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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 that 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

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.

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.

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.