Make good vs reinstatement vs restoration, explained side by side

Leases, landlords and contractors use make good, reinstatement, restoration and strip-out as if they meant the same thing. They don't, and mixing them up can leave you with quotes that can't be compared, or a landlord's claim you didn't expect. This guide puts the terms side by side and shows how to tell which ones your lease actually requires.

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

What is the short difference?

Think of make good as the box, and strip-out, repairs, reinstatement and cleaning as the pieces that may or may not be in it. Your clause decides which pieces are in your box.

What does make good mean?

Make good is the umbrella term. The NSW Small Business Commission describes it as the tenant's end-of-lease obligation to return the premises to the condition they were first built in, to their condition at the start of the lease, or to another condition the lease specifies. Our guide What is make good? covers the three common clause types in detail.

Because make good is a contract term, the same words can mean a light clean in one lease and a full return to bare shell in another.

What does reinstatement mean?

Reinstatement means putting back what the landlord originally provided, which you removed or changed during your lease. It is the step that turns "take your things out" into "rebuild the landlord's standard".

Examples:

• You built offices and the landlord's open-plan ceiling grid was cut around them. Reinstatement means re-laying the grid and tiles.
• Your fit-out moved air-conditioning outlets and sprinkler heads to suit the offices. Reinstatement means moving them back to the open-plan layout.
• You replaced the building carpet with your own floor finish. Reinstatement means removing yours and laying the building standard.

Reinstatement usually needs licensed or specialist trades. Electrical wiring work must be done by a licensed electrician in both Victoria and NSW, and fire services and air-conditioning changes need the right contractors. That is one reason reinstatement can be one of the more expensive pieces of a make good. Our lease reinstatement page explains base building, warm shell and cold shell in more detail.

What does restoration mean?

Restoration has no single fixed meaning in Australian leases. It turns up in three ways:

1. In lease clauses, as another way of saying reinstate: "restore the premises to the condition they were in at the commencement date". Read it the same way: what condition, and as at what date?
2. In accounting, where make good is treated as a restoration obligation. The federal Department of Finance's guide RMG 114 is titled Accounting for decommissioning, restoration and similar provisions to make good. This is about estimating the future cost on the balance sheet, not about the works themselves.
3. In trade quotes, for repairing one element: "floor restoration" for a warehouse slab, for example, or "wall restoration" after signage is removed.

If a quote or a landlord's letter says "restoration", ask: restore what, to what condition, and how will we both know it's done?

What does strip-out mean, and is it the same as make good?

Strip-out is the removal piece only. A contractor who quotes for "strip-out" may leave you with an empty space that still has holes in the walls, a missing ceiling grid and capped services in the wrong places. That can be exactly right if your clause only asks you to remove your fit-out and make good damage. It falls short if your clause says reinstate. See commercial strip-out.

Before any strip-out in an older building, check the asbestos register. In Victoria, before refurbishment or demolition work starts, the person who manages or controls the workplace must review the register, and asbestos likely to be disturbed must be identified and, so far as reasonably practicable, removed. Removal must be done by a licensed asbestos removalist, except for the limited small-scale work the regulations allow (Occupational Health and Safety Regulations 2017, regs 240 to 246 and 250).

How do you tell which one your lease requires?

Look for the verb and the end condition in your make-good clause.

The last row comes from the Victorian Small Business Commission, which notes a repainting clause can require repainting to a new condition even where the starting condition was poor, if that is what the tenant agreed to.

Also check:

• The alterations clause and fit-out approvals. The landlord may have approved your fit-out on condition that you remove it and reinstate at the end.
• The start-of-lease condition report. It is the best evidence of what "condition at commencement" looked like. Both the Victorian and NSW Small Business Commissions recommend agreeing one.
• Unapproved changes. In Tabcorp Holdings v Bowen Investments (2009), the High Court allowed a landlord to recover the full cost of reinstating a foyer the tenant had rebuilt without consent.

Why does the difference matter when you get quotes?

Because contractors price what they think the job is. Here is an illustrative example, not a real project:

A tenant asks three contractors to "quote the make good" on a fitted-out office floor. One prices strip-out and a clean. One adds patching and painting. One prices full reinstatement of the ceiling grid, lights and air-conditioning outlets. The three numbers look wildly different, and the cheapest is not cheaper: it is a smaller job.

To avoid this:

1. Write down which pieces your clause requires: strip-out, repairs, reinstatement, painting, cleaning.
2. List items room by room as remove, reinstate, repair or leave, with photos.
3. Send that same list to every contractor and ask them to price each line and state exclusions.

Our make good cost guide explains what pushes each piece up or down, and the office make good checklist gives you a template.

What if the landlord's list asks for more than your lease does?

Ask which clause each item comes from. The NSW guide notes retail leases often include a clause allowing a quantity surveyor to make a binding decision on make-good costs if the parties disagree, so check whether yours does. In a Victorian retail lease, the landlord is not responsible for repairing things the tenant is entitled or required to remove (Retail Leases Act 2003, s 52), which is why it matters what counts as "yours". For a real dispute, talk to a property lawyer or your state's Small Business Commission. If the landlord offers to take cash instead, see make-good payment in lieu.

How MAKE GREAT can help

• Get my make-good quotes. Tell us about the premises and we turn your clause into one structured scope that separates strip-out, repairs, reinstatement and cleaning, so independent contractors in our marketplace price the same job and you can compare quotes line by line.
• Analyse my lease. Our lease check highlights the make-good, reinstatement and alterations wording and drafts a preliminary list of works with clause references. It is preliminary only, a person at MAKE GREAT reviews unclear findings, and a contractor must confirm the scope on site. It is not legal advice.

You choose the contractor and contract with them directly. MAKE GREAT is a technology marketplace, not a contractor. 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. Your lease wording, and advice from a property lawyer, decide your actual obligations.