Restoration (Make-Good) Work in Commercial Leases in Japan

A Complete and Practical Guide for Tenant Fit-Out Projects

In Japan, restoration (also called “make-good”) obligations are one of the most common sources of conflict when tenants vacate commercial spaces.
These obligations are governed not only by general legal principles, but also—more importantly—by commercial lease contracts, building rules, and construction category practices (A/B/C Work).

In commercial buildings, shopping centers, and office fit-out projects in Japan,
misunderstanding restoration requirements often leads to:

Unexpectedly high restoration costs
Delays in vacating the premises
Disputes with the landlord
Additional rent due to extended occupancy
Disagreement over what must be removed or reinstated

This article explains what restoration truly means in Japanese commercial leases, based on:

Legal principles
Actual lease practice
Construction categories (A / B / C Work)
Asset ownership concepts

All explanations are aligned with widely accepted tenant fit-out practice in Japan.

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 the modifications, installations, and alterations they added,
and restore any impacts caused by those works.

Natural wear and tear or ageing over time is not the tenant’s responsibility
unless explicitly stated in the lease contract.

2｜Legal Principle (Important Distinction)

Under general legal principles applied in Japan:

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

However, this principle is often overridden in practice.

3｜Practical Reality in Japanese Commercial Leases

In Japanese commercial properties—such as shopping malls, office towers, and street-level retail—most lease contracts require:

“Return to base building condition” (bare shell / skeleton condition)
Restoration at the tenant’s expense
Removal of all tenant-installed works
Reinstatement of building services affected by tenant modifications

In practice:

Lease contract terms take priority over general legal principles.

As a result, restoration obligations depend heavily on what is written in the lease.

4｜What Must Be Restored?

(Items Typically Requiring Removal)

In most tenant fit-out projects in Japan, the following items are subject to restoration.

■ Items Typically Requiring Removal (Tenant Responsibility)

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 panelboards)
Counters, shelving, and display fixtures
Kitchen equipment
Signage (if specified in the lease)

Tenant-modified building systems

Relocated sprinkler heads
Relocated fire alarm devices
Additional plumbing lines or drainage branches
HVAC modifications or duct rerouting
Any penetration or cutting into slabs or walls

In short:
Everything the tenant added, moved, or altered is usually subject to removal and restoration.

5｜What Is NOT Subject to Restoration?

(Items Usually Left in Place)

A Work / B Work items = Landlord Assets

These typically remain in place and must not be removed:

Base-building HVAC equipment and main ducts
Sprinkler system main piping
Building fire alarm system infrastructure
Electrical risers and main panelboards
Plumbing stacks and main lines
Structural or fire-rated demising walls

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

6｜Types of Restoration Conditions in Practice

① Full Restoration / Bare Shell (Most Common in Japan)

This is the standard requirement in most commercial leases.

Floor: bare concrete
Ceiling: slab exposed or base grid restored
Walls: non–fire-rated partitions removed
MEP: tenant-installed systems removed and base-building connections restored
All signage removed

This is typical for shopping centers, office buildings, and large commercial facilities.

② “As-Is” Handover / Transfer of Fit-Out (Limited Cases)

Interior fit-out may remain
New tenant may reuse it
Restoration costs may be reduced or eliminated

However, this is only possible with explicit landlord approval
and agreement from the next tenant.

7｜When Restoration Costs Become High

(Common Risk Scenarios)

Certain tenant types and fit-outs are particularly expensive to restore.

● Restaurants / F&B Tenants

Grease traps
Extensive plumbing
Exhaust and supply air systems
Fire-rated ductwork
Waterproofed kitchen floors

Restoration costs are often very high.

● Extensive HVAC or Fire Protection Modifications

Multiple sprinkler relocations
Fire alarm system changes
Duct rerouting

These almost always result in large restoration costs.

● Heavy Equipment

Safes, large kitchen equipment, heavy fixtures
Often require slab repair or reinforcement patching

● Ambiguous Lease Wording

Undefined terms such as “return to original condition”
Common source of disputes

8｜How to Avoid Restoration Disputes

Review restoration clauses before signing the lease
Understand A/B/C Work and asset ownership
Record existing conditions with photos or video at move-in
Clarify what must be removed and what may remain
Confirm restoration standards with the landlord during the design stage
Keep records of all modifications and equipment added

These steps significantly reduce end-of-lease conflicts.

Summary

Restoration means removing tenant-added work and repairing its impact
Normal wear and tear is not the tenant’s responsibility (unless specified)
Japanese commercial leases often require full make-good to base building condition
C Work (tenant assets) must be removed
A/B Work (landlord assets) must remain
Kitchens, HVAC, fire protection, and plumbing drive costs up
Clear contracts and documentation are essential

Disclaimer

This article provides general guidance based on Japanese commercial lease practice.
Actual restoration requirements vary depending on lease terms, building rules, fit-out history, and local authority practices.

Always confirm details with the landlord and qualified professionals.