Most tenants start thinking about defit when the new office is already being designed and the move date is approaching. By that point, the decisions that should have shaped the defit strategy have already been made without it, and the consequences arrive in the final weeks of the transition when there is no time or budget flexibility to absorb them. A defit that is planned early is a controlled, costed, scheduled scope of work. A defit that is left until the end is a scramble that costs more, takes longer, and creates disputes with the landlord that could have been avoided entirely.
This article covers why defit planning needs to start before the new fitout does, what decisions depend on it, and what happens when it is deferred.
Why Defit Is the First Decision in an Office Move, Not the Last
The sequence that most tenants follow is: find new space, design the new fitout, build the new fitout, move in, then deal with the old office. This sequence treats the defit as the final step, and it creates problems at every stage that follows. The new fitout budget does not account for defit costs. The new fitout programme does not account for defit timing. Furniture and equipment decisions in the new office are made without knowing what can be salvaged from the old one. And the defit itself is compressed into whatever time remains between the move and the lease end, which is often not enough.
Defit is misunderstood precisely because it is treated as an afterthought. When it is brought forward to the beginning of the planning process, it becomes a defined scope with a known budget, a known timeline, and a known set of obligations that inform every subsequent decision rather than a reactive exercise that disrupts them.
How Make-Good Obligations Define What You Actually Owe
The lease says “return to base building condition” or words to that effect. What that phrase actually requires depends on the specific lease, the specific landlord, the condition the space was in at the start of the lease, and any agreements made during the tenancy about modifications and reinstatement. In Sydney, landlords interpret make-good obligations broadly, and tenants who assume they know what is required without checking frequently discover at the end that the scope is larger than expected.
Make-good obligations under NSW commercial leases can include removal of all tenant-installed partitions, ceilings, and flooring. They can include reinstatement of base building services to their pre-tenancy configuration. They can include repainting, patching, and restoring surfaces to a condition that may be better than what the tenant received. Understanding the full scope early is essential because it determines the defit budget, the defit programme, and the decisions that need to be made about reuse versus removal. Tenants who discover additional make-good requirements in the final month face the choice between rushed, expensive compliance work and a lease extension negotiation conducted from a position of weakness.
What the Landlord’s Inspection Reveals About Your Real Timeline
An early landlord inspection of the existing tenancy is one of the most valuable steps in defit planning, and it is almost never done early enough. The inspection reveals what the landlord actually expects to see at handback, which may differ significantly from what the lease document describes. Landlords in Sydney frequently have specific expectations about ceiling grid condition, floor slab finish, fire services configuration, and documentation that are not spelled out in the lease but are enforced at make-good.
Understanding who pays for what is also clarified during this inspection, because some items that the tenant assumes are the landlord’s responsibility may in fact fall to the tenant under the make-good clause, and vice versa. The inspection also reveals practical issues such as the condition of services above the ceiling, whether asbestos is present in older buildings, and whether the ceiling void is accessible enough for efficient defit works. Each of these factors affects the defit programme, and discovering them in the final month rather than at the start adds time and cost that the programme cannot absorb.
Decisions That Must Be Made Before the New Fitout Is Designed
Several decisions about the new fitout depend directly on the defit strategy for the old one. Furniture reuse is the most obvious. If the existing furniture can be cleaned, refurbished, and moved to the new office, the new fitout budget can reallocate those funds to other elements. If the furniture is being discarded, the new fitout needs to include procurement, which has its own lead times and budget implications. This decision cannot be made sensibly without knowing the defit timeline, because furniture that is committed to the new office needs to be removed carefully from the old office, stored if necessary, and delivered to the new space at the right point in its construction programme. Demolition that begins before salvageable items are removed destroys the reuse opportunity permanently.
Partition reuse is another example. Demountable glass partitions from the old office may be reusable in the new space, but only if they are removed carefully, stored properly, and the new layout is designed to accept them. Making this assessment requires knowing what is in the old office, what condition it is in, and whether the defit programme allows time for careful removal rather than wholesale demolition. These are decisions that shape the new fitout design, and they need to be made before the new fitout drawings are finalised, not after. Once the new layout is committed and procurement has started, the window for incorporating salvaged elements from the old office closes, and the opportunity is lost regardless of the financial benefit.
The Cost of Leaving Defit to the Last Month
Defit that is compressed into the final weeks of a lease attracts premium costs across every dimension. Labour rates for after-hours and weekend work are higher. Waste removal on short notice is more expensive. Certification and inspection bookings that require lead time are rushed, which either delays the handback or requires additional fees to expedite. Landlord inspections that reveal additional scope create disputes that are resolved under time pressure, which weakens the tenant’s negotiating position.
The programme risk is equally real. A defit that was estimated at three weeks but actually requires five pushes the tenant past the lease end date, which triggers holdover rent that is typically set at a substantial premium to the base rent. The cost of two weeks of holdover rent on a Sydney CBD tenancy can easily exceed the entire defit construction cost, which makes the cost of early planning look trivial by comparison. The landlord’s leverage also increases as the lease end approaches, because the tenant’s need to vacate on time is greater than the landlord’s urgency to receive the space back. Negotiating additional time from a position of urgency produces worse outcomes than negotiating realistic timelines from a position of planning.
How Sydney Building Rules Compress Defit Timelines
Sydney commercial buildings impose the same access restrictions on defit works as they do on fitout works. Noisy demolition is restricted to after-hours periods. Goods lift access is shared and needs to be booked. Waste removal routes and times are prescribed. Fire services isolation, which is required during demolition of fire-rated partitions and ceiling works, needs to be coordinated with building management and may affect other tenants on the same floor or in the same fire compartment.
Strip-out and make-good are different scopes that often require different trades and different sequencing, and the building’s rules may constrain how they overlap. A tenant who assumes the defit can be completed in one concentrated push over a weekend frequently discovers that the building’s rules spread the work across two to three weeks, which is time that was not accounted for in the move programme. Fire services isolation alone can require multiple bookings across separate visits, each coordinated with the building’s fire services contractor and each subject to minimum lead times that cannot be compressed regardless of how urgently the tenant needs to vacate.
Starting Defit Strategy at the Right Point
The right time to start defit planning is when the decision to move has been confirmed, ideally before the new fitout brief is finalised. This allows the defit scope to be assessed against the lease, the landlord’s expectations to be clarified through early inspection, the reuse opportunities to be identified and costed, and the defit programme to be integrated with the new fitout programme so both projects share a single critical path. The total cost of this early planning is a fraction of the cost of the problems it prevents, and it converts the defit from a source of end-of-lease stress into a defined, managed phase of the move.
We deliver defit and make-good projects in Sydney as standalone scopes and as part of coordinated office relocations. If you are planning a move and want to get the defit strategy right before the new fitout decisions lock in, we can help.
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