When my retail lease ends

Date

What do I need to do?

Your lease will tell you what you need to do when it ends. You may need to simply leave the space empty, clean, tidy and secure. You may have to remove fittings and fixtures and make good the damage you make on removal. You may have to repaint or recarpet the space. These are important obligations and landlords are usually concerned to see that tenants leave the property in an agreed condition.

Sometimes a landlord will accept a cash payment instead of requiring you to ‘make good’, that is, return the space to the condition it was in before the lease commenced. (You can see why taking notes and photographs before you sign a lease is important). Be careful – sometimes you may be required to return the space to an even better condition than before the lease commenced. Even though the landlord may want your fittings, they can still make you pay to make good if it is in the lease. That is why it is important to sort this out before you sign. There are no hard and fast rules – this is a matter for you to negotiate and write into the lease.

Until you do all you have to do, your landlord can continue to charge you rent. Your landlord may be able to take items you leave in the retail space at the end of the term. The landlord may have to store these – usually at your cost – or may be able to claim them as their own. (See ‘make good’ in Dictionary).

CASE STUDY

Dispute as to ‘make good’

Phil’s lease is coming to an end and he is required to remove all of his fit out and to repaint the premises and remove any flooring that he has put in the premises, and to generally leave the premises in the condition that he found the premises in when the lease started. Phil does the relevant works and vacates the premises. However, the landlord calls Phil and says that Phil has not removed the glue residue that he applied when installing his tiled flooring. The landlord is saying that Phil can either come back and remove the residue or the landlord will do it and then charge Phil for the works. The landlord is also saying that the landlord will still be charging Phil rent while the glue residue remains.

It is important to review the make good obligations under a lease. Make good can be a significant cost at the end of a lease. If a tenant fails to comply with its obligations a landlord will generally have rights to

undertake the works themselves and charge the tenant for the works or continue to charge rent to the tenant.