Who pays to restore the premises when a commercial lease ends?

Restoration, or make-good, clauses are among the least visible liabilities in a commercial lease, mainly because they only come due years later, at the end of the term, long after the assignment that made them the buyer’s problem was signed.

What “restore” actually requires

The obligation ranges from removing signage and furniture up to full demolition of a built-in kitchen, interior walls, flooring, and mechanical systems back to a bare shell, depending on the exact wording used. “Base building condition” and “as delivered condition” are not the same standard, and the gap between them can be a real cost — worth reading precisely rather than assuming a plain-English meaning.

The obligation transfers with the lease, not with who built it

A buyer assigned a lease generally steps into every obligation the seller had, including one accumulated over years the buyer had nothing to do with. A seller who installed an expensive fit-out a decade ago has, in effect, handed the eventual removal cost to whoever holds the lease when it finally ends — which may well be the buyer.

The security deposit is the landlord’s insurance against this

This is part of why landlords hold a deposit, and often want it increased on assignment: it exists specifically to cover restoration costs if the tenant does not do the work, or does it poorly. A buyer negotiating the size of a deposit should understand what it is actually securing, not treat it as a generic cost of consent.

Negotiate it before you sign, not when the lease ends

A buyer can sometimes negotiate a cap on restoration scope, a waiver for improvements the landlord is happy to keep, or an estimated cost factored into how the deal is priced. This is far easier to raise while the assignment itself is being negotiated than years later, once the lease is actually expiring and the landlord holds all the leverage.