A Costly Error

Selecting the right solicitor when you purchase or lease your industrial property investment is crucial. A solicitor who is experienced in industrial real estate conveyancing will help ensure the successful outcome for your investment and ultimately help you avoid making costly errors.

A pharmaceutical company wished to lease a building in a popular part of Western Sydney. The lessor’s (owner’s) agent had worked with the lessee (tenant), and both parties had agreed to essential lease terms and agreed on the amount of security bond to be paid. The tenant’s solicitor was not experienced in industrial real estate leases. He decided to advise his client that the deal was not good. He rewrote the agreement, reducing the security bond from six months to three, removing the ‘make good’ clause, plus inserting and removing a host of other terms and conditions, effectively leaving the document open to interpretation in the event of a dispute. Of course the owner refused to accept the altered Heads of Agreement.

In the meantime, other interested parties inspected the property, and a new tenant put forward an even better lease offer, one that the owner accepted. The pharmaceutical company was left not only looking for another building to lease, but also with an expensive solicitor’s bill to pay for the redrafting of a lease that ultimately was not used.


A solicitor familiar with industrial real estate can help in more ways than just documenting sales and purchase agreements, and drafting tenant leases. They are a valuable source of legal advice, or referral advice, by ensuring, amongst other things, that you have an up-to-date will, are obtaining accurate accounting and tax advice for your investment property, and have structured the new investment correctly, perhaps through your super fund.

If your solicitor feels the investment is not a wise one, or not in line with an overall investment strategy suitable for your needs, they can also advise whom you should see before committing. Most importantly, your solicitor should help you understand the consequences of any legal document you sign. Once you sign a document, you are locked in. There are consequences, and you can’t just tear that agreement up. If a problem should arise with the tenant, the solicitor can assure you whether or not that is just part of business, and can advise solutions for dealing with issues that may arise. A good solicitor will encourage the parties to negotiate to resolve any issues, so no one ends up in court unnecessarily spending money.

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About the Author

Lillie Cawthorn has been investing in industrial real estate (small factories and warehouses) in Sydney for the past 15 years and also has real estate investment interests in France and the United States. She initially invested in residential real estate across four countries, where she built and renovated homes for lease. Lillie is the best selling author of The Money Factory – How Any Woman Can Make An Extra $30,000 To $100,000 Passive Income.

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