Cost-Effective End of Lease Office Make Good & Strip out Options

At times like these people are always looking to minimise expenses and save on unnecessary costs. For some companies this could often mean their current lease will be reviewed and moving out of their existing office might be a reality.

Lots of companies face the challenge of “Making good” or “De-fitting” their current office which is required in most lease agreements.

Typically, a lease will have and end of lease agreement where the tenant is required to make good the office of any fit-out or tenant works that have been done by the tenant during the tenancy. The make good settlement is often settled in one of two ways:

Option 1 – The tenant pays the landlord an agreed amount of money which passes the responsibly of the office make good back to the owner and you walk away.

Option 2 – The tenant returns the tenancy back to original condition and makes good the office such as walls, flooring, ceiling etc.

Option 1 at first glance may seem the simplest and easiest option however as a word of caution this option is often a lot more expensive and normally the benefits are slanted to the landlord rather than the tenant. Landlords will often get quotes from contractors (often ones they are very familiar with) at what could be slightly inflated prices and use this pricing to inflate the overall cost of make good meaning you pay a high price in settlement costs and more often than not the landlords don’t actually do the work meaning you have effectively gifted them $1000s of dollars.

The most cost-effective option is to manage the office make good yourself, however, this means contacting many various trades, getting quotes, ensuring these quotes are all apples for apples, checking if the contractors can complete the work in the timeframe required and then overseeing the office make  good project.

Issues businesses can face are;

  • Clearly scoping the works required
  • Not having the contact details for trusted contractors
  • Unsure if they are getting value for money
  • Lack of time to do this while still maintaining their normal business activities.

It is highly recommended so that you save time and money that you engage an external company that specialises in these sorts of projects, refurbishment contractors will clearly scope the minimum work that needs to be done to achieve the most cost-effective make good solution, obtain the markets most competitive contractor pricing and then manage the project through to completion.

The first place to start is with your landlord or land agent. Get a written confirmation what the make good expectations are, be prepared to negotiate as most landlords will claim more than what is required.

Next, engage a reputable company with knowledge of these sorts of projects, there are many companies out there and vary in size, cost and quality. Yes, websites and past jobs are a good place to start but also trust your gut.

Have a meeting with them, explain what you need and let them explain how they can help. They should ask you questions like, “what are the landlord requirements” “what is your budget” “what is your timeframe for works”

Once you have selected your preferred office make good refurbishment contractor, the company you engage will clarify the scope, draw up any working drawings if required and work with other specialist consultants such as fire engineers or HVAC technicians if required. They will engage their trusted network of contractors and develop a project plan. A trusted office refurbishment and make good contractor typically has open book transparent pricing so you can see the costs of each aspect of the job.

The office refurbishment make good project plan should always include, the timeframe, which contractor starts and finishes when i.e You cannot have the painter starting before the walls are repaired. Who will be your go-to contact for the project, giving you updates etc and of course a health and safety plan including a SSSP (Site Specific Safety Plan).

The right office refurbishment make good contractor should make this whole process easy, affordable and hassle-free. When moving the last thing you want to worry about is a call from your landlord saying your old site is not up to scratch.

Remember, be open about what is needed and more importantly trust your instincts.

Simon Carr – Sales and Marketing Manager Zhoosh.

Download our make good cost saving guide FREE.