Condition Reports vs Make Good Reports – What’s the Difference?
In commercial leasing, the terms Condition Report, Dilapidation Report, and Make Good Report are sometimes used interchangeably.
However, they refer to different stages of the lease process and serve different purposes.
Understanding the difference is important for landlords, tenants, and property managers because each document plays a distinct role in documenting the condition of a property and managing lease obligations.
What Is a Commercial Condition Report?
A Commercial Condition Report documents the condition of a property at the start of a lease.
The report creates an independent baseline record of the property before the tenant takes possession.
It typically includes:
written notes describing the condition of surfaces and fixtures
structured inspection observations
high-resolution photographs
documentation of internal and external areas
This baseline record allows the property’s condition to be compared later when the lease ends.
Condition Reports are sometimes also referred to as:
Tenancy Condition Reports
Lease Commencement Reports
Commercial Dilapidation Reports (in some contexts)
What Is a Make Good Report?
A Make Good Report is typically prepared at the end of a lease.
Its purpose is different from a Condition Report.
Rather than simply documenting condition, a Make Good assessment considers:
the make good obligations contained in the lease
whether alterations or fit-outs must be removed
whether the premises must be reinstated to its original condition
Because make-good obligations depend on the specific wording of the lease agreement, these assessments can involve interpretation of the lease terms.
For this reason, Make Good assessments are often coordinated between:
property managers
landlords
tenants
leasing agents
legal advisors
The Key Difference
The difference between the two reports is primarily timing and purpose.
A Condition Report records facts about the property’s condition, while a Make Good Report considers lease obligations and reinstatement requirements.
Why the Condition Report Is So Important
The Condition Report prepared at lease commencement often becomes the most important reference document when the tenancy ends.
Without a baseline record, it can be difficult to determine:
what damage occurred during the lease
what alterations were made by the tenant
what condition the property was originally in
This is why most commercial property managers recommend completing a detailed Condition Report before the tenant takes possession.
Independent Reports Help Avoid Disputes
Some property managers prepare condition reports internally, particularly for smaller tenancies.
However, many landlords and tenants prefer an independent inspection provider.
An independent report ensures the documentation is objective and unbiased, providing a fair record for both parties.
Because the inspection is carried out by a third party with no involvement in the lease negotiation, the report can help reduce disputes later by providing neutral evidence of the property's condition at lease commencement.
Condition Reports for Properties of All Sizes
Commercial properties vary greatly in size and complexity.
Some inspections involve small office or retail tenancies, while others may include:
warehouses
distribution centres
medical facilities
large industrial buildings
multi-tenancy office assets
Larger properties often include external areas such as car parks, hardstands, loading zones and fence lines, which also need to be documented.
A structured inspection process helps ensure these areas are recorded clearly.
Summary
Although the terms are sometimes confused, Condition Reports and Make Good Reports serve different purposes.
A Condition Report records the condition of a property at the start of the lease, creating a baseline reference for the future.
A Make Good Report is prepared at the end of the lease and considers whether the tenant has met the reinstatement obligations outlined in the lease agreement.
Preparing a detailed Condition Report at lease commencement is one of the most effective ways to reduce disputes and ensure both landlords and tenants have a clear record of the property’s original condition.
About R24
R24 prepares Commercial Condition Reports for properties of all sizes, from small office tenancies through to large commercial and industrial assets across Australia.
Our team completes over 20,000 property inspections annually, delivering structured, photo-supported reports within 1–2 business days to help property managers, landlords and tenants document the condition of their assets with confidence.