Make-Good Clause Explained: How to Read Your Lease

The short answer

A make-good clause is the part of a commercial lease that says what condition you must hand the premises back in. Read it with the definitions, the alterations clause and any fit-out approvals. Then answer three questions: what must be removed, what condition it must be returned to (repaired, start-of-lease condition or base building), and whether fair wear and tear is excluded.

Last reviewed 28 October 2026

Key takeaways

01We have found no Victorian or NSW law that sets a standard make good. Your lease wording decides the scope, so read the actual clause, not a summary.
02Make-good obligations are often spread across several clauses: definitions, repairs, alterations, redecoration and yield up. Read them together.
03"Original condition" can mean the building as first built, or the premises on the day your lease started. Check which date your lease uses.
04"Fair wear and tear excepted" is common but not universal, and a separate repainting clause can still require a full repaint.
05Get the landlord's answers in writing before you ask for quotes, so every contractor prices the same scope.

A make-good clause sets the condition you must hand your premises back in. It drives your end-of-lease budget, and it is often written in old-fashioned legal language. This guide shows where to find it, what the common wordings usually mean, and what to ask your landlord before you pay for any work.

General information only, not legal advice. Every lease is different. Speak to a property lawyer about your own lease, or to your state's Small Business Commission if you have a retail lease.

Is there a standard make-good clause in Victoria or NSW?

No. We have not found a Victorian or NSW law that defines "make good". It is a contractual obligation, so the words in your lease set what you have to do.

The NSW Small Business Commissioner's NSW Retail Tenancy Guide describes make good as returning the premises to the condition they were first built in, to the condition at the start of the lease, "or some other condition as specified in the lease". It also says make-good provisions typically require premises to be returned "in an empty and neutral state". That range is exactly why you need to read your own clause.

For the bigger picture, see what is make good and commercial make good.

Where do I find the make-good clause in my lease?

Make-good obligations are rarely in one place. Look for all of these:

Where to look	What it usually tells you
Make good / Yield up / End of lease clause	The main obligation: what to remove and what condition to leave the premises in
Definitions (often clause 1)	What "Premises", "Lessee's Property", "Fit-out", "Base Building" and "Commencement Date" mean. These words change the scope a lot
Repairs and maintenance clause	Your ongoing duty to keep the premises in repair, which often carries through to the end
Alterations clause	Whether changes you made with consent must be removed at the end
Redecoration / repainting clause	Whether you must repaint, how often, and to what standard
Fit-out approval, licence or deed	The landlord's consent to your works, often with its own removal conditions
Disclosure statement (retail only)	In Victoria, the prescribed disclosure statement asks: "Are you required to make good the premises at the end of the lease?"

Quick tip: search your lease PDF for make good, reinstate, yield, remove, original, redecorate and fair wear. Copy each match, with its clause number, into one document.

What do the common make-good wordings mean?

These are typical paraphrases, not quotes from any real lease. Yours will differ.

Typical wording	What it usually means in plain English	Question to ask
"Yield up the premises in good repair and condition, fair wear and tear excepted"	Leave it clean and in repair, but you are not responsible for normal ageing	"Is anything else to be removed or reinstated?"
"Remove all of the Lessee's Property and make good any damage caused by the removal"	Take out everything you brought in or installed, then fix the holes and marks removal leaves	"Which items count as Lessee's Property?"
"Reinstate the premises to the condition they were in at the Commencement Date"	Put the premises back to how they were on day one of the lease	"Which commencement date: this lease, or the first lease?"
"Reinstate the premises to Base Building condition"	Strip back to the landlord's standard specification, often an open floor with standard ceilings, lights and services	"Can you send the base-building specification?"
"Remove such of the Lessee's improvements as the Lessor directs"	The landlord chooses what comes out, usually by notice	"When must you give the direction, and can items stay?"
"Redecorate the premises in colours approved by the Lessor during the last [period] of the term"	Repaint, whatever the current condition	"Which surfaces, which paint, and by when?"
"If the Lessee fails to make good, the Lessor may do the works and recover the cost as a debt"	If you do not do the work, the landlord can do it and bill you	"How will the cost be worked out and evidenced?"
"At the Lessor's election, pay the Lessor's reasonable estimate of the cost instead"	The landlord can choose to take cash instead of works	See our guide to make-good payment in lieu

Notice who decides. "As the Lessor directs" or "at the Lessor's election" gives the landlord a choice, so check when that choice must be made: a late direction leaves little time for the work.

What does "fair wear and tear" mean?

In everyday terms, fair wear and tear is the deterioration that comes from ordinary, reasonable use and the passing of time. It is not damage from an accident, misuse or removing your fit-out.

Usually fair wear and tear	Usually damage you would need to fix
Carpet worn flat along walkways	Carpet stained, burnt or torn
Paint faded or slightly scuffed	Holes from shelving, screens or signs
Ceiling tiles discoloured with age	Tiles broken or missing after cabling work
Light marks on a warehouse slab from normal traffic	Racking anchor holes, chipped or cracked slab from forklift impact

Three things to check:

Is the exception actually in your clause? "Fair wear and tear excepted" is common, but not universal. If it is missing, take advice before assuming it applies.
Does another clause override it? The Victorian Small Business Commission notes that a repainting clause can require you to repaint to a new condition, even where the starting condition was poor, if that is what you agreed in the lease.
What does the regulator say for your lease type? For Victorian retail leases, VSBC says make good typically involves removing your fit-out and repairing damage "above fair wear and tear".

In Victoria, section 147 of the Property Law Act 1958 lets a court relieve a tenant from an unreasonable notice to do internal decorative repairs, but not from a covenant to "yield up" the building in a specified state of repair at the end of the term. Many make-good clauses are written that way, so ask a lawyer whether it helps you.

What does "original condition" mean?

This is where many disputes start, because "original" can point to different dates:

The building as first built. The NSW guide's glossary describes make good as returning premises "to the condition it was first built". That can mean removing things that were already there when you moved in.
The start of your lease. Back to how the premises were on your commencement date.
The start of the first lease. If you renewed, exercised an option or took an assignment, check whether "Commencement Date" refers to your current term or the original lease. The definitions clause usually answers this.

The Victorian Small Business Commission also says a tenant who buys a business and takes over an existing lease "still ha[s] make good obligations". If you inherited someone else's fit-out, assume you may be responsible for it until a lawyer or the landlord confirms otherwise in writing.

Evidence of the original condition settles arguments. Gather:

your start-of-lease condition report and photos (VSBC recommends agreeing one at the start of a lease, and both parties keeping copies)
fit-out approval drawings you lodged with the landlord
the agent's marketing photos or floor plans from when you leased the space
emails or letters where the landlord agreed items could stay

What does "base building" mean?

Base building is the standard a landlord delivers before any tenant fit-out. In an office tower it usually means an open floor, the building's standard ceiling grid and tiles, standard lights, air-conditioning outlets on a regular layout, sprinklers and detectors for an open floor, and painted walls. In a warehouse it may mean a clear slab, the original high-bay lights and the building's standard office area.

The NSW guide notes that "cold shell" or "warm shell" terms are sometimes used in shopping centres, where you may need to take services back to capped points and install hoarding. These are industry terms, not legal ones, so ask the landlord to define them in writing.

Our lease reinstatement page covers base building, cold shell and warm shell in detail, and make good vs reinstatement vs restoration explains how those words differ.

Consent to install is not the same as permission to leave it behind. Many alterations clauses say approved works must still be removed at the end unless the landlord agrees otherwise. Check your fit-out approval letter or deed for removal conditions.

Changes made without consent carry more risk. In Tabcorp Holdings v Bowen Investments (2009), a tenant rebuilt a foyer without consent, and the High Court of Australia held the landlord could recover the full cost of reinstatement, not just the drop in the building's value.

Does it matter if my lease is a retail lease?

It can. In Victoria, the Retail Leases Act 2003 covers premises used mainly to sell goods or provide services to the public, with exclusions (for example, occupancy costs above $1,000,000 a year excluding GST). A lease term is void to the extent it is inconsistent with that Act (s 94), and the landlord's repair duty does not cover things the tenant is entitled or required to remove at the end of the lease (s 52). NSW has its own Retail Leases Act 1994. Most industrial leases and many office leases are not retail leases, so the lease and general law decide, but some service-business offices can be. Ask a lawyer if you are unsure. See make good in Victoria and make good in NSW.

How do I read my make-good clause, step by step?

Collect every document: lease, schedules, fit-out approvals, deeds of variation or assignment, condition report.
Copy out every relevant sentence word for word, with clause numbers, and look up each capitalised defined term.
Answer three questions in writing: What must be removed? What standard must the premises be returned to? Is fair wear and tear excluded?
Note who decides and by when: any landlord "election" or "direction", and any notice deadline.
List what is unclear and send those questions to the landlord or agent in writing.
Walk the premises with your list and photograph every item: remove, reinstate, repair or leave.
Get legal advice on anything uncertain or high-value before you commit to a scope.

Our office make-good checklist turns the rest of the process into a printable list.

How MAKE GREAT can help

Analyse my lease. Upload your lease and our lease check finds the make-good, reinstatement, repair and alterations wording, links each finding to its clause, and flags what is unclear or missing. It is preliminary, and a person at MAKE GREAT reviews it before you rely on it. It is not legal advice; unclear clauses are flagged for you to take to a lawyer.
Get my make-good quotes. Once your scope is clear, we send the same structured brief to contractors in our marketplace so their quotes can be compared line by line.

MAKE GREAT is not a contractor or a law firm, and you contract with the contractor directly. Free for tenants. If you hire a contractor through us, they pay us a referral fee. Nobody can pay to rank higher.

General information only, not legal advice. For advice about your own lease, speak to a property lawyer or your state's Small Business Commission.

General information only, not legal advice. Get advice from a property lawyer about your own lease.

Frequently asked questions

Where is the make-good clause in a commercial lease?

It is usually near the end of the lease, under a heading such as Make Good, Yielding Up, End of Lease, Reinstatement or Removal of Lessee's Property. Related terms are often in the definitions, repairs, alterations and redecoration clauses, and in any fit-out approval or deed. Search the whole lease for make good, reinstate, yield up, remove and original.

What does fair wear and tear mean in a commercial lease?

It generally means the deterioration that happens from ordinary, reasonable use of the premises and the passing of time, such as worn carpet in walkways or faded paint. It does not usually cover damage from accidents, misuse or removing your fit-out. Whether it applies at all depends on your clause, so check that the words fair wear and tear excepted are actually there.

What does return to original condition mean?

It depends on how your lease defines it. The NSW Small Business Commission describes make good as returning premises to the condition they were first built in, to the condition at the start of the lease, or to some other condition the lease specifies. Those can be very different, so find the date or standard your lease uses and gather evidence of what the premises looked like then.

What does base building mean in a lease?

Base building is the standard the landlord provides before any tenant fit-out: typically an open floor with the building's standard ceilings, lights, air-conditioning, fire services and finishes. Some landlords, especially of office buildings, have a written base-building specification. Ask whether yours does, because it turns a vague obligation into a checklist.

Do I have to make good if I took over an existing fit-out?

Often yes. The Victorian Small Business Commission says a tenant who buys a business and takes over an existing lease still has make-good obligations. Check whether your lease or assignment documents make you responsible for the previous tenant's fit-out, and get legal advice if they are unclear.

Can a make-good clause require more than the condition I received?

Yes, if that is what the lease says. The Victorian Small Business Commission notes that a repainting clause can require you to repaint to a new condition even where the starting condition was poor, if you agreed to it in the lease.

Who should read my make-good clause?

You should read it first so you know the questions to ask, and a property lawyer should advise on what it means for you. A make-good contractor can then price the works once the scope is agreed. For retail lease disputes, the Victorian Small Business Commission or the NSW Small Business Commissioner is a good starting point for information and mediation.

Sources

Primary sources we checked when writing this page. Laws and guidance change, so check the current version.