Most tenants focus on the make good clause in their lease and assume the scope of the work is written there. In practice, the clause sets the principle; the scope is set by a separate document that lands closer to lease end: the dilapidation schedule. That document, and the way it is worded, does more to shape the size of the exit bill than the lease itself.
The schedule is the place where general lease language becomes a specific line-by-line list of work. That is where ambiguity converts into cost, and where tenants who understand the document have more commercial room than tenants who treat it as a formality they signed up for three or five years earlier.
Defining A Standard Dilapidation Schedule
A dilapidation schedule is a document prepared by or on behalf of the landlord that lists the items the tenant is expected to repair, reinstate, or restore at the end of a lease. It is usually drafted by a building surveyor or property consultant, and it reads as an itemised inventory with a description of each defect, reference to the lease clause it relates to, and a proposed remedy.
There are typically two kinds. An interim schedule is issued during the lease, often when the landlord wants to flag issues early or protect the building’s condition before a major tenant event. A terminal schedule is issued towards the end of the lease, often in the last three to eighteen months, and is the version most tenants encounter. The terminal schedule is what the tenant uses to scope, quote, and deliver the make good works.
The schedule is not the lease. It is an interpretation of the lease applied to the physical condition of the tenancy at a specific point in time. Two surveyors looking at the same premises can produce meaningfully different schedules, and the wording they choose has direct commercial consequences for the tenant.
Why Schedules Over Clauses Drive Make Good Costs
The lease clause usually says something general: return the premises in good condition, fair wear and tear excepted, to base building or to an agreed state. That language sounds clear until you try to convert it into a scope of work. What counts as good? What is fair wear and tear on twelve-year-old carpet? What is base building in a floor that has been fitted out three times since the shell was delivered?
The dilapidation schedule is where those questions are answered, in writing, by a party acting for the landlord. Once the schedule lands, the tenant is effectively responding to the landlord’s interpretation of those questions. Items listed are priced. Items not listed are not. Wording like “replace ceiling tiles in affected areas” costs very differently from “re-grid and re-tile the entire meeting room zone”. The same principle applies to flooring, paint, partitions, and built-in joinery.
This is the quiet reason two tenants in identical leases end up with make good bills that differ by a factor of two. The clause is the same; the schedule is not.
Importance Of Lease Commencement Condition Reports
The strongest protection a tenant has against an expansive dilapidation schedule is evidence of what the premises looked like on day one. A schedule of condition, prepared at or near lease commencement and ideally attached to the lease, records the state of the tenancy before the tenant moved in. Photographs, written descriptions, and measurements form the record.
When a terminal schedule arrives three or five years later, the schedule of condition is what separates pre-existing defects from damage the tenant is accountable for. Without it, almost any mark, scuff, or worn finish can be attributed to the occupancy. With it, items already present at the start are clearly outside the make good scope.
Most tenants skip this step at lease start because the focus is on getting into the space. It looks like paperwork that can wait. In practice, skipping it shifts leverage to the landlord at exit. A photographic record produced in the first week of occupation, covering every wall, ceiling, floor zone, and piece of base-building equipment, is cheap to create and expensive to do without. It is worth insisting on even when the landlord or agent has not routinely prepared one.
Typical Contents Of A Terminal Schedule
Terminal schedules vary in format but cover a recognisable set of items. The ceiling is usually described grid by grid, with stained, damaged, or missing tiles identified. The floor finishes are listed by zone, with carpet condition, tile damage, and any missed reinstatement called out. Paintwork appears next, with walls, doors, skirtings, and trims described individually if defects are present.
Partitions attract particular attention. Any walls the tenant installed, whether plasterboard or glass, are typically scheduled for removal unless the lease expressly permits them to remain. Services that run to those partitions are also listed: data cabling, power reticulation, and any HVAC diffusers relocated at fitout stage.
Kitchens, joinery, and any specialist fitout items get their own lines. Signage, graphics, and branding elements are almost always scheduled for removal. Base building items that were modified during the occupancy, such as a relocated thermostat or a moved sprinkler head, are the category that often surprises tenants because those items are not usually front of mind.
The schedule may also include “allowable deductions” where the landlord has decided to absorb certain items, for example because they intend to refurbish the floor for a new tenant and have no interest in reinstating the existing finishes. Those concessions are commercial, not obligatory, and they move depending on the re-letting strategy for the floor.
Critical Analysis Of Proposed Scope
When a terminal schedule arrives, the useful first read is to treat it as a proposed scope, not a confirmed one. Every line falls into one of three categories: clearly the tenant’s responsibility, clearly not, or arguable. The arguable category is where commercial value is found or lost.
Items to look at carefully include: items listed as “replace” where “repair” would be a reasonable alternative; items that reference fitout elements installed with landlord approval and where the approval may permit them to stay; items identified as damage that were likely pre-existing; and items that describe works in more extensive terms than the defect requires. Any of these are worth a considered response rather than an acceptance in full.
It also helps to read the schedule alongside the lease clause it relies on, not in isolation. Some schedules quietly extend beyond what the clause actually requires, and the only way to see that drift is to check the source. A working understanding of what is required and what is negotiable in most NSW commercial leases is the lens that makes the drift visible.
Where the schedule interprets the clause reasonably, the conversation shifts to method and scope rather than principle. Where it overreaches, the tenant has room to respond. Neither case is adversarial; both are commercial conversations between parties with different starting positions.
Practical Checks To Limit Schedule Reach
Most of the work that keeps a dilapidation schedule contained happens before it is issued, not after. A tenant who treats the lease exit as a twelve-month project rather than a six-week panic typically finishes with a smaller schedule and fewer surprises in it.
Useful checks in the last twelve to eighteen months include a walk of the tenancy with the fitout in mind, listing anything the tenant installed, anything that has been modified, and anything visibly worn or damaged. The list is compared against the lease to see what falls inside the occupier’s responsibility. Items that are clearly due for reinstatement can be actioned on a programme that suits the business, often alongside a new fitout elsewhere, rather than in the compressed window before handover. Starting the defit strategy before the new fitout is the single move that most often reduces the terminal schedule’s reach.
Equally useful is a review of any fitout approvals on file. Tenants often forget which works the landlord formally approved, and those approvals can permit elements to remain that might otherwise be scheduled for removal. Missing approvals, or undocumented alterations, sit at the opposite end and tend to attract broader schedule language.
Where the tenancy has had multiple occupancies stacked on top of each other, the difference between strip-out and make good starts to matter. A clear record of what the current tenant is actually responsible for, as distinct from what earlier tenants left behind, keeps the schedule focused on the right period of occupation.
When To Engage Specialists For Schedule Responses
For smaller tenancies with light fitouts, a tenant with good records can often read and respond to a terminal schedule without outside help. For larger floors, older tenancies, or anything with a history of alterations, a specialist review before responding usually pays for itself several times over. The reviewer is looking at method, at scope boundaries, at pre-existing condition evidence, and at the commercial realities of what the landlord plans to do with the floor after handover.
This is less about disputing the schedule than about understanding what is genuinely owed and what is simply proposed. A well-scoped response confirms the items that are clearly the tenant’s to deliver, proposes method alternatives where they are reasonable, and flags items that appear to extend beyond what the lease supports. That kind of response tends to produce a faster, tighter settlement than either a blanket acceptance or a blanket pushback.
If you have a terminal dilapidation schedule in hand, or a lease end in view and no schedule of condition to work from, we can walk through the document with you, help scope a sensible response, and deliver the defit and make good works against a scope that reflects what is actually owed.
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