The Commercial Tenancy Make-Good Surprise: Magnesite Found Under Old Carpet Tiles

Magnesite is a magnesium oxychloride cement topping compound commonly found beneath carpet tiles in older Australian commercial buildings. During a commercial tenancy make-good , discovering magnesite under old flooring significantly extends the strip-out timeline, increases floor preparation scope, introduces WHS compliance obligations , and can substantially change the cost and handover schedule for both tenants and property owners in New South Wales .

Most commercial make-good projects follow a predictable arc. The tenant vacates. Strip-out crews arrive. Carpet tiles lift, adhesive scrapes back, and the concrete slab beneath is exposed for inspection and reinstatement. The schedule moves forward, the handover date holds, and the final account falls within the range everyone expected.

Then someone pulls up a carpet tile and finds a pale, chalky layer sitting between the adhesive and the concrete.

In older offices, clinics, and retail tenancies across Sydney, this discovery is far more common than many tenants, facility managers, and even some contractors anticipate. The material is magnesite, and its presence transforms what was supposed to be a straightforward strip-out into a multi-stage remediation project with implications for cost, compliance, and lease obligations.

For property professionals operating in the Sydney commercial market, understanding magnesite, its origins, its risks, and the correct approach to managing it during a make-good is fundamental to managing project exposure and protecting both parties in a lease transition.

What Is Magnesite Flooring? Magnesite, formally known as magnesium oxychloride cement , is a topping compound that was widely applied across Australian commercial and residential buildings from the 1950s through to the early 1980s. It was used as a thin levelling layer, typically between 5 mm and 20 mm thick, poured directly over a concrete substrate. The material was valued for its smooth, hard finish and relatively fast setting time, making it an efficient base for carpet tiles, vinyl sheet, and other finished floor coverings.

At the time of its widespread use, magnesite solved a practical problem. Post-war commercial construction across Sydney, particularly in the CBD, North Sydney, and the Inner West, often produced concrete slabs with inconsistent surface levels. Magnesite provided a cost-effective way to create a flat, serviceable surface for flooring installation.

The compound is made from a mixture of:

Magnesium oxide (MgO). Magnesium chloride solution (MgCl₂). Fillers, which commonly included sawdust, sand, or asbestos fibres in earlier formulations. It is the chloride component that creates the long-term problem. When magnesite is exposed to moisture, whether from below the slab, building services, or environmental humidity, chlorides can migrate into the underlying concrete. Over time, this process can contribute to carbonation and chloride-induced corrosion of steel reinforcement within the concrete slab. The result may be a substrate that is compromised even though the surface appeared sound beneath the flooring that concealed it.

The Australian Institute of Building has noted that magnesite-related damage is one of the hidden defects encountered in pre-1990 commercial buildings across major Australian cities. In Sydney, where a significant proportion of commercial building stock dates from the magnesite era, the issue requires careful consideration during refurbishment and make-good works.

How Does This Impact Sydney Property Owners or Businesses During a Make-Good? Finding magnesite during a commercial tenancy strip-out in Sydney does not simply add a line item to the scope of works. It restructures the entire make-good programme, from initial assessment through to final handover.

The impact falls across several operational areas.

Timeline Disruption A standard commercial make-good for a mid-sized tenancy in Sydney typically runs between two and four weeks, depending on the fit-out complexity and flooring area. The discovery of magnesite can add time to this schedule, allowing for substrate assessment, hazardous material testing where required, removal, disposal, and concrete repair before any new flooring installation.

For tenants, this can mean additional rent, holding costs, or delayed access to new premises. For landlords, it can extend the vacancy window and defer leasing income.

Cost Escalation Magnesite removal introduces costs that may not have been visible at the start of the project:

Specialist removal labour with dust suppression equipment. Hazardous material testing, particularly where the building predates 1990. Appropriate waste disposal for removed magnesite material. Concrete substrate inspection and repair, which may involve grinding, patching, or partial re-levelling. Moisture testing of the concrete slab to determine ongoing risk. Potential engineering assessment where reinforcement corrosion is suspected. Lease Obligation Complexity Most commercial leases in New South Wales include a make-good clause requiring the tenant to return the premises to its original condition, or to a condition consistent with the lease terms. When magnesite is discovered, a question arises: was the magnesite part of the original building condition, or was it added by a previous tenant as part of their fit-out?

If the magnesite was part of the base building, the cost of its removal may fall to the landlord under the relevant base-building obligations. If it was installed during a prior tenancy, the position may be less clear and require negotiation or legal review. This is where professional guidance and documented assessment become essential.

Downstream Flooring Implications Even after magnesite is removed, the concrete substrate beneath it may not be ready for immediate flooring installation. Chloride contamination or residual materials can leave the slab surface in a condition that requires concrete grinding , moisture barrier application, or re-levelling before new carpet, vinyl, or hard flooring can be laid. Each of these steps extends the programme and adds cost.

“Magnesite does not announce itself. It waits beneath decades-old carpet tiles for a strip-out crew to discover it, and by that point, every timeline and budget in the project has already been set.” Why Is This Important for NSW Projects or Compliance? Magnesite removal in a commercial setting is not simply a flooring task. It engages multiple compliance frameworks that apply across New South Wales, and failing to address them correctly can expose both tenants and property owners to regulatory and financial liability.

Work Health and Safety Under the Work Health and Safety Act 2011 (NSW) and regulations administered by SafeWork NSW , a person conducting a business or undertaking has a duty to manage risks associated with the work environment. Magnesite removal generates fine particulate dust that, depending on the original floor system and associated materials, may involve:

Crystalline silica particles. Asbestos fibres in certain legacy materials or adjacent layers. Other hazardous dusts requiring appropriate controls and respiratory protection. Dust suppression methods, personal protective equipment, and suitable work procedures should be implemented during removal. Contractors carrying out this work must follow relevant safe work method statements and licensing requirements where applicable.

Asbestos Management In buildings constructed or significantly renovated before 1990, there is a risk that magnesite contains asbestos fibres, or that asbestos-containing materials sit beneath or adjacent to the magnesite layer. Under the Work Health and Safety Regulation 2017 (NSW) , work involving asbestos must be managed in accordance with applicable requirements, including licensed removal obligations where relevant.

The NSW Environment Protection Authority also regulates the transport and disposal of asbestos waste through licensed facilities. Failure to comply can result in significant penalties for both contractors and the parties engaging them.

Building Code and Structural Integrity Where magnesite-related chloride attack has caused corrosion of steel reinforcement within a concrete slab, the structural capacity of the floor may be affected. In multi-storey commercial buildings across Sydney, this may trigger engineering assessment under the National Construction Code and relevant Australian Standards, including AS 3600 for concrete structures.

Property owners have an obligation to ensure the building remains structurally sound. Ignoring magnesite damage does not resolve it. It can allow deterioration to continue, particularly once flooring is removed and moisture conditions change.

Disposal and Environmental Compliance Removed magnesite material is classified as construction and demolition waste. Where it contains asbestos, it must be handled and disposed of in accordance with applicable NSW EPA requirements. Even non-asbestos magnesite must be transported and disposed of through appropriate waste-management pathways. Disposal documentation should be retained as part of the make-good record.

What Does This Typically Cost or Affect in Sydney? Cost varies significantly depending on the extent of magnesite coverage, the condition of the underlying concrete, the age of the building, and whether hazardous materials are present. The following indicative ranges apply to common make-good scenarios involving magnesite in Sydney commercial tenancies.

Magnesite Removal — Non-Asbestos Indicative cost range: $35 to $65 per square metre. Notes: Includes dust suppression and basic disposal. Magnesite Removal — Asbestos-Containing Material Indicative cost range: $70 to $140 per square metre. Notes: Requires applicable licensed removal, air monitoring, and licensed disposal. Concrete Substrate Grinding Indicative cost range: $15 to $30 per square metre. Notes: May be required to remove contaminated or unsuitable surface material. Concrete Repair and Patching Indicative cost range: $25 to $60 per square metre. Notes: Depends on the extent of concrete damage, cracking, spalling, or reinforcement corrosion. Moisture Barrier Application Indicative cost range: $8 to $18 per square metre. Notes: May be required where ongoing moisture ingress is identified. Re-Levelling with New Screed Indicative cost range: $20 to $40 per square metre. Notes: Required where substrate levels are outside the tolerance of the selected flooring system. Asbestos Testing and Assessment Indicative cost range: $300 to $800 per survey. Notes: Laboratory analysis should be undertaken through an appropriately accredited testing pathway. Engineering Structural Assessment Indicative cost range: $2,000 to $8,000 per engagement. Notes: May be required where reinforcement corrosion or structural slab deterioration is suspected. For a typical 500 square metre commercial tenancy in Sydney, the discovery of magnesite can add between $25,000 and $80,000 to the total make-good cost, depending on the factors above. Where asbestos is present and structural repair is required, costs can exceed this range substantially.

Key Cost Drivers to Assess Early Building age: Pre-1990 buildings carry a higher likelihood of legacy hazardous materials requiring assessment. Extent of coverage: Partial room coverage versus full-tenancy coverage materially changes removal economics. Concrete condition: Surface grinding may be routine; reinforcement repair is considerably more expensive. Moisture presence: Active moisture ingress compounds other cost factors. Access and logistics: Upper-floor tenancies in occupied buildings add staging, protection, and programme requirements. What Are the Risks or Benefits of Proper Magnesite Management? The risks of ignoring or mishandling magnesite during a commercial make-good are substantial for Sydney property owners, tenants, and project managers.

Risks of Inadequate Management Regulatory penalties: SafeWork NSW can issue notices and penalties where dust control and hazardous material management are inadequate during removal works. Compliance obligations should be identified and managed before disturbance proceeds.

Lease disputes: Undocumented magnesite discoveries that are not communicated to the landlord or managing agent can lead to make-good disputes, withheld bonds, and litigation. Concealed damage progression: If magnesite is left in place and new flooring is installed over it, ongoing deterioration may continue beneath the finished surface. The next tenant or building owner may inherit a larger and more expensive problem. Insurance exposure: Work carried out without proper testing, licensing, or disposal documentation may create issues under contractor or landlord insurance policies. Reputational risk: For commercial agents and property managers, poorly handled substrate issues can erode trust with both landlords and tenants. Benefits of a Structured Approach Documented compliance: Appropriate testing, removal, and disposal records help protect parties from future liability. Accurate cost forecasting: Early identification and assessment reduce the risk of cost surprises late in the make-good programme. Substrate integrity: Properly addressing magnesite supports restoration of the concrete slab to a condition suitable for new flooring installation, with appropriate moisture management. Lease clarity: A documented assessment of whether magnesite is part of the base building or tenancy-originated supports cleaner lease settlement. Building value protection: For property owners, properly resolving magnesite-related damage supports the long-term value and integrity of the asset. What Should You Do If Magnesite Is Found During a Strip-Out? The correct response follows a structured sequence. Rushing ahead, or covering the material and flooring over it, creates downstream risk for every party involved.

Halt further removal work in the affected area. Do not continue scraping or grinding until the material has been assessed. Disturbing unidentified layers without understanding their composition can release hazardous dust and compromise testing accuracy. Engage a qualified contractor to inspect the substrate. The inspection should determine the extent of the magnesite layer, its condition, the presence of moisture, and whether the underlying concrete shows signs of chloride damage or reinforcement corrosion. Commission hazardous material testing where required. If the building was constructed or significantly modified before 1990, appropriate testing should be completed before further disturbance. Samples should be analysed through an appropriately accredited laboratory. Update the make-good schedule and cost plan. With assessment and testing results available, revise the scope to include magnesite removal, substrate preparation, disposal, and any concrete repair. Provide the revised programme and budget to relevant stakeholders. Notify the landlord or managing agent. Document the discovery with photographs, test results, and the updated scope. If magnesite is determined to be part of the base building, discuss cost responsibility in the context of the lease terms. Execute compliant removal and reinstatement. Carry out removal with appropriate dust suppression, personal protective equipment, and compliant disposal pathways. Prepare the concrete substrate through grinding, levelling, and moisture treatment where required. Install new flooring to specification. Retain all records. Disposal certificates, test results, photographs, contractor licences, and the final make-good report should be compiled and provided to relevant parties as part of the lease close-out documentation. How Elyment Property Services Approaches Magnesite Projects in Sydney Elyment Property Services operates as a technology-enabled property operations company across Sydney and greater New South Wales. The company’s renovation and flooring division manages the full lifecycle of commercial make-good projects, from initial strip-out through substrate assessment, floor preparation , removal, disposal, and reinstatement.

When a magnesite discovery occurs on an Elyment-managed project, the team follows a documented assessment protocol that includes:

Immediate site documentation with dated photography and condition reports. Coordination of hazardous material sampling and laboratory analysis. Substrate condition assessment, including moisture testing and concrete integrity evaluation. Revised scope of works with transparent, itemised costings. Appropriate removal methods using dust suppression aligned with SafeWork NSW requirements. Concrete grinding and levelling to restore the slab to flooring-ready specification. Compliant disposal through suitable waste facilities with supporting documentation. Final flooring supply and installation to the agreed specification. This integrated approach means that the client deals with a single contractor from discovery through to completion, rather than coordinating between separate flooring, removal, grinding, and disposal subcontractors. It reduces the communication gaps that commonly cause delays and cost overruns on multi-trade make-good projects.

Elyment’s operational model is built on the principle that physical execution, compliance management, and documented governance must work together. In a magnesite scenario, this means that every step, from the first carpet tile lifted to the final flooring installation, is recorded, compliant, and accountable.

Why Choose Elyment Property Services in NSW? Elyment Property Services is not a single-trade flooring contractor. The company operates across three integrated pillars: physical operations , professional services , and technology and digital systems . This structure means that a magnesite make-good project is managed within a framework that accounts for operational execution, compliance documentation, and stakeholder communication as a single, coordinated programme.

Full-service capability: Strip-out, removal, concrete grinding, levelling, flooring supply, and installation managed under one scope of works. Compliance-first approach: SafeWork NSW requirements, suitable disposal pathways, and hazardous material protocols embedded into each project workflow. Documented governance: Photography, test results, disposal certificates, and progress reports compiled as standard. Transparent cost management: Itemised scope revisions with clear documentation of what changed and why. Operational warehouse and logistics: Elyment maintains its own warehouse, showroom, and offices in Sydney, with flooring materials held in stock for project mobilisation. Sydney-wide delivery: Projects managed across the CBD, North Sydney, Inner West, Eastern Suburbs, and greater metropolitan area. For property owners, facility managers, and commercial tenants facing a magnesite discovery during a make-good, the difference between a managed process and an unmanaged one is measured in delays, additional costs, and the quality of compliance documentation available at handover.

Elyment’s renovation and flooring team has managed projects across commercial tenancy categories in Sydney, from single-room clinics to multi-floor office fit-outs. The company’s approach to magnesite is the same as its approach to every complex substrate challenge: assess thoroughly, remove correctly, prepare properly, and document everything.

Managing a Make-Good With Hidden Substrate Issues? Speak with the Elyment team about commercial strip-out, magnesite removal, concrete preparation, and flooring reinstatement across Sydney.

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Sources and References SafeWork NSW — Managing risks with hazardous chemicals in the workplace. Work Health and Safety Act 2011 (NSW) NSW Environment Protection Authority — Waste classification and disposal guidelines. Australian Building Codes Board — National Construction Code of Australia. Standards Australia — AS 3600-2018 Concrete Structures. NSW Fair Trading — Commercial lease obligations and make-good provisions. Australian Institute of Building (2019). Hidden Defects in Commercial Building Stock: Magnesite and Chloride Damage in Pre-1990 Construction.