The make-good clock does not start when a tenant hands the keys back. It does not start when the dilapidation schedule lands either, although that is the moment most tenants finally notice it. In a Sydney commercial lease, the clock has been running quietly from the start of the tenancy, and the windows that actually matter sit weeks and months before the exit date, not at it.
That is why the same tenant, in two identical buildings, can hit make good with very different exposure. The exit date is the same. The lease clause is the same. What differs is how much of the timeline they used before they got there.
The Three Clocks Most Tenants Confuse
There are three timing instruments inside a commercial lease that all affect make good, and they are easy to confuse with one another. The lease term, which fixes when the tenancy ends. The notice period in the lease, which fixes when the landlord is contractually allowed to start issuing instructions about reinstatement. And the dilapidation cycle, which is the practical process that runs from condition baseline to final scope to physical works to sign-off.
Most tenants pay close attention to the first, glance at the second, and ignore the third until the dilapidation schedule arrives. By then, several of the most useful windows have already closed.
The First Window: Lease Commencement Condition
The make-good obligation is almost always anchored to a condition recorded at lease commencement. The condition report or schedule of condition signed near the start of the tenancy is the document against which everything is later measured. If that document is vague, missing, or biased in the landlord’s favour, the make-good obligation at lease end will be wider than the tenant assumed.
This is the easiest window to use and the one most tenants miss. A photographic condition report taken in the first weeks of occupation, agreed with the landlord, sits inside the lease file for the rest of the tenancy. Without it, the landlord’s terminal schedule is allowed to interpret the starting condition more generously. Photographic condition reports are not a make-good document in name, but they are the document the make-good schedule has to argue against.
The Second Window: Mid-Lease, When Damage Or Alteration Happens
Walls get put up. Cables get pulled through ceilings. Floor finishes wear. Doors get knocked. None of this matters much to the operations of the tenancy, but every alteration is something the make-good schedule will eventually have to either accept or roll back.
The useful window here is at the time the alteration happens. A partition added under landlord approval should be recorded in a way that captures whether it is staying at lease end or being removed. A services modification under base building consent should sit in a file with the consent letter attached. The tenant who keeps a thin folder of these as they happen has a defensible position when the dilapidation schedule lists items for reinstatement. The tenant who has nothing in that folder is exposed to whatever the schedule asks for.
The Third Window: Notice And The Dilapidation Schedule
The lease usually requires the landlord to issue a dilapidation schedule, sometimes called a terminal schedule or schedule of dilapidations, within a defined window before lease end. The window varies but typically lands six to nine months before expiry for a standard NSW commercial lease.
This is the most-noticed window because it produces a physical document with a list and a date. It is also the most aggressively interpreted, because the landlord has incentive to scope wide and the tenant has very little time to push back. Dilapidation schedules in commercial office leases set out where the schedule’s authority comes from and how it sits against the lease clause. The point worth making about timing here is that the response window is short, and the longer the tenant takes to respond, the less room there is to negotiate scope before the works themselves have to start.
A practical rule is that a dilapidation schedule landing on day one of the response window should have a marked-up reply inside two weeks, not at the end of the window. The longer the tenant sits on it, the more the schedule starts to feel like a fixed scope rather than a negotiating position.
The Fourth Window: The Joint Walk-Through
Between the dilapidation schedule and the start of physical works sits the joint landlord walk-through. This is the meeting that, when used well, resolves more scope disagreement than any other step in the process. When skipped or held perfunctorily, it leaves the schedule untouched and the tenant carrying every item the landlord listed.
Timing on the walk-through matters. Held too early, before the tenant has had time to assess the schedule and prepare counter-positions, it locks in the landlord’s framing. Held too late, with works already programmed, it leaves no time to act on what was agreed. The joint walk-through before make good works best around thirty to sixty days before the programmed exit, with the dilapidation schedule already responded to in writing and a marked-up plan in hand.
The Fifth Window: Programme And Trade Booking
Physical make-good works for a typical Sydney commercial tenancy take between two and five weeks depending on size, scope, and after-hours requirements. Trades have to be booked, materials have to be specified, and access has to be arranged with the building manager. None of this happens fast.
The window that matters here is the one between the walk-through and the works. Six to eight weeks is comfortable. Three to four weeks is tight but workable. Less than that, and the programme starts skipping over decisions, which usually means scope gets added by trades on site rather than agreed in advance.
This window is also where partition material decisions, ceiling tile sourcing, and flooring stock availability become real constraints. Specialist tile or carpet that has to be sourced to match existing finishes can take longer to arrive than the works themselves take to execute.
The Sixth Window: Final Sign-Off And Bond Release
Physical handover is not the end. The lease usually requires a final landlord inspection and sign-off, and the tenant’s bank guarantee or bond release is conditional on that sign-off. Where defects are identified, the tenant returns to remedy them, and the bond stays out until the remediation is accepted.
The useful window here is the gap between practical completion of the works and the final inspection. Make good sign-off in office leases covers what the landlord can reasonably hold the bond against and where the line sits. The timing point is that final inspection should be requested promptly after completion, not weeks later, because the bond release timeline runs against the tenant for the duration.
Negotiation Leverage Changes Across The Sequence
Each of the six windows above gives the tenant a different kind of negotiating position, and the leverage shrinks as the sequence progresses. At lease commencement, the tenant has the strongest position to shape the make-good baseline because nothing has happened yet, the relationship with the landlord is starting fresh, and the cost of recording the starting condition fairly is trivial compared to the cost of arguing about it later.
Mid-lease, the leverage shifts. The tenant has business operations to run, alterations sit alongside other priorities, and the documentation cost feels higher than it really is. The leverage at this window is preserved by keeping a thin record rather than by being clever about it.
When the dilapidation schedule lands, the leverage is real but compressed. The tenant can argue items down, can push back on scope that goes beyond the lease, and can use the lease-commencement document as the counter-baseline. What the tenant cannot do at this point is create new evidence. The position is whatever the existing file supports, no more.
By the walk-through, the leverage is mostly procedural. Items the tenant can show evidence on get challenged. Items the tenant cannot show evidence on usually stay. This is also where the landlord agent’s discretion meets the tenant’s preparation, and a well-prepared tenant with a marked-up plan tends to leave with a smaller scope than one who arrives empty-handed.
By the time the works are running, the leverage is operational. Trade variations can be discussed, sequencing can be adjusted, and minor scope shifts can be agreed on site. But the broad shape of what is being done is fixed, and trying to renegotiate the scope itself once trades are on site usually costs more than it saves.
What Tenants Most Often Miss In The Sequence
Three patterns recur. The first is treating the dilapidation schedule as the start of the process rather than the middle of it. By the time the schedule lands, the lease-commencement document is fixed, the mid-tenancy alteration record is whatever it is, and the room to push back is limited to what the schedule itself asks for.
The second is leaving the response to the schedule until the end of the response window. The longer the schedule sits unanswered, the more it solidifies as the landlord’s expected scope, and the harder it is to negotiate items out.
The third is treating final sign-off as a formality. Where the bond is meaningful, the gap between practical completion and final inspection is where weeks of bond exposure quietly accrue. Requesting the inspection promptly is worth more than most tenants assume.
If we can help work through the timing on a make-good obligation in a Sydney commercial tenancy, respond to a dilapidation schedule that has just landed, or sequence the physical defit and make good works inside a programme the landlord and building manager will sign off on, this is the kind of timing work we walk tenants through regularly.
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