In the wake of Covid-19, many tenants will not be renewing their leases and vacating premises, which is why it is important that they understand and uphold their end of lease or make good obligations.

Generally, make good clauses include the obligations such as to remove all tenant’s property from the premises including all signage and fix any damage caused, to reinstate the premises to the same configuration as the commencement of the lease, or to return the premises to a base building standard, to service all air conditioning units, to refurbish or redecorate the premises and in lieu of performing make good obligations paying the landlord a sum of money calculated on an agreed basis or as determined by the landlord.

Make good clauses may require the tenant to return the premise to a standard as articulated in a condition report. Importantly, any works required under the make good clause will likely have to be performed by the end of the lease period. If a landlord is unable to rent premises because a tenant failed to perform their make good obligations, the tenant may be liable for damages and ordered to account for the landlord’s lost income.

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