Make-good disputes: how to negotiate, mediate and move on

General information, not legal advice. This guide explains how make-good disputes usually unfold in Victoria and NSW, as at 28 October 2026. It does not tell you whether you or your landlord is right; only your lease, your evidence and, if needed, a lawyer or tribunal can do that. For advice, speak to a property lawyer, or contact the Victorian Small Business Commission or the NSW Small Business Commission.

A make-good dispute usually starts near lease end: an unexpected schedule of works, a high cash figure, or a landlord holding your bank guarantee. Many can be settled by negotiation, and clear evidence makes your position stronger.

What are make-good disputes usually about?

Make-good disputes usually fall into one of five types. Knowing yours tells you what evidence you need.

Disputes over security are covered step by step in getting your bank guarantee back.

What decides who is right in a make-good dispute?

The lease. Your make-good obligations come from what you agreed. The clause sets what you must remove, repair and reinstate, so the first question for every disputed item is: which words in the lease require this? Our guide to reading a make-good clause explains the common wording.

A few points from regulators and the courts often matter:

• Fair wear and tear. VSBC says retail make good typically means removing your fit-out and repairing damage "above fair wear and tear". But VSBC also notes that a repainting clause can require you to repaint to a new condition, even if the walls were poor at the start, if that is what you agreed.
• Original condition is not always the goal. The NSW Small Business Commission says make-good provisions typically require premises to be returned "in an empty and neutral state", which is not necessarily how they looked when you moved in.
• Reinstatement cost can be recoverable. In Tabcorp v Bowen [2009] HCA 8, a tenant rebuilt a foyer without the consent the lease required. The High Court let the landlord recover the cost of reinstatement, not just the drop in the building's value.
• A NSW limit on repair damages. Section 133A of the NSW Conveyancing Act 1919, as quoted by the High Court in 1943, caps damages for breach of a repair covenant at the drop in the value of the landlord's interest, and allows none if the premises will be pulled down or structurally altered shortly after the lease ends so the repairs are valueless. It covers repair covenants, not every make-good obligation; ask a lawyer to confirm its current wording. We found no Victorian equivalent in the Property Law Act 1958.
• Notice before forfeiture. In Victoria, before a landlord can re-enter or end a lease for breach, it must serve a notice describing the breach and asking you to fix it (Property Law Act 1958 s 146, applied to retail leases by Retail Leases Act s 94A).

What should I do first when I get a make-good claim?

1. Do not ignore it or agree on the spot. Acknowledge it in writing and say you are reviewing it.
2. Diarise every date. Lease end date, any deadline in the claim, any notice period, and the timeframes for returning security.
3. Gather your documents. Lease and variations, disclosure statement (retail), fit-out approvals or licence to alter, move-in condition report and photos, emails about what could stay, and invoices for any work already done.
4. Ask for the claim itemised. Each item should state the work, the clause requiring it and the cost, with quotes or invoices.
5. Mark each item: agree, disagree or need more information. This turns one big argument into a list of small, specific ones.

How do I negotiate a make-good claim?

Many disputes can be settled without a mediator. A structured approach helps:

1. Respond item by item. For each disputed item, say why, point to the clause or evidence, and propose what you think is fair.
2. Get a quote for the same scope. Ask a licensed contractor to price the items the landlord says are needed. If the quotes are far apart, compare inclusions: the landlord's figure may include work the lease does not require, upgrades beyond the required standard, or items for the next tenant.
3. Look at the options, not just the price. You might do the works yourself, pay a cash amount instead, split it (you do some items, pay for others), or leave approved items that the landlord or next tenant wants to keep. The NSW Small Business Commission says tenants "often agree to a payment to the lessor in lieu" of doing the make good. See make-good payment in lieu.
4. Watch the clock. Arguing past your lease end can mean extra rent for holding over. Consider doing the undisputed work now and arguing only about the rest.
5. Put any deal in writing. A settlement should say exactly what is being done or paid, that the make good is then accepted, and when the bank guarantee will be released. A lawyer can draft or check it, including whether it should be a formal release or deed.

Is the landlord's figure reasonable?

Ask these questions about any landlord quote or cash demand:

• Does every item trace back to a lease clause?
• Is it the same scope you would have to do, or does it include upgrades?
• Does it charge for fair wear and tear your lease excludes?
• Does it double up, for example "remove partitions" and "make good walls" for the same wall?
• Has the landlord already re-let the space, or does it plan to demolish or refurbish? (In NSW, that can matter for repair claims. Ask a lawyer.)

Our make good cost guide explains what drives cost and why published per square metre figures are only a rough guide.

Does my lease have an expert determination clause?

Check. The NSW Small Business Commission notes that retail leases often include a clause where a quantity surveyor, nominated by a body such as the Australian Institute of Quantity Surveyors, makes a binding decision on make-good costs if the parties disagree. If your lease has one, get advice before using it, because the decision can be binding.

How does Small Business Commission mediation work?

A neutral mediator helps both sides reach their own agreement. The mediator does not decide who is right.

How to prepare: bring your itemised response, lease clauses, condition report, photos and quotes, and know what outcome you could accept.

What happens if mediation does not resolve it?

• Victoria, retail: VCAT can generally hear the dispute only once VSBC certifies in writing that mediation has failed or is unlikely to resolve it (s 87). VCAT can order a party to pay money or do something (s 91). Each party usually bears its own costs, but VCAT can order costs against a party that refused to take part in mediation or acted vexatiously (s 92). With some exceptions (such as relief against forfeiture and unconscionable conduct claims), retail tenancy disputes cannot be taken to any other court or tribunal (s 89).
• NSW, retail: you can apply to NCAT. NCAT's limit is $750,000 for leases entered into on or after 1 July 2017 and $400,000 for earlier leases, and claims must generally be made within three years of when the liability arose.
• Non-retail leases: disputes generally go to the courts under the lease and general law.

Urgent cases are different: both states allow injunction-type applications, such as to stop a guarantee being drawn, without mediation first. Get legal advice straight away.

When should I get a lawyer?

Consider legal advice if:

• the claim is large compared with your business
• the landlord has threatened to draw, or has drawn, on your bank guarantee
• you are asked to sign a settlement, release or deed
• the lease wording is unclear or clauses conflict
• a tribunal or court deadline is close
• the landlord says you breached the lease by altering the premises without consent

How do I avoid a make-good dispute next time?

• Do a signed condition report with photos at the start of the lease. VSBC recommends one, and the NSW Small Business Commission suggests keeping it with your lease records.
• Get every fit-out approval in writing, including what you must remove at the end.
• Agree the make-good scope in writing before works begin, and get written sign-off from the landlord after.

How MAKE GREAT can help

MAKE GREAT is a technology marketplace. We are not a law firm, mediator or builder. We do not represent you in a dispute or tell you whether a claim is valid.

• Analyse my lease. Upload your lease and our lease check finds the make-good, alterations, redecoration and security clauses, with page and clause references. It is preliminary, not legal advice. It separates what the lease clearly requires from what needs clarifying, and unclear or high-risk findings are flagged for review by a person and, where needed, a referral to a lawyer.
• Get my make-good quotes. We turn the disputed schedule into one written brief and invite up to three approved contractors in your area to inspect and quote on the same scope, so you have itemised figures to compare. If fewer than three are eligible, we tell you. Read how we vet contractors.

You choose whether to use any quote, and you contract with the contractor directly. We do not promise a lower figure or a particular outcome.

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.