How to get your bank guarantee back at the end of a commercial lease

General information, not legal advice. This guide explains how bank guarantees and bonds usually work at the end of a commercial lease in Victoria and NSW, as at 28 October 2026. Your lease and your bank's terms decide what applies to you. For advice on your situation, speak to a property lawyer, or contact the Victorian Small Business Commission or the NSW Small Business Commission.

When you signed your lease, you probably gave the landlord security: a bank guarantee, a cash bond or a deposit. Getting it back is usually the last step of moving out. A common cause of delay is that the landlord is not satisfied you have done everything the lease requires, and the make good is often the biggest item on that list.

What is a bank guarantee on a commercial lease?

A bank guarantee is a written promise from your bank to pay the landlord up to a set amount if the landlord asks for it. You do not hand over cash. Instead, your bank holds your money (often in a term deposit) or sets aside part of a loan facility to back the promise, and it usually charges fees while the guarantee is in place.

Three things about lease bank guarantees catch tenants out:

• The landlord can usually call on it without warning. The NSW Small Business Commission says a lessor "is usually not required to inform the lessee" before drawing on a bank guarantee.
• The bank usually pays on demand. Lease guarantees are commonly written so the bank pays when the landlord asks in writing, without checking who is right. Any argument about whether the landlord was entitled to the money usually happens afterwards, between you and the landlord. Check the wording of your own guarantee.
• It does not cancel itself. A guarantee stays open until your bank gets the original document back or a written release from the landlord. Until then, your money stays tied up.

When do I get my bank guarantee back?

It depends on your lease and whether it is a retail lease under your state's Retail Leases Act. Many shop leases are retail leases. Many office and warehouse leases are not, so the lease alone sets the rules, but some are, so check. If you are unsure which you have, our make good in Victoria guide explains the Victorian test.

Two points to check with a lawyer if timing matters to you:

• The Victorian 30-day rule is written for the "security deposit", and it only applies once all obligations are met. A disputed make good means the landlord may say the clock has not started. Section 24 also says it does not affect any lawful right the landlord has to use the security.
• Some leases require the guarantee to stay in force for a period after the lease ends, or until final outgoings are reconciled. Read your security clause for words like "expiry", "return", "release" and "after the termination date".

Why do landlords hold on to bank guarantees?

The guarantee covers anything you owe under the lease. Common reasons it is held back:

• The make good is not finished, or the landlord does not accept it was done to the standard the lease requires.
• Unpaid rent or outgoings, including the final year-end outgoings reconciliation.
• Holding over: you stayed past the end date, for example because make-good works ran late.
• Damage the landlord says goes beyond fair wear and tear.
• Keys, access cards and documents not handed back, or the premises not formally surrendered.

The NSW Small Business Commission's guide notes that if tenants "don't carry out the make good, they will normally be liable to pay the lessor's costs". In practice, those costs are often taken from the guarantee.

How do I get my bank guarantee back, step by step?

Start well before your lease ends. Six to twelve months out is a sensible window for a full make good, especially if your fit-out is large.

1. Read your security clause and make-good clause together. Note the guarantee amount, its expiry date (if any), the conditions for return, and exactly what the make good requires. Our guide to reading a make-good clause walks through the wording.
2. Find your evidence from move-in. The condition report, photos, fit-out approvals and any letters where the landlord agreed you could leave items behind. VSBC recommends both sides keep copies of the original condition report.
3. Agree the make-good scope in writing. Ask the landlord or agent to confirm what must be removed, repaired and reinstated. A written scope now prevents an argument later.
4. Get the work done properly and on time. Use suitably licensed, insured contractors. Keep invoices, certificates (for example electrical certificates) and before-and-after photos.
5. Book a joint inspection before you hand back the keys. Walk through with the landlord or their agent. If they raise items, fix them while you still have access.
6. Get written sign-off from the right person. The landlord usually holds the security, so ask for the landlord's written confirmation that the make good is complete and accepted. If the agent signs, ask them to confirm in writing that they are authorised to do so.
7. Hand back keys and access cards and get a receipt. Pay final rent and outgoings, or agree in writing how the final reconciliation will be handled.
8. Ask in writing for the guarantee to be released. Send a short letter or email (see below) and ask that the original guarantee be returned to you or sent directly to your bank.
9. Contact your bank to cancel the guarantee. Ask what the bank needs: usually the original document or a signed release from the landlord. Then follow up until the bank confirms it is cancelled and your funds are free.

What should my release request say?

Keep it short and factual:

We vacated [address] on [date]. The make good was inspected on [date] and accepted by [name] in writing on [date] (attached). Keys and access cards were returned on [date]. All rent and outgoings have been paid. Please return original bank guarantee no. [number] issued by [bank] for $[amount], either to us or directly to [bank branch and address], by [date]. If you believe any amount is owing, please send an itemised statement with supporting invoices by the same date.

What if the landlord draws on my bank guarantee?

If the landlord makes a demand, your bank will normally pay it. What you can do:

1. Ask for the breakdown in writing. Request an itemised list of what the money covers, which lease clause each item relies on, and the invoices or quotes behind each amount.
2. Compare it with your lease and your evidence. Check each item against your make-good clause, your condition report and your sign-off. Look for items the lease does not require, work charged twice, or upgrades beyond the required standard.
3. Get a quote for the same scope. A contractor's itemised quote for the work the landlord says was needed shows you whether the amount drawn looks reasonable. It is evidence for a negotiation, not proof on its own.
4. Raise it promptly and in writing. Then follow the steps in our guide to make-good disputes.

If you learn that a landlord is about to draw on a guarantee and you believe it has no right to, get legal advice urgently. In Victoria and NSW, the usual rule that retail disputes go to mediation first does not stop a party applying straight to the tribunal for an injunction-type order (Retail Leases Act 2003 (Vic) s 87; NCAT, citing s 68 of the Retail Leases Act 1994 (NSW)). Whether that is worth doing is a question for your lawyer.

What if the landlord simply will not return it?

1. Send a follow-up letter that sets a clear date and refers to your lease clause and, for retail leases, the timeframes above.
2. Ask your Small Business Commission for help. For retail leases, any party can refer a dispute to the Victorian Small Business Commission for mediation (Retail Leases Act 2003 (Vic) s 86). In NSW, mediation is compulsory for most retail lease claims before going to NCAT. VSBC also handles some non-retail commercial disputes.
3. Tribunal or court. If mediation does not resolve it, a Victorian retail dispute can go to VCAT once VSBC certifies mediation has failed. A NSW retail claim can go to NCAT, generally within three years of when the liability arose. Non-retail disputes generally go to the courts. A lawyer can tell you which applies.

Bank guarantee checklist

• Security clause read: amount, expiry, return conditions, any post-lease holding period
• Bank guarantee number, issuing bank and original document location recorded
• Make-good scope agreed in writing with the landlord
• Works done by licensed, insured contractors; invoices and certificates kept
• Joint inspection held before handover
• Written acceptance of the make good from the landlord (or an authorised agent)
• Final rent and outgoings paid or reconciliation agreed in writing
• Written release request sent, with a deadline
• Bank confirmed the guarantee is cancelled and funds released

For the full move-out sequence, see what is make good and our make good cost guide.

How MAKE GREAT can help

MAKE GREAT is a technology marketplace. We are not a law firm, a bank or a builder, and we cannot negotiate with your landlord or release your guarantee.

• Analyse my lease. Upload your lease and our lease check picks out the make-good, security and alterations clauses, with page and clause references. Its output is preliminary, not legal advice. It separates what the lease clearly says from what needs clarifying, and unclear findings are flagged for review by a person.
• Get my make-good quotes. We turn your lease, photos and the agreed scope into one written brief and invite up to three approved contractors who work in your area to inspect and quote. If fewer than three are eligible, we tell you. Read how we vet contractors.
• Keep the paperwork together. Quotes, invoices, photos and sign-off records sit in one project dashboard, ready to attach to your release request.

You choose the contractor and contract with them directly. We do not promise that using MAKE GREAT will get your guarantee back faster or save you money.

How we are paid: Free for tenants. If you hire a contractor through us, they pay us a referral fee. Nobody can pay to rank higher. You are never obliged to accept any quote.