Funky Floor Fails

DI wants to open a custom dress shop and after inspecting a few retail premises, settles on a location.

Prior to signing the lease, Di and lessor, Martin, discuss Di’s idea of relaying the floor with a funky tile and paint the shop, as the off-white colour did nothing for the ambience Di sought to create.

Di was happy to invest in shop improvements as she intended to sign a five-year lease with a five-year option to renew.

The shop proved very successful, and after five years in the premises, Di was ready to lease a larger shop.

Prior to leaving the shop, Martin inspects the premises and discovers that Di has not removed the new flooring and he dislikes the brightly painted walls.

Martin demands that Di ‘make good’ the premises as stated in the written lease.

Generally, ‘making good’ refers to removing any improvements or alterations made by the lessee, making repairs and restoring the property to its original layout and appearance.

Marin tells Di that he is going to deduct the cost of restoration from her security deposit and if necessary pursue legal action to recover any additional costs of ‘making good’.

Di argues with Martin; stating that the flooring and happily painted walls are all improvements and that therefore his demands are not reasonable.

Martin is not happy about the walls and says there is nothing cool about the funky floor.

Di reluctantly consults her solicitor, who unfortunately tells her that she is required to make good under the terms of the lease.

The solicitor further advises that the pre-contract discussions did not form part of the signed lease, and in these circumstances Di cannot rely on these initial discussions.

Di ultimately settles the matter.

It is important for parties to carefully review the lease agreement and understand their obligations.

It is always recommended to consult a solicitor prior to entering a lease.

Thank you to Anthony Fogarty for his assistance with this column.

Email Manny Wood, principal solicitor at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487.

By Manny WOOD, Solicitor