If you have planned to move your business or terminate your lease, you need to make sure that you “make good” the premises before delivering back the keys. This blog post discusses the significance of the end of the lease.
What does End of Lease make good imply?
End of lease make good is a standard clause inculcated in major commercial leases requiring tenants to return the property to its original condition. End of lease makes good clauses are majorly likely to agree where the tenants lease the building as a shell or propose to transform an existing fit-out.
End of lease make good is generally a standard fundamental clause making it necessary for tenants to return the property to its original state.
End of Lease Makes good provisions are generally not well comprehended by business people. The clause themselves can be ambiguously worded and introduced into the lease agreement in haste.
Even if an end of lease makes a good clause does not appear in the lease agreement. A landlord has the right to assert common-law action against you if you don’t return the premises in line with its original condition.
This blog post discusses the essentials you should consider when you are about to finish up your lease and how to end a lease and make good processes that need to be worked out.
While majorly end of lease makes good clauses unclear, some are direct to the point and others optimistically infused with inclusions and exceptions.
Enlist the modifications
Prepare a list of everything you have modified in the property. The ultimate best medium to execute this is to commence from the front door and walk through the property in a clockwise pattern, notifying everything you have altered.
The foremost common things that you need to ensure you have inculcated in your list consisting of:
- Fittings such as shelves
- Electrical points and lighting
- Painted walls and other decorations
- Floating floorboards or carpets
- Computer room or data centre
- Drapes and blinds
- Air conditioning and heating
Verify and confirm with the landlord
After you have prepared your list, it is time to check and confirm with the landlord to verify and secure the landlord to review what they demand and require. Sometimes an owner will observe the changes you have made to the property as an improvement and will be delighted for them to remain.
On the other hand, some owners would insist on a cash settlement in place of the end of the lease to make a good clause. Cash settlements are becoming more common as it often suits the departing tenant and the new tenants. They have plans to remodel the premises anyway.
Tenants can additionally strive to negotiate a good side deed. Side deeds can directly result from a fractious relationship between the parties and carry more risk for the departing tenant. Side deeds usually require a consultant’s report, a building consultation report and itemised dispute resolution mandates.
It is better always to agree on a make-good clause at the commencement of the tenancy itself:
For the tenant, their mindset is aimed at evenly on how they would carry and transform this space into an enthralling new business- not on disassembling it years down the track.
But in the interest of both parties, it is worthwhile to ensure that they agree on the end of the lease, make good arrangements upfront. Then proceed with the document and photograph the premises to minimise any disagreements and expense when it comes to moving.