligations are often not well understood by both parties to the lease. This frequently leads to landlord–tenant disputes which can be lengthy, costly and highly stressful for all parties concerned.

marshalls+dent+wilmoth, in cooperation with our consultants and other advisors, offer a comprehensive advisory and consultancy service to properly inform you and assist you to ensure you achieve a timely and smooth transition out of your leased premises, including:

• providing advice on the mechanics of your “make good” requirements under the lease or other commercial arrangement
• if you are required to “make good” the premises, our consultants will undertake a tender process to achieve the most competitive market costs for all required work, as well as properly consider any and all engineering issues and supply a detailed written scope, costs, Gantt Chart Timeline and construction schedule;
• if you prefer to negotiate a payment with the landlord rather than “make good” the premises, we will assist you to negotiate a fair and reasonable payment which properly reflects your obligations under the lease.

Notwithstanding the above, the best protection for a tenant is to have a properly negotiated, reasonable and easily understood “make good” clause contained within the lease itself, so please get in touch with us for our tailored advice and assistance prior to execution of the lease!

Otherwise, our experienced team of leasing experts are ready to assist you with the full suite of leasing services.