Commercial Property Condition Report: What’s Included

Picture the end of a ten-year office lease. The tenant hands back the keys, but the landlord disputes the property’s condition. Without a documented baseline, make good obligations can quickly become expensive disagreements. A commercial property condition report provides that baseline. In this guide, I explain what it includes, how it is used throughout the lease and how a consistent administrative process helps protect both landlords and tenants.

What a Commercial Property Condition Report Is

A commercial property condition report documents the condition of commercial premises at a specific point in time. It typically combines written observations with dated photographs taken before the tenant takes possession. Both parties should review and acknowledge the report so it can serve as a reliable point of comparison at lease end when assessing make good obligations.

Leasing Report vs Building Condition Assessment

The term can also refer to a building condition assessment used for due diligence in a purchase or finance deal. That report may cover:

• Structural elements
• Roofing
• Major building systems

In this guide, I focus on the leasing record your agency may coordinate, store and rely on under the lease.

Residential condition reports follow different rules. This guide focuses on commercial and retail leases in Australia, where the lease and the law in each jurisdiction shape the process.

Western Australia’s Small Business Development Corporation recommends an independent inspection and a photo report accepted by the tenant and landlord. I treat that as strong practice rather than a single national rule.

What’s Included in a Commercial Property Condition Report

A strong report reduces reliance on memory. It records the condition of each area and item within the agreed inspection scope. Clear, dated photos support each note. Across the commercial portfolios my team supports, I use the same core areas each time.

Plant and equipment deserve extra care. The Queensland Small Business Commissioner advises parties to check whether a photo condition report is signed and whether existing structures, fixtures and plant are in working order. Recording those details can reduce uncertainty at handover. 

Entry, Routine and Exit Reports Across the Lease

I use three checkpoints across a commercial lease:

• Entry report: Completed before the tenant takes possession. It records the items and areas within the agreed scope.
• Routine inspections: Completed during the term at intervals allowed by the lease and agreed process. They track changes and help flag maintenance.
• Exit report: Completed at lease end. It records the final state and supports the assessment of make good duties and any bond or security release.

How the Checklist and My Team Support the Process 

The condition report is the formal record. The checklist is the tool used to ensure every inspection captures the same information in the same order. A standardised checklist reduces omissions and creates consistency across multiple properties. Before the inspection, lease documents, previous reports and supporting files should be prepared. After the inspection, notes and photographs should be matched, the report compiled and any missing information flagged for review before the authorised property manager confirms the findings.

Why the Report Matters for Make Good and Disputes

The real value of a condition report often appears at lease end, when make good duties are assessed. A make good clause sets out how the tenant must return the premises. Depending on the lease, this may include:

• Repainting
• Repairing damage
• Removing fit-out
• Leaving fixtures in working order

Business Tasmania describes returning the property to its original condition as a common meaning of make good. The lease wording still controls the tenant’s actual duty.

Without a baseline record, make good discussions can become harder. The Queensland Small Business Commissioner lists limited evidence and vague clauses as common causes of disputes. A dispute may also delay the release of a bond or security deposit.

The property manager should administer the agreed process under the lease, with legal advice obtained where the make good wording or liability is unclear or disputed. The condition report supplies evidence; it does not determine the legal obligation.

How Make Good Duties Differ Across Australia 

Standards differ by state and lease type. In Queensland, the Property Law Act 2023 implies standard terms into leases, subject to other legislation and any contrary agreement. One standard term requires the tenant to return the premises in at least the same repair and condition as at the start of the lease, subject to exceptions including reasonable wear and tear and specified types of damage.

Victorian retail leases also show why the condition report must distinguish landlord assets from tenant fit-out. Under section 52 of the Retail Leases Act 2003, the landlord generally maintains specified structural elements, landlord fixtures, plant, equipment and service-related fittings in the condition they were in when the lease began, subject to exceptions such as tenant misuse. This is a landlord maintenance obligation; the tenant’s make good duties still depend on the lease and applicable law.

Commercial leases can run for years, and renewal options may extend them further. Over time, memories fade and records move. A report accepted at the start keeps both parties anchored to the same evidence.

How to Systemise Condition Reports Across Your Portfolio

Producing one report is straightforward. Producing each report the same way across a commercial portfolio is harder. Entry, routine and exit records can slip down the list when leasing, arrears or maintenance demands attention.

Use one template and one capture sequence for each visit. Set rules for photo angles, file names and date stamps. Add a proofing step so a second person checks the notes against the images.

Convert site notes into a clean digital report. Send the approved copy to both parties and store it with the lease record in your property management software. Keep it throughout the lease and until the handover, make good and bond or security matters are resolved. After that, retain it in line with your agency’s applicable record-retention policy.

Here is how I divide the work:

• Your local authorised property manager or agency: Controls access, inspection findings, approvals and legal notices.
• Specialist contractors and accredited practitioners: Complete testing and certification.
• My team: Handles approved admin under the manager’s direction. My team can schedule visits, prepare approved access communications, compile reports, organise photos and track due dates.

Use My Report Readiness Check

I use five questions before I call a report complete:

1. Has each party signed or otherwise accepted the record?
2. Can each note be matched to a dated photo?
3. Are tenant fit-outs separated from landlord assets?
4. Is the final file stored with the lease?
5. Is the next review date or lease-end action clear?

Each “no” becomes a task for the next file review.

What Consistency Looks Like in Practice

I worked with Phil Jones, principal of Brisbane-based Propel Realty. His agency manages both residential and commercial property. Over 18 months, he moved more than 20 processes and over 300 daily and monthly tasks to a dedicated virtual assistant.

Phil said, “PMVA’s systems, structure and support is beyond anything that I’ve experienced before in a company and so I’ve been thrilled and it certainly has met my expectations.”

I also worked with Sarah, head of property management for a large Canberra agency. She said, “Everyone in the office had their own way of doing things, which led to inconsistencies.” I helped her team standardise processes from application to lease preparation.

She later said, “With PMVA, we have a consistent process, and I have peace of mind knowing where everything is and that important tasks are being handled.” 

These examples show how PMVA standardises repeatable property-management administration. For condition reports, I apply that model to the checklist, photo filing, report compilation and review hand-off, while the local manager retains control of the inspection findings.

Where My Team Fits Into the Process 

Our routine inspection support, commercial maintenance coordination and commercial property management support sit behind the local manager. My team tracks approved records and due dates so the agency can see what is complete and what needs review.

This work draws on PMVA’s Blueprint Library of more than 1,600 documented property management processes. The goal is a consistent process, organised records and clear responsibility at each stage.

A Record Worth Keeping

A commercial property condition report provides an objective record from lease commencement to lease end. When every inspection follows the same documented process, agencies spend less time resolving disputes and more time managing clients. Standardised administrative support helps keep reports organised while authorised property managers retain responsibility for inspections, decisions and client relationships.