A Complete and Accurate Guide for Tenant Fit-Outs (English Version)**

In commercial buildings, shopping centers, and office fit-out projects, restoration (make-good) obligations are one of the most common sources of conflict at the end of a lease.

If misunderstood, restoration can lead to:

• unexpectedly high costs,
• delays in moving out,
• disputes with the landlord,
• additional rent due to extended occupancy,
• disagreement about what must be removed or reinstated.

This article explains what restoration truly means, based on legal principles, commercial lease practices, and the relationship with construction categories (A/B/C Work) and asset ownership.

All information has been fully verified and aligned with widely accepted industry practice.

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① What Is Restoration (Make-Good)?

Restoration does not mean “returning the premises to the exact condition at lease commencement.”

Correctly defined, restoration means:

“The tenant must remove modifications and installations they added, and restore any changes they caused.”

Natural wear and tear or deterioration over time is not the tenant’s responsibility unless specified in the contract.

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② Legal Principle (Important Distinction)

Under the general legal concept:

• The tenant is not responsible for
  natural deterioration, ageing, or normal wear and tear.
• The tenant is responsible for removing additional improvements, alterations, or fixtures installed during their tenancy.

However, commercial leases almost always include contract provisions that change this rule.

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③ Practical Reality in Commercial Leases

In commercial properties—shopping malls, office towers, retail strips—most contracts require:

• “Return to base building condition” (bare shell / cold shell)
• “Tenant bears the cost of make-good”
• Removal of all tenant-installed works
• Restoration of building services impacted by tenant modifications

In practice:

Contract terms override general legal principles.

Therefore、restoration requirements depend heavily on the written lease.

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**④ What must be restored?

(Items typically requiring removal)**

In most tenant fit-outs, the following must be removed by the tenant:

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■ Items Typically Subject to Restoration (Removal Required)

C Work items (Tenant Assets → removal required)

• Flooring, wall, and ceiling finishes
• Non–fire-rated partitions
• Built-in furniture and millwork
• Lighting fixtures and branch wiring (after tenant panelboard)
• Counters, shelving, display fixtures
• Kitchen equipment
• Signage (if specified in contract)

Tenant-added or relocated building systems

• Sprinkler head relocation
• Fire alarm device relocation
• Additional plumbing lines or drainage branches
• Modifications affecting HVAC or smoke control
• Any penetration or cutting into base building slabs/walls

In short:
Everything the tenant added or moved is usually removed and restored.

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**⑤ What is NOT subject to restoration?

(Items usually left in place)**

A Work / B Work items = Landlord Assets

These generally must remain in place:

• Landlord HVAC equipment and primary ducts
• Sprinkler system main piping
• Building fire alarm system devices
• Electrical riser, main panelboards
• Plumbing stacks, main lines
• Structural or fire-rated demising walls

However:
If the tenant relocated or altered any of these systems, the tenant must restore them to the landlord’s standard condition.

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⑥ Types of Restoration Conditions

Two major restoration conditions exist in practice.

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1. Full Restoration / Bare Shell (Most common)

This is the typical requirement in commercial leases.

• Floor: bare concrete
• Ceiling: slab exposed or base grid restored
• Walls: remove non–fire-rated partitions
• MEP: remove tenant-installed systems and restore connections to base building
• Remove all signage

This is the standard in shopping centers, office towers, and large commercial buildings.

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2. “As-is” Handover / Transfer of Fit-Out (Possible but rare)

• Tenant may leave interior fit-out
• New tenant may reuse it
• Restoration cost may be reduced or eliminated
• Requires landlord approval

This approach is only possible when the landlord and incoming tenant explicitly agree.

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⑦ When Restoration Costs Become High (Common Risk Cases)

Certain fit-outs are notoriously expensive to restore.

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① Restaurants / F&B tenants

• Grease trap
• Extensive plumbing
• Hood exhaust and supply air
• Fire-rated ductwork
• Kitchen floors and waterproofing

All require costly removal and reinstatement.

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② Heavy modifications to HVAC or fire protection

• Large numbers of sprinkler relocations
• Fire alarm changes
• Duct rerouting
• New mechanical equipment

→ These are almost always expensive.

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③ Heavy equipment (safes, kitchen equipment, large displays)

May damage the slab or require patching.

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④ Ambiguous contract wording

When “return to original condition” is undefined, disputes occur.

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⑧ How to Avoid Restoration Disputes

1. Review restoration obligations before signing the lease.
2. Understand A/B/C Work and asset ownership.
3. Document existing conditions with photos or video at move-in.
4. Clarify what must be removed and what may remain.
5. Confirm restoration standards with the landlord during design stage.
6. Keep a record of all modifications and equipment added.

These steps prevent unexpected costs at the end of the lease.

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■ Summary

• Restoration = removing tenant-added work and repairing impacts
• Natural wear and tear is not the tenant’s responsibility (unless specified)
• Commercial leases often require full make-good to base building
• C Work (tenant assets) must be removed
• A/B Work (landlord assets) must stay
• Costs become high with kitchens, HVAC/fire changes, and plumbing
• Clear contract terms and documentation are essential to avoid disputes

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■ Disclaimer

This article provides general information. Actual restoration requirements vary by lease agreement, landlord rules, building systems, and local regulations. Always confirm details with the landlord and qualified professionals.