Make good clause
- Thread starter JIT
- Start date
Correct on all counts.
The make good clause can be very powerful. In large commercial buildings it can cost some tenants many millions of $$$ to move out.
Usually the owner will get a building surveyor to do a projected cost and often the tenant and owner will come to an arrangement whereby a sizable cash payment comes the way of the landlord so that the tenant can move out and leave the premises as they are.
If ou area tenat take photos when you move in and be very wary of these clauses.
cheers
RightValue
it can be full on. recently moved out of a office/warehouse building and felt the pointy end of this clause. all internal spaces to be repainted including doors and door frams and balustrades (talking about a 2 storey high warehouse and 2 level office!), air cons to be serviced and operational, all grease marks etc removed from floor, all lights to be operational any cracked covers to be replaced, roller doors serviced and working, outside to be cleaned, all signage removed, carpets cleaned if they didn't need replacing...goes on and on. bit different to leaving your junk in the garage and doing a runner!
Yes, that's a good point.
Ausprop,
Was all of the above and the full extent of the ''make good'' documented specifically in the lease?
Thanks.
A small section of a letter from me ;
Item 1 – Repainting
As per section 3.10 of the Lease, the Tenant shall “re-paint all those parts of the interior and exterior of the Premises as had been previously painted just prior to the Lease commencing in a good and tradesman-like manner and with good quality and suitable materials in colours and designs previously approved of by the Lessor”.
As the Landlord has not been presented with any requests for approval, we can only assume that this obligation upon the Tenant is still outstanding.
A small extract from the Tenant ;
We wish to seek approval to repaint the previously painted areas in the same colour that it was painted prior to taking possession of the building.
A small section of the reply from me ;
To enhance a fresh clean look, the Lessor will authorise the following
colours and materials for the re-painting of the warehouses ;
Paint Manufacturer : British Paints, Taubmans or Dulux only.
Paint Colour : Interior Walls - "Off White" only.
Office Ceiliings - "Brilliant White" only
Exterior Walls - "Off White" only
The total daily amount the Tenant shall be liable for every day it takes after the Lease expiry date to complete the make good commitments shall be $ x,xxx per day.
Hopefully, by the time the Tenants have finished doing what they need to do, the rusty old sheds will look schmicko and I can flog them out at a much higher rate to some mob who are silly enough to sign a Lease with me.
Nothing like a win/win to promote harmony. Happy days.
Thanks, that's gotta be worth something, but I'll take the freebie snippet.
Out of curiosity... is there a way to check that a wall has been painted with a specific brand?
Yes, but once the book is published you can start the seminar business ;
Dazz's commercial property bootcamp
How to make a million dollars through commercial property
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Remember that the more you charge the better your info must be, otherwise you wouldn't be charging that much would you?
PS. Nice touch on the liquidated damages clause on the paintjob.
