Commercial Make Good Sydney: Obligations, Costs & Process Guide

Last updated: 3 September 2026

Commercial make good in Sydney refers to the contractual obligation for commercial tenants to restore leased premises to their original or agreed condition before vacating at lease end. Whether you’re removing partitions, patching walls, reinstating flooring, or stripping out an entire fitout, commercial make good in Sydney typically costs between $50 and $350 per square metre depending on the scope defined in your lease. Sydney Fitout Group manages commercial make good works for businesses of all sizes across the Sydney CBD and metropolitan area — planning, scoping, and completing every requirement on time and within budget.

What Is Commercial Make Good?

A make good clause — also called a reinstatement clause or dilapidations clause — is a standard provision in Australian commercial leases that defines what a tenant must do at the end of the lease term. It’s not simply about cleaning up. Depending on how the clause is worded, commercial make good in Sydney can require:

• Removal of all tenant-installed partitions, walls, and structures
• Stripping out joinery, built-in cabinetry, and custom fitout elements
• Reinstatement of flooring to base building condition
• Patching, repainting, and repairing all wall surfaces
• Decommissioning and reinstatement of electrical, data, and HVAC services
• Removal of signage, branding, and tenant-specific finishes
• Restoring amenities and wet areas to original specification

Not all make good clauses are the same. Some require only a basic “strip-out and clean,” while others mandate full reinstatement to the base building condition as detailed in the original building specification documents. The difference between these two scenarios can be tens of thousands of dollars — which is why reading and interpreting the clause carefully before engaging contractors is critical.

Commercial Make Good Sydney: Costs and What Drives Them

Commercial make good costs in Sydney vary considerably based on tenancy size, lease terms, fitout complexity, and building age. As a general guide from Sydney Fitout Group’s project experience:

• Basic make good (light strip-out, repaint, clean): $50–$100/m²
• Moderate make good (partition removal, flooring reinstatement, electrical): $100–$200/m²
• Full reinstatement to base building condition: $200–$350/m²

For a 300 m² tenancy, this means a realistic commercial make good budget in Sydney can range from $15,000 for a straightforward strip-out to over $100,000 for complex full reinstatement works. Several factors push costs in either direction:

Factors That Increase Commercial Make Good Costs

• Volume of partitions and walls installed: Every partition that must be demolished adds demolition, waste removal, ceiling patching, and flooring repair costs.
• HVAC reinstatement: Mechanical services decommissioning typically runs $30–$80/m² on its own. A 500 m² tenancy can spend $15,000–$40,000 on HVAC make good alone.
• Hazardous materials: Older Sydney CBD buildings may contain asbestos in floor tiles or ceiling materials. Asbestos removal requires licensed contractors and substantially increases cost and timeline.
• Custom joinery and built-ins: Reception counters, custom cabinetry, and built-in storage must all be removed cleanly without damaging the structure.
• Flooring condition: If the subfloor beneath your floor covering was damaged during the tenancy, reinstatement goes deeper than a simple peel-up.
• Building age: Older buildings often have heritage constraints or unusual materials that require specialist trades and higher labour rates.

Factors That Reduce Commercial Make Good Costs

• Lease negotiation at entry: Tenants who negotiate make good obligations at lease commencement — and record them in writing — often have a more limited scope at exit.
• Well-maintained tenancy: Premises kept in good condition throughout the lease reduce reinstatement scope to only fitout removal rather than damage repair.
• Retained base building elements: If your fitout didn’t alter core services, structural walls, or base building finishes, the reinstatement scope is inherently smaller.
• Landlord agreement to retain fitout: In some Sydney commercial property markets, landlords actively want to retain tenant fitouts for subsequent tenants. Engaging in early negotiation can eliminate strip-out costs entirely.

Understanding Your Commercial Make Good Obligations in NSW

In New South Wales, make good obligations for commercial tenancies are primarily governed by the lease agreement itself rather than legislation. The Retail Leases Act 1994 (NSW) applies to retail premises, but for general commercial office and industrial tenancies, the lease contract is the primary document. This means the precise obligations of commercial make good in Sydney depend entirely on how the clause is drafted.

Common make good clause types include:

1. Return to original condition: Requires reinstatement to the exact state documented at lease commencement — the most demanding standard, typically confirmed against an incoming condition report.
2. Good repair and condition: A more subjective standard allowing for fair wear and tear, but still requiring repair of damage and removal of fitout elements.
3. Strip-out only: Requires removal of all tenant fitout items but does not require reinstatement of the underlying surfaces to their original condition.
4. Fit for occupation: A relatively tenant-friendly standard requiring the space to be in a reasonable condition for a new tenant, without necessarily reverting to base building specification.

According to the RICS Make Good Australia Practice Information (3rd Edition, 2023), determining ownership of fit-out items relative to lease obligations is one of the most common sources of commercial property disputes in Australia. Engaging an experienced commercial make good contractor in Sydney who understands these distinctions is essential.

The Commercial Make Good Process in Sydney

Sydney Fitout Group follows a structured process for every commercial make good project. Here’s how the process typically unfolds from lease exit planning through to final handover:

Stage 1: Lease and Condition Report Review

The first step in any commercial make good project is a thorough review of the make good clause alongside the incoming condition report from lease commencement. This comparison defines exactly what must be done — and what falls outside the scope. We identify every element that requires removal or reinstatement and document the scope in writing before any work begins.

Stage 2: Commercial Make Good Scoping and Quoting

We conduct an on-site scoping inspection to measure, photograph, and assess every element of the required works. This produces a detailed scope of works document that forms the basis of a fixed-price quote. Our quotes for commercial make good in Sydney cover all trades — demolition, joinery removal, flooring, ceiling, electrical, data, HVAC, painting, and final clean.

Stage 3: Programme and Trade Coordination

Commercial make good works in Sydney typically need to be completed within a tight end-of-lease window — often two to six weeks. We develop a detailed programme coordinating all trades to achieve practical completion before the lease expires. This avoids holdover rent exposure, which can run at 150% of base rent in many Sydney commercial leases.

Stage 4: Demolition and Strip-Out

The physical works begin with demolition of partitions, removal of joinery and fitout elements, and careful strip-out of all tenant-installed items. We work methodically to avoid damage to building fabric, base building services, and surfaces that are not part of the reinstatement scope.

Stage 5: Services Reinstatement

Electrical, data, HVAC, and hydraulic services are decommissioned, capped, or reinstated to base building specification as required by the lease. This stage requires coordination with the building’s facilities manager and, in some cases, sign-off from building services engineers.

Stage 6: Surface Reinstatement and Finishing

Walls are patched and repainted, ceilings are repaired, flooring is reinstated, and any damaged building fabric is restored. The goal is to return the tenancy to the condition documented at lease commencement — or to the agreed standard specified in the lease.

Stage 7: Final Inspection and Handover

We walk the completed works with the landlord or their representative, addressing any minor defects identified. Once sign-off is obtained, the bond or security deposit held by the landlord is released. A professional final clean completes the handover.

Commercial Make Good vs. Office Strip-Out vs. Office Defit: What’s the Difference?

These three terms are often used interchangeably in Sydney’s commercial property market, but they describe different scopes of work:

• Strip-out refers specifically to the removal of all tenant-installed fitout elements — furniture, partitions, joinery, cabling, and floor coverings. It doesn’t necessarily include surface reinstatement.
• Defit is broadly synonymous with strip-out — the systematic removal of a fitout to leave the space in an emptied state.
• Commercial make good encompasses strip-out plus whatever reinstatement, repair, and restoration works are required by the lease clause. It’s the broadest scope of the three.

Understanding this distinction matters for budgeting. If your lease requires a “full make good to original condition,” a strip-out quote from a demolition contractor will not capture the full cost. Sydney Fitout Group provides complete commercial make good services that cover the entire scope — from strip-out through to final presentation-ready reinstatement. Learn more about our make good services.

Commercial Make Good Timeline: How Long Does It Take?

Timeline is one of the most common concerns for Sydney tenants facing lease exit. Most commercial make good projects in Sydney follow this general schedule:

• 3–6 months before lease expiry: Review the make good clause, obtain condition report, engage Sydney Fitout Group for scoping and quoting
• 6–8 weeks before expiry: Confirm scope, agree programme with landlord, finalise trades and materials
• 2–6 weeks before expiry: Physical works commence — demolition, strip-out, services reinstatement, surface works
• Final week: Defect rectification, final clean, landlord inspection, handover

For larger tenancies — above 500 m² — allow a minimum of four to eight weeks for physical works, and up to twelve weeks for complex reinstatements in heritage or high-specification buildings.

Starting early is the single most effective way to control commercial make good costs in Sydney. Late engagement forces trades to work in compressed timeframes, which increases labour costs and creates risk of holdover penalties.

Why Sydney Businesses Choose Sydney Fitout Group for Commercial Make Good

Sydney Fitout Group specialises in commercial make good and office fitouts across Sydney. Our make good team combines project management, trade coordination, and lease clause expertise to deliver compliant, on-time handovers for commercial tenants. Key reasons Sydney businesses engage us:

• Single point of responsibility: We manage every trade — demolition, electrical, HVAC, flooring, joinery, painting, and clean — under one contract and one programme.
• Lease clause interpretation: We read your clause, compare it to the condition report, and scope only what’s required. No over-scoping, no unnecessary spend.
• Fixed-price quotation: Our commercial make good quotes are fixed-price, not provisional. You know your full exposure before works begin.
• Sydney-wide coverage: We deliver commercial make good across Sydney CBD, North Sydney, Parramatta, Macquarie Park, St Leonards, Pyrmont, and the Inner West.
• Proven track record: View our completed projects to see the quality of workmanship we deliver across office fitouts and make good works.

We also work with tenants who are simultaneously commissioning a new office fitout at their incoming premises, giving us a unique ability to coordinate both outgoing make good and incoming fitout programmes. Explore our full range of services or contact us for an obligation-free consultation.

Negotiating Your Commercial Make Good Obligations: Tips for Sydney Tenants

While make good obligations are largely set at lease commencement, there is often more room for negotiation than tenants realise — both at entry and at exit. Here’s what experienced Sydney commercial tenants do to manage this risk:

At Lease Commencement

• Commission a detailed condition report: A professionally prepared incoming condition report documents every defect and the exact state of the premises on day one. This becomes your reference point at lease end.
• Negotiate the make good clause in detail: Seek to limit reinstatement obligations to strip-out only, rather than full restoration to original condition. Get any landlord consent to fitout works in writing, with clear notation of whether reinstatement will be required.
• Request a cash-in-lieu option: Many Sydney landlords will accept a cash payment in lieu of physical make good works — particularly if they’re planning a refurbishment themselves. Negotiate this option into the lease at commencement.

At Lease Expiry

• Engage early: Contact Sydney Fitout Group 3–6 months before expiry. Early engagement gives you negotiating leverage and avoids compressed programme costs.
• Open dialogue with the landlord: If the incoming tenant wants to retain your fitout, or if the landlord is planning a building refurbishment, your make good scope may be reduced or eliminated.
• Dispute inflated claims: Landlords cannot recover betterment — improvements beyond the condition documented at lease commencement. If a landlord’s make good demand includes upgrades, these can be disputed.

Frequently Asked Questions: Commercial Make Good Sydney

What does commercial make good in Sydney actually involve?

Commercial make good in Sydney involves restoring a leased commercial space to the condition required by the lease agreement at the end of the tenancy. This typically includes removing all tenant-installed fitout elements, repairing any damage caused during the tenancy, reinstating base building services, and returning surfaces to their original or agreed condition. The exact scope is defined by your lease’s make good clause.

How much does commercial make good cost in Sydney?

Commercial make good costs in Sydney range from $50–$100/m² for basic strip-out and clean, to $100–$200/m² for moderate works including partition removal and service reinstatement, to $200–$350/m² for full reinstatement to base building condition. A 300 m² tenancy should budget $15,000–$100,000 depending on scope.

How long does commercial make good take in Sydney?

Most commercial make good projects in Sydney take 2–6 weeks for the physical works phase. Larger tenancies (500+ m²) or complex reinstatements can take 8–12 weeks. Planning should begin 3–6 months before lease expiry to allow adequate time for scoping, quoting, and trade coordination.

Can I negotiate my commercial make good obligations?

Yes. Make good obligations can often be negotiated both at lease commencement and at lease exit. At commencement, you can limit the reinstatement scope and obtain clear written consent to fitout works. At exit, you may be able to agree a cash-in-lieu payment or negotiate a reduced scope if the landlord intends to refurbish the space or if an incoming tenant wants to retain the fitout.

What is the difference between commercial make good and a strip-out?

A strip-out refers specifically to the removal of tenant-installed fitout elements. Commercial make good encompasses the strip-out plus all additional reinstatement, repair, and surface restoration works required by the lease clause. Commercial make good is the broader scope and may cost significantly more than a strip-out alone.

Do I need council approval for commercial make good works in Sydney?

In most cases, commercial make good works — being primarily demolition and reinstatement rather than new construction — do not require a Development Application. However, works involving structural alterations, changes to fire services, or heritage-listed premises may require approval. Sydney Fitout Group advises on all statutory requirements as part of the project scoping process.

Can Sydney Fitout Group manage the full commercial make good process?

Yes. Sydney Fitout Group provides a full-service commercial make good solution — from lease clause review and condition report analysis through to scoping, fixed-price quotation, trade coordination, physical works, and landlord handover. We manage every trade under one contract and one programme, giving tenants a single point of responsibility throughout the process.