If you own a commercial building that you rent out to various clients, you need to take heed of several clauses. Among the major clauses in leasing a commercial building is the make good provision. The lease clause protects the conditions of the property, leaving it to its original form before vacating.
As the tenant, you need to make good of the premises before ending the lease. For this reason, learning about what the clause means and its importance is essential to both property owners and tenants.
What is a Make Good Provision?
It is a clause featuring standard enclosures in a commercial property lease that requires tenants to leave the property in its original state. The make good clause applies when the tenant completes the lease term and is ready to vacate the premises. They remove their items, and clean and tidy up the place. In some instances, they repair all the damages caused during their stay on the property.
The clauses are mostly in contracts where a tenant leases the property temporarily. In this case, the make good clause should be clear for both parties to agree. Therefore, the agreement is mainly between the landlord and the commercial tenant.
What if the Tenant Doesn’t Adhere to this Clause?
Make goods seem to favor the property owner more than it favors the tenant. So, if you are a tenant, you need to ensure you reduce the costs for this provision. You can do so during lease negotiations, i.e, if the tenant has leverage from the beginning. Also, you can reduce the costs at the end of the term of the lease. It is worth noting that the latter can be quite challenging given that it is too late for renegotiations.
However, if the tenant fails to observe the make good provisions in the lease contract, the landlord might sue them for the losses they suffered. Besides, the landlord can hold on to the security deposit or bank guarantee to help sort out the damages. The tenant may not get the full amount of the security deposit they had put down when they first leased the property.
Making Good at the End of the Lease
Before vacating the premises, the tenant should go through the lease agreement, particularly on the make good provision. Oftentimes, the obligations would require you to do the following before ending the lease;
- Remove and repair any partitions, fittings, and other installations
- Remove all the equipment and plant
- Remove floor bolts and racking
- Get rid of the coverings on the floor and ceiling
- Remove all curtains and blinds
- Uninstall all the air conditioning and heating systems
- Cleaning and getting rid of the rubbish on the site
- Repair any other alteration to the property
Since most commercial leases last for over five years, the tenant is naturally required to freshen the paint on the walls and change floor finishes. Regardless of what the lease contract states, you, as the tenant, should ensure the premise is clean and all the repairs are done. What’s more, you should give back all the keys given at the start of your lease.
Therefore, whenever you make any changes to the leased property, you should note them down. Doing this will help you to know what changes and repairs you need to accomplish. It is also essential to take pictures of the premises when you came to the building. You can compare these pictures and ensure you leave the area as you found it.
Before making any changes to the property, you should talk to your landlord. You will be surprised that the landlord likes what you have done with the place and wants it to remain that way. Others may go for a cash settlement to make the repairs themselves. Therefore, you should set a budget for make good clauses when you think of ending your lease.