Guides · Lease obligations

Lease-End Move-Out Obligations: Restoration & Make-Good Clauses

What a commercial lease actually requires before you hand back the keys, and how to avoid a surprise bill.

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Short answer: Most commercial leases require restoring the space near its original condition — measured against a documented schedule of condition, not a general impression. Missing the standard lets the landlord complete the work and bill the tenant, sometimes with holdover rent added.

The clause that determines what "done" means

"Original condition" is where disputes start

Most commercial leases contain a restoration or "make-good" clause. It obligates the tenant to hand the space back in roughly the same state it was in before they moved in. The trouble starts with the definition of "original condition." Without paperwork showing exactly how things were, landlords and tenants can end up in honest disagreement over how the space looked several years ago.

Lease restoration essentials

Reference point

Schedule of condition from lease start

Typical scope

Remove buildout, patch walls, restore flooring/lighting

If missed

Landlord completes work + bills tenant + possible holdover rent

Negotiable?

Sometimes, at lease renewal

A completely empty office space with bare walls and polished floors — Returning the space to its documented condition

The schedule of condition is the real reference point

Not a general impression — a document

The schedule of condition is the real yardstick for restoration, provided it was documented and agreed on at the start of the lease — it's not a general impression of "how it used to look." If one wasn't created at lease signing, reconstructing one as early as possible before move-out, using whatever photos or records exist from move-in, is worth doing before decommissioning starts rather than after a dispute arises.

What restoration typically covers

Scope depends on what changed during the tenancy

Typical restoration work includes tearing out tenant improvements and built-out alterations, patching walls, returning flooring and lighting to a baseline condition, and removing signage. The exact scope hinges on the lease language and the actual changes made during the tenancy — a space with minimal buildout carries a much smaller obligation than one that saw extensive custom construction.

What happens if the work isn't done Miss the landlord's standard by lease end, and the landlord can usually complete the work and bill the tenant for the cost — sometimes adding holdover rent for the extra time the job takes. Those two costs combined can turn a manageable restoration into a surprisingly large bill, which is why confirming the standard and timeline well before the lease expires deserves more attention than it often gets.

Negotiating the scope before it's a problem

The original lease isn't necessarily fixed

Certain restoration terms can be negotiated during lease renewal or renegotiation. Landlords may agree to let some improvements remain if they benefit the next tenant, while insisting on removal of others. Starting that discussion with the landlord or property manager before decommissioning begins, instead of treating the original lease as carved in stone, can shrink both the scope and the final bill.

Deposit return, the walkthrough, and disputes

The lease clause that decides the timeline

Unlike residential deposits in most states, commercial lease security deposits typically fall outside the statutory return timelines and mandatory itemized-deduction rules that govern residential agreements. The lease itself sets the return timeline; when the lease is silent on timing, the landlord has broad discretion over when and how the money comes back — which makes this clause worth reviewing well before move-out, not only the restoration clause.

The final walkthrough is the practical checkpoint for judging whether restoration is complete before the deposit and keys change hands. Ideally the tenant and the landlord or property manager conduct it together, using the documented schedule of condition as the reference — a joint inspection, rather than a landlord inspecting alone after the tenant has departed, allows the tenant to address or contest problems on the spot.

If the restoration bill looks inflated Ask for an itemized breakdown, and if the numbers still seem off, get an independent contractor's estimate to compare against before agreeing to the landlord's figure. Disputes over restoration costs happen often enough in commercial leasing that solid documentation — photos, the schedule of condition, comparison estimates — gives the tenant real leverage. Some leases include a dispute-resolution clause calling for arbitration; check for that language before assuming any conflict heads to court.

A bare wall corner with patched nail holes and a paint roller — Broom clean has a literal meaning in most leases

Frequently asked questions

What is a lease 'make-good' clause?

A restoration clause requiring the tenant to return the space to roughly its original condition before returning the keys — removing built-out improvements, patching walls, and undoing tenant alterations.

What determines 'original condition'?

A schedule of condition documented and agreed at the start of the lease is the real reference point — not a general impression of how the space used to look. If none exists, reconstruct one before decommissioning starts.

What happens if restoration isn't completed by lease end?

The landlord can typically complete the work and bill the tenant, sometimes with holdover rent added for the extra time it takes.

Can restoration terms be negotiated?

Yes, sometimes at lease renewal or renegotiation — landlords may agree to let some improvements remain if they benefit the next tenant. Raise this before decommissioning begins, not after.

When is a commercial security deposit returned?

Whatever the lease itself specifies — commercial deposits generally aren't subject to the statutory timelines that govern residential ones. If the lease is silent on timing, the landlord has considerably more latitude, making this clause worth reviewing before move-out.

Who conducts the final walkthrough?

Ideally the tenant and landlord jointly, using the documented schedule of condition as the reference — a joint walkthrough lets the tenant address or dispute issues on the spot rather than after a unilateral landlord inspection.

What if the landlord's restoration bill seems inflated?

Request an itemized breakdown and, if needed, an independent contractor estimate for comparison before accepting the landlord's number. Photos, the schedule of condition, and comparison estimates meaningfully strengthen a tenant's position.

Can restoration disputes go to arbitration?

Some commercial leases include a dispute-resolution clause specifying arbitration — check the lease for this before assuming a disagreement means litigation.

Sources

Published 2026-09-06. Reviewed against sources current as of that date — see how we rate. This is general information, not legal advice — consult a commercial real estate attorney for your specific lease.