Lease end-of-term dilapidations review checklist (AU)
Dilapidations disputes frequently settle on evidence of condition at handover and the construction of the make good clause. This checklist covers the 12 steps to manage exposure and maximise negotiation use.
This is a 12-step checklist for managing the end-of-term dilapidations on an Australian commercial or retail lease. It covers the make good standard, condition reports, dilapidations schedule, quantum of claim, and negotiation of cash-in-lieu. Use it 6 months before expiry.
The checklist
Review the lease make good clause
Extract the make good standard — bare shell, base build, refit — and the obligations on removal of tenant fit-out and branding.
Review the initial condition report
Locate the condition report and photos taken at lease commencement. Note any pre-existing damage.
Check retail lease overlay
For retail leases, review statutory limits on make good and the landlord's disclosure statement obligations.
Obtain current condition report
Commission a current condition report 6 months before expiry — photographic, systematic by room and element.
Identify wear and tear vs damage
Distinguish fair wear and tear (generally not make good) from damage (make good). Clause-specific.
Review approvals and works history
Review landlord approvals for alterations — fit-out, partitions, services. Identify unapproved works.
Scope removal of tenant fit-out
Scope removal of tenant fit-out including joinery, signage, and any services beyond base build. Preserve approved alterations.
Obtain quantum estimates
Obtain QS or builder estimates for full make good. Build a range — realistic vs landlord aspirational.
Consider cash-in-lieu negotiation
Negotiate cash-in-lieu payment rather than works. Consider vacant possession timing and landlord's re-lease plans.
Review handover logistics
Plan handover timing, services disconnection, and key return. Avoid hold-over by delayed works.
Document handover condition
Document condition at handover — joint inspection where possible, detailed photos, condition report signed.
Respond to dilapidations schedule
If landlord issues a dilapidations schedule, respond item by item with accept/reject/counter positions.
When this checklist applies
Use this checklist 6 months before lease expiry — or sooner for complex premises. Work with a quantity surveyor and a property lawyer jointly.
Common pitfalls
- Make good standard misread — bare shell vs base build vs refit
- No initial condition report — tenant cannot prove pre-existing damage
- Unapproved alterations not resolved before expiry
- Fair wear and tear conceded unnecessarily
- Hold-over triggered by unfinished works — punitive rent
Run this checklist on a real matter
Quillio reviews make good clauses, drafts dilapidations responses, and models cash-in-lieu vs works scenarios. See /practice-areas/property-lawyers or start a free trial.
Make good disputes are fact-sensitive and evidence-heavy. Engage a QS early and preserve photographic evidence.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
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