Maintenance obligations, CPI caps and make-good provisions quietly erode returns. Here's how to renegotiate them at renewal without losing the tenant.
Key takeaways
- Maintenance and make-good clauses quietly transfer cost back to landlords.
- CPI-only reviews erode real income when market rents move faster.
- Renewal is the only practical moment to reset weak terms.
The five clauses that matter
Renewals are usually treated as a rent conversation. In practice, the clauses that determine net income over the next term are maintenance obligations, outgoings definitions, review mechanisms, make-good scope, and assignment rights.
Each one can be renegotiated at renewal without threatening the relationship, provided the request is evidenced and traded rather than imposed.
Reviews and outgoings
A CPI-only review looks safe but underperforms whenever market rents outpace inflation. A CPI-or-market structure, with market reviews at set intervals, protects the upside while keeping the tenant's planning simple.
Outgoings definitions are frequently out of date. Confirm statutory charges, insurance, and shared plant servicing are all recoverable and clearly described, then reconcile the last two years before you reissue.
Trading terms fairly
Tenants will accept tighter obligations in exchange for certainty — a longer term, a defined incentive, or a capped contribution to a fitout upgrade. Package the changes together rather than raising them one at a time.
Document the agreed scope for make-good in a schedule with photographs at commencement. That single step removes most end-of-term disputes.
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