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Phillipe C.
Phillipe C.
Rosebery, NSW
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About to sign commercial lease for the first time. The owner is offering 3 months rent free and the fit out which is about $25,000.... 3 x 3 years . They want a make do clause after the 3 years which we don’t understand.... is this normal?

2 weeks ago

Responses

Hi Phillipe,
I worked in the fast food industry for many years and the “make good” clause was a part of most of the leases that we held or that we entered into. It is a protection for the landlord that you remove any rubbish, restore the integrity of floors, walls and ceilings where you have installed equipment or other items and generally leave the space as a lettable asset in the same way it was leased to you.
I am sure that there are a couple of much more qualified people on here than me that can give you some more specific guidance.
Best of luck with the new venture
Regards
Scott

Hello Phillipe,

I’m a property manager who deals in commercial leases.So far you have negotiated some very good terms.So good on you so far so good.The make do clause or what is known as a re-instatement of premises clause is normal but should only apply at the end of the occupancy should you be vacating the property. So the lease and this clause needs to be worded correctly with the ”make good “clause. A 3 x 3 year lease has to be prepared by a solicitor specialising in commercial leases so they should already know how to word this clause.Any commercial lease more than 3 years long must be prepared by the landlords solicitor (not DIY) and checked over by your solicitor( Best practice) before you sign it.You will usually pay the cost of the lease preparation.The lease should be registered on title of the property to protect your interest in the property.Hope this helps and best of luck.

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