Make Good Clauses: When Does a Tenant Have to Remove Its Fit-Out?

Make good disputes often arise when a long commercial lease ends. A recent NSW Supreme Court decision shows that their resolution depends on reading the lease as a whole, rather than interpreting a single phrase in isolation.

Allied Pinnacle Pty Ltd v G R Mailman & Associates Pty Ltd [2026] NSWSC 87 concerned commercial premises at Huntingwood in Western Sydney. The tenant took a ten-year lease in 2015, with options for two further five-year terms, and installed a substantial fit-out at the start of its tenancy. The current landlord bought the premises in late 2017. The tenant did not exercise its option and vacated in August 2025, leaving the fit-out in place.

The central question was the meaning of clause A2.1, which required the tenant to yield up the premises consistent with their “condition” at the commencement of the lease. The landlord argued this meant restoring the pre-fit-out layout. Muston J preferred the tenant’s view that “condition” referred to the standard of the premises, not their configuration. The word was used in that sense in clauses A2.2(c) and A24.5, and the more specific make good provisions in clause A24, which prevailed, contained no reinstatement obligation. Clause B1(22) also gave the tenant a discretionary right to remove its fixtures, which would have been pointless if removal was compulsory.

The tenant did not escape liability entirely. Clause A24.3(b) required repainting of “all painted surfaces”, including the exterior, and the tenant was liable for outstanding redecoration works, including furniture removal, internal repainting and carpet works. The Court rejected arguments based on failure to mitigate, repudiation, waiver, estoppel and an implied duty of good faith, and found that the unconscionable conduct claim would have failed in any event. Damages were referred to by the referee.

Ultimately, the decision illustrates that general yield-up wording will be read in light of the lease’s more specific make good provisions.

NSW Building Approvals Set for Reform Under 2026 Bill 

The NSW Government has proposed the Building (Approvals and Practitioners) Bill 2026, recommending significant reforms to the state’s building certification system. If enacted, the Bill would overhaul the current framework of construction and occupation certificates with a new regime based on building and completion approvals, while repealing several existing pieces of legislation, including the Building and Development Certifiers Act 2018, the Design and Building Practitioners Act 2020, and parts of the Environmental Planning and Assessment Act 1979 relating to building certification.

Among the proposed changes is a new process allowing building approvals and completion approvals to be issued in stages. Applicants undertaking staged projects would be required to submit a staging schedule with their initial application, while approval authorities would need to consider how each stage interacts with the broader development. Moreover, the Bill outlines a new mechanism for varying building approvals and introduces a post-commencement authorisation process where work has begun without the necessary approval.

The proposed legislation would also alter the current position by restricting applications for building and completion approvals and completion approvals to parties who have obtained the landowner’s consent. This represents a departure from the existing regime, where a person with the benefit of development consent may generally apply for construction and occupation certificates even if they do not own the land.The expanded consent requirement may create additional hurdles for developers, tenants and others with interests in land who require approval to commence or finalise works, particularly where third-party landowner cooperation is difficult to obtain.

Lastly, Bill introduces a regulatory framework for prefabricated buildings and would bring manufactured homes within the planning approval regime by requiring development consent in circumstances where it is currently unnecessary. It also strengthens enforcement powers by making non-compliance with certain written directions issued by approval authorities a criminal offence and removes the Land and Environment Court’s existing power to substitute its own decision on certain certification disputes. Although the reforms aim to modernise and streamline approvals, many of the changes remain subject to parliamentary approval and have not yet commenced.