Cash Settlement vs Make Good: When You Can Pay Instead of Doing the Work
Some tenants would rather pay the landlord a settlement than carry out make good works. Here is when that is actually possible.
A cash settlement means paying the landlord an agreed amount instead of physically carrying out make good works. It sounds simpler than organising a strip out, but tenants cannot unilaterally choose this option: it only works if the lease expressly allows it, or if the landlord agrees to it separately at lease end.
When a cash settlement is possible
- Your lease explicitly gives the tenant the option to pay in lieu of physical works.
- The landlord agrees to a settlement close to lease end, often because they plan to redevelop, re-lease as a shell, or retain part of your fit-out rather than have it stripped out.
- A dispute is resolved through mediation or a tribunal, where damages may be assessed by reference to the cost of reinstatement rather than requiring the physical work itself.
Why landlords sometimes prefer cash
A landlord who is about to gut the whole floor for a new tenant, or redevelop the building, has little use for a freshly reinstated Cat A shell. In those cases a cash settlement calculated against the likely cost of the works can suit both sides better than a strip out that gets demolished again within months.
How to propose one
Get an independent quote for what the physical make good would actually cost first. That figure is your starting point for a settlement negotiation, and it is far stronger than an arbitrary number either side pulls out of the air.
Negotiating a make good clause ยท Request a quote to use as your baseline
Frequently asked questions
Can I just pay my landlord instead of doing the make good work?
Only if your lease expressly allows it, or your landlord agrees to it separately. You cannot unilaterally substitute cash for physical works unless the lease says you can.
How is a cash settlement amount calculated?
Typically by reference to the cost of the reinstatement works that would otherwise be required, often supported by an independent quote or quantity surveyor valuation.
Ready to get started?
Tell us about your make good, defit or strip out and we will pass your details to a provider covering your area.
Sources: Prosper Law, Make Good Obligations in Commercial Leases Explained , Stonegate Legal, Make Good Obligations in Commercial Leases