Commercial Carpets and Make Good: What Tenants and Owners Should Know

When a commercial lease comes to an end, the make good process decides what condition the premises are handed back in. For most offices, medical suites and many retail tenancies, carpet is one of the largest finishes in the space and one of the first things an owner, agent or incoming tenant looks at during the final inspection.

Whether the carpet needs a clean, a repair or full replacement depends on your lease, the condition of the carpet and what was agreed at the start of the tenancy. Getting that decision right, and being able to show you have done it, is what keeps a handover on schedule.

Start with what the lease actually says

Every lease is different, so the make good clause is the first place to look. The Small Business Development Corporation’s guide to ending a commercial lease notes that make good clauses can require a tenant to remove their fixtures or fit-out, repair damage, replace carpets, repaint walls and clean the premises, and that the lease should allow for normal wear and tear.

In practice, carpet obligations tend to fall into a few broad types. A clause might ask for floor coverings to be professionally cleaned, for damaged areas to be repaired or replaced, or for the tenancy to be returned to the condition it was in at the start of the lease. If the carpet was installed as part of the tenant’s own fit-out, the obligation may be to remove it altogether.

Read the clause alongside any fit-out approvals, variations and correspondence from the start of the lease. If the wording is unclear, raise it with the landlord or managing agent early rather than guessing.

Clean, repair or replace: how to decide

When a clean is the right answer

If the carpet is intact and the issue is soiling, a clean is usually what is needed. Common signs include traffic lanes through corridors and reception, general dullness, marks around kitchenettes and meeting tables, and spills that have not been treated. Commercial carpet takes a lot of foot traffic and wheeled chairs, so some wear is expected, but grime that comes out with cleaning is generally something you should deal with before you hand back the keys.

When a repair makes more sense

Localised damage can often be fixed without replacing the whole floor. Burns, a lifted seam, a stained section near a tea point or a small area of water damage may be repairable. Where the space has modular carpet tiles, individual tiles can be swapped out, ideally using spare tiles from the original installation so the colour and texture match.

When replacement is on the table

Replacement is more likely where the lease specifically requires it, where damage goes well beyond normal wear and tear, or where removing a fit-out leaves the floor in poor condition. Because this is the most expensive outcome, it is also the one most worth confirming in writing before any work is ordered.

Whichever category you fall into, agree the scope before spending money. A short written confirmation from the landlord or managing agent that a professional clean will satisfy the clause can save a lot of back and forth at the final inspection.

Where carpet cleaning fits in the make good program

The SBDC recommends allowing sufficient time at the end of the lease to complete make good requirements. A simple running order keeps the carpet work from being undone by other trades:

1. Remove furniture and fit-out items. Workstations, joinery, cabling and signage come out first, which also reveals any damage hidden underneath.
2. Complete repairs and painting. Patching, painting and any carpet repairs or tile replacements happen next, while there is still dust and foot traffic on site.
3. Clean the carpets. The clean should be one of the last jobs, after the final trade has left and before the inspection.
4. Inspect and sign off. Walk the tenancy with the landlord or agent and record the outcome.

When you engage carpet cleaning services for a vacating tenancy, ask about drying time as well as price, because the carpet needs to be dry before anyone walks it for the final inspection. Magic Dry, a WA-owned business that has been cleaning carpets here since 1971, uses a dry method with carpets dry in about two hours, and same-day bookings are available if an inspection turns up a mark that needs attention.

Build some contingency into the timeline. If the inspection identifies further work, you want time to complete it before the lease expires rather than negotiating costs afterwards.

Evidence that makes handover straightforward

A make good discussion is much easier when you can show what the premises looked like at the start of the lease and at the end. Good records take the guesswork out of that conversation.

• The ingoing condition report. If a property condition report was prepared when the lease began, the SBDC notes you can refer to it as part of the make good. Check what it says about the carpet, including any marks or wear that were already there.
• Dated photos before and after. Photograph each area before work starts and again once the clean or repairs are finished. Take wide shots of every room as well as close-ups of any pre-existing damage.
• Invoices and job sheets. Keep the carpet cleaner’s invoice showing the date and the areas that were cleaned, along with any repair or replacement invoices.
• Written sign-off. Obtain the landlord’s agreement in writing that the make good has been completed to their satisfaction before you hand back the keys or vacate, as the SBDC advises.

This matters financially. According to the SBDC, failing to make good may result in the landlord withholding the bond or charging additional costs, such as repair and cleaning costs.

For owners: setting expectations early

Owners can head off many carpet disputes well before a tenant starts packing. A clear make good clause, a detailed ingoing condition report with photos, and a pre-vacate inspection with enough lead time for the tenant to act all make the final handover simpler.

It is also worth thinking about what happens next. If an incoming tenant plans its own fit-out and new flooring, requiring the outgoing tenant to replace the carpet may achieve very little. Knowing your leasing plans before the make good discussion starts gives you more room to agree an outcome that suits the asset. Our property management and leasing teams work through these decisions with owners across commercial, industrial and shopping centre properties.

If you have a lease expiry coming up and are unsure what your make good obligations mean for the carpet, contact the Lease Equity team and we can help you plan the handover.