Why consider an office sharing agreement?
Rental and operating costs for an office space are usually the most significant expense for any business alongside staff overhead. An office sharing agreement legally permits the ‘Operator/Licencor’ to bring in another business to help contribute to running costs and is an effective short term solution.
Is an office sharing agreement a type of office lease?
In a word, no. An office sharing agreement is a contractual licence. The key difference between a licence and an office lease is that a licence does not grant the Customer/Licencee any rights over a specified or fixed area. An office sharing agreement will specify a set number of desks or workstations but will not specify their location – its about availability.
Who are the parties to an office sharing agreement?
The Operator/Licencor is the party granting the right to share office space. The Customer/Licencee is the individual or company sharing the office space. If there is more than one party, each must be named to ensure that they remain joint and severally liable under the terms of the agreement. There can be a maximum of four parties to an agreement.
If you lease and do not own the subject property?
If you lease the subject property and are not an owner you must carefully check for any clauses that might prevent or restrict office sharing with another business or entity. This will be set out in the terms of your lease. If consent from a landlord is required, this must be obtained before finalising any agreement.
What is the licence fee?
Desks or private offices in serviced office space are not subject to standard office lease terms. Instead, an agreement between a tenant and a company is established in the form of a ‘Licence Agreement’ and subject to a ‘Licence Fee’. The Customer/Licencee must also pay any VAT due on the Licence Fee. The Licence Fee can be a weekly or monthly figure but a monthly payment is most common.
Will the licence fee be all-inclusive of other costs?
Dependent on your arrangement with the ‘Operator/Licencor’, the licence fee can be inclusive of additional costs of services, such as internet, meeting room space and photocopying etc, or these costs might be billed separately.