Note: This guide covers coworking service agreements whose specifics may vary from country to country and are subject to different laws. We advise that when you’re drawing up a coworking agreement, you consult a trusted lawyer who has a firm understanding of your business.
Opening a brand-new coworking space is an exciting journey. From forming a suitable brand name and identity to fitting out your workspace with trendy furniture and even building your coworking community – launching your workspace brings your ideas to life.
However, there’s no way around the red tape of running a coworking business. To protect your rights while providing an excellent community experience, there will be necessary paperwork to put in place covering your licenses, brand registration, employee administration, insurance, and tax. Perhaps crucially, a coworking service agreement must be established between you and your coworking members.
In this step-by-step guide, we provide some oversight into creating an effective coworking agreement, which covers:
- The Benefits of Having a Coworking Agreement
- Legal Considerations for Drafting Coworking Agreements
- Top 5 Must-Have Clauses for Your Coworking Service Agreement
- Best Practices for Enforcing Coworking Service Agreements
- Coworking Contract Template
The Benefits of Having a Coworking Agreement
Coworking isn’t just about providing space. With a superfast internet connection, amenities, and facilities, a like-minded community and network of professionals, access to workshops and conferences, and discounted rates on local suppliers – coworking spaces provide so much more.
In fact, its flexible and short-term nature differentiates coworking from traditional offices and is one of the key attractors for individuals and businesses joining coworking spaces. But, given the various coworking services provided, the relationship between yourself (as the space owner) and your coworking members must be legally defined and understood to avoid complications.
A coworking contract is a written agreement, either on paper or electronically, between yourself and your coworking member when they join your workspace. It details the coworking space terms and conditions, including membership type, dates of commencement and period of cover, cost of services (including any discounts and perks), your and your member’s rights and responsibilities, and any intellectual property laws you’d like to highlight.
Signing a coworking agreement is a sign of your transparency with your community about their memberships, and it should mitigate the risk of conflicts for the duration of their membership.
Legal Considerations for Drafting Coworking Agreements
Once signed by both parties, a coworking service agreement is legally binding. When drawing up a legal agreement for coworking, there are two types to consider: a coworking service agreement and a sublease agreement.
A service agreement is the commercial equivalent of hotel accommodation agreements, it’s similar to a gym or fitness studio membership agreement. By selling memberships, you entitle your coworkers to use the space and the resources therein, but the space is not leased at any time to them and remains solely yours.
A sublease agreement is most suitable for shared offices when freelancer groups or companies rent office space together. You can’t make any money from space rental because this contract comes with additional obligations and real property interests. For instance, you can’t make any changes without your members’ approval, as they hold control over the space they lease. In most countries, it’s also difficult to cancel lease agreements.
We advise that you operate under a service agreement— as it’s less complicated and protects you, the space manager, more than the sublease model.
Top 5 Must-Have Clauses for Your Coworking Service Agreement
Drafting up a coworking service agreement can feel like a mammoth undertaking. To provide some clarity around what to include, we recommend the following five clauses covering your coworking space terms and conditions:
- Use of services. Coworking businesses typically offer multiple membership tiers with different facilities and spaces. Establishing the use of services ensures both parties know what they’re signing up for and details your coworking space policies. This includes stating the start and end dates of use (e.g., some operators have a minimum 3-month starter period), which areas the member can use, and at which times (e.g., on a hot desk membership, coworkers can only access the main workspace and kitchen facilities between 9-6 pm).
- Rules and codes of conduct. Building a community of like-minded people requires facilitating safe and inclusive environments. Detailing your rules and codes of conduct determines expectations around how your members will behave in your space, and communicate with one another in-person and online via your communication channels.
- Termination and renewal terms. The flexible nature of coworking is a huge attractor, but perimeters must be stated. This includes conditions for terminating a coworking contract (e.g., a one-month notice period) and renewal terms (e.g., having automated rolling contracts month-by-month). Making both parties aware of these terms reduces friction and protects your bottom line.
- Invoicing and payment terms. When you’re running a coworking business, protecting cash flow is a priority. The coworking service agreement establishes the amount due each billing period, including additional charges, taxes, and VAT. Enabling automated invoices and billing processes within your coworking management software maintains a regular revenue stream through coworking memberships.
- Confidentiality. A coworking space owner takes care of members’ best interests. Requesting that your members declare that they won’t share any sensitive information they’ve overheard in the office protects their businesses and puts their minds at ease. They’ll also feel more comfortable having sensitive conversations in your space.
Best Practices for Enforcing Coworking Service Agreements
The terms of your coworking contract must be accepted before any new members come to your workspace, ensuring that they not only agree to pay for your services but new members also endeavor to behave appropriately and respect your community. Failure to accept the terms of this agreement might be a costly mistake for you in the long term.
To enforce your coworking agreements, send a request using your workspace management software that supports electronic documents. This way, a contract doesn’t get left unchecked and its progress is tracked, making the entire process far easier for you and your new member (who can even accept these terms while on the go).
If a coworking member does turn up to start working in your space without accepting your service agreement, ask them to do so before they get to work. Your community manager can request their signature, and immediately share a completed copy with both parties.
Coworking Contract Template
Ultimately, establishing a coworking agreement with your members protects your interests while contributing to a happy and healthy coworking community.
To help you draft your coworking service agreement, we’ve put together a standard template for you to download below.
Personalize the terms and conditions with your information by adding your coworking business name and editing the terms as you see fit.
Use the “find and replace” function to remove the sample data and enter your information: for example, find [Coworking Space] and replace all the entries with your space’s name.
Note that we recommend you seek legal advice before implementing this template.
The services [Coworking Space] provides you with are subject to the following Terms and Conditions (T&C). [Coworking Space] reserves the right to update the T&C at any time without notifying you. [Coworking Space] membership application does not create a tenancy but a prepaid usage license to use the provided amenities on a monthly or casual basis.
Description Of Services
[Coworking Space] may provide you with access to office space, workstations, Internet access, office equipment, conference space, knowledge resources, and other services (collectively, “Services”). The Services are subject to the T&C at all times.
No Unlawful Or Prohibited Use
You will not use the Services for any unlawful or prohibited purposes by these terms, conditions and notices. You may not use the Services in any manner that could damage, disable, overburden, or impair any [Coworking Space]’s server, or interfere with any other party’s use and enjoyment of any Services.
You may not attempt to gain unauthorized access to any Services, or accounts, computer systems or networks connected to any [Coworking Space] server or to any of the Services, through hacking, password mining or any other means. You may not obtain or attempt to obtain any materials or information through any means not intentionally made available through the Services, nor should you post or download files that you know or should know are illegal or that you have no rights to.
You hereby represent and warrant that you have all requisite legal power and authority to enter into and abide by the terms and conditions of this T&C without any further authorization or approval. You further represent and warrant that your participation or use of the Services will not conflict with or result in any breach of any license, contract, agreement or other instrument or obligation to which you are a party.
Use Of Services
You agree that when participating in or using the Services, you will not:
- Use the Services in connection with contests, pyramid schemes, chain letters, junk email, spamming, or any duplicative or unsolicited messages (commercial or otherwise);
- Defame, abuse, harass, stalk, threaten or otherwise violate the legal rights (such as rights of privacy and publicity) of others;
- Publish, post, upload, distribute or disseminate any inappropriate, profane, defamatory, obscene, indecent or unlawful topic, name, material or information on or through [Coworking Space] servers.
- Upload, or otherwise make available, file that contain images, photographs, software or other material protected by intellectual property laws, including, by way of example, and not as a limitation, copyright, trademark laws (or by rights of privacy or publicity) unless you own or control the rights thereto or have received all necessary consent to do the same.
- Use any material or information, including images or photographs, which are made available through the services in any manner that infringes any copyright, trademark, patent, trade secret, or other proprietary rights of any party; Upload files that contain viruses, Trojan Horses, Worms, time bombs, candle-bots, corrupted files, or any other similar software or programs that may damage the operation of another computer or property of another coworker.
- Download any file that you know, or reasonably should know, cannot be legally reproduced, displayed, performed, and or/distributed in such manner.
- Restrict or inhibit any other user from using and enjoying the Services.
- Violate any code of conduct or other guidelines that may be applicable for any particular Service (including the Building Rules).
- Harvest or otherwise collect information about others, including email addresses, without the authorization or consent of the disclosing party.
- Violate any applicable laws or regulations; or
- Create false identities that mislead others.
Renewals And Terminations
This Agreement is automatically renewed at the end of each period with the consent of each party.
The T&Cs must be adhered to at all times. Failure to follow T&Cs can result in non-renewal or even early termination of the usage license. [Coworking Space] reserves the right to terminate any Service at any time, immediately and without notice, if you fail to comply with the T&C. This includes non-payment or violation of the space rules. If this happens, [Coworking Space] will refund any amounts paid for unused periods that remain after deducting any pending charges, on a prorated basis.
You may terminate this Agreement by giving a written notice of termination as established in this Agreement. Termination shall be in effect as of the end of that calendar month. Should you not provide timely notice of termination to [Coworking Space] then the Membership Period shall continue to the end of the following calendar month and the service fees for that calendar month shall be payable.
Invoicing And Payment
You will be automatically invoiced monthly in advance based on your membership option. Also included are any variable charges such as telephony usage that may have been incurred during the previous period. Payment is required at the beginning of the month for that period, at the date specified in the invoice. Payment for casual usage is either paid on the day of use unless other arrangements have been made with [Coworking Space].
[Coworking Space] reserves the right at all times to disclose any information about you. Your participation in and use of the Services as [Coworking Space] deems necessary to satisfy any applicable law, regulation, legal process, or governmental request, or to edit, refuse to post or to remove any information or materials, in whole or in part in [Coworking Space] sole discretion.
Confidentiality
You acknowledge and agree that during your participation in and use of the Services, you may be exposed to Confidential Information. “Confidential Information” shall mean all information, in whole or in part, that has been disclosed by [Coworking Space] or any participant of use of the Services or any employee affiliate, or agent thereof, that is non-public, confidential, or proprietary in nature. Confidential information also includes, without limitation, information about business, sales, operations, know-how, trade secrets, business affairs, any knowledge gained through examination or observation of or access to the facilities, computer systems and/or books and records of [Coworking Space], any analyses, compilations, studies or other documents prepared by [Coworking Space] or otherwise derived in any manner from the Confidential Information that you are obliged to keep confidential or know or has reason to know should be treated as confidential.
Your participation in and/or use of the Services obligates you to
- Maintain all Confidential Information in strict confidence;
- Not to disclose Confidential Information to any third parties;
- Not to sue the Confidential Information in any way directly or indirectly determined to [Coworking Space] or any participant or user of the Services.
All confidential information remains the sole and exclusive property of [Coworking Space] or the respective disclosing party. You acknowledge and agree that nothing in this T&C or your participation or use of the Services will be construed as granting any rights to you, by license or otherwise, in or to any Confidential Information or any patent, copyright, or other intellectual property proprietary rights of [Coworking Space] or any participant or user of the Services.
Participation In Or Use Of Services
You acknowledge your participation in or using the Services at your own free will and decision. You acknowledge that [Coworking Space] doesn’t have any liability with regards to your access, participation in, use of the Services, or any loss of information resulting from such participation or use.
Disclaimer Of Warranties
To the maximum extent permitted by the applicable law, [Coworking Space] provides the Services “as is” and with all faults, and hereby disclaims that with regards to the services, all warranties and conditions, whether express, implied or statutory, including but not limited to: merchantability, fitness for a particular purpose, lack of viruses, accuracy or completeness of responses, results, workmanlike effort and lack of negligence. There is no warranty, duty or condition of title, quiet enjoyment, quiet possession, correspondence to description or non-infringement. The entire risk as to the quality, or arising out of participation in or the use of the services, remains with you.
Exclusion Of Incidental, Consequential And Certain Other Damages
To the maximum extent permitted by the applicable law, in no event shall [Coworking Space] or its subsidiaries (whether or not wholly-owned), affiliates, divisions, and their past, present and future officers, agents, shareholders, members, representatives, employees, successors and assigns, jointly and and individually be liable for any direct, special, incidental, indirect, punitive, consequential or other damages whatsoever (including, but not limited to damages for: loss of profits, loss of confidential or other information, business interruption, personal injury, loss of privacy, failure to meet any duty (including of good faith or of reasonable care, negligence, and any other pecuniary or other loss whatsoever) arising out of or in any way related to the participation in or inability to participate in or use of the services, the provision of or failure to provide services, or otherwise under or in connection with any provision of this agreement, even in the event of the fault, tort (including negligence), strict liability, breach of contract or breach of warranty of [Coworking Space], and even if [Coworking Space] has been advised of the possibility of such damages.
Limitation Of Liability And Remedies
Notwithstanding any damages that you might incur for any reason whatsoever (including, without limitation, all damages referenced above and all direct or general damages), the entire liability of [Coworking Space] or its subsidiaries (whether or not wholly owned), affiliates, divisions, and their past, present and future officers, agents, shareholders, members, representatives, employees, successors and assigns under any provision of this T&C and your exclusive remedy for all of the foregoing shall be limited to actual damages incurred by you based on reasonable reliance up to [enter amount]. The foregoing limitations, exclusions, and disclaimers, including the previous sections) shall apply to the maximum extent permitted by applicable law, even if any remedy fails its essential purpose.
Non-Disparagement
You shall, during and after the participation in and use of the Services, refrain from making any statements or comments of a defamatory or disparaging nature to any third party regarding [Coworking Space], or any of [Coworking Space] officers, directors, employees, personnel, agents, policies, services or products, other than to comply with law.
Indemnification
You release, and hereby agree to indemnify, defend, and save harmless [Coworking Space] and [Coworking Space] subsidiaries (whether or not wholly owned), affiliates, divisions, and their past, present, and future officers, agents, shareholders, members, representatives, employees, successors, and assigns, jointly and individually, from and against all claims, liabilities, losses, damages, costs, expenses, judgments, fines and penalties based upon or arising out of your negligent actions, errors and omissions, willful misconduct and fraud in connection with the participation in or use of the Services. You further agree in the event that you bring a claim or lawsuit in violation of this agreement, you shall be liable for any attorney fees and costs incurred by [Coworking Space] or its respective officers and agents in connection with the defense of such claim or lawsuit.
Severability
If any provision or portion of these T&Cs is determined invalid, illegal, or unenforceable for any reason, in whole or in part, the remaining provisions of this T&C shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by applicable law.
Insurance
[Coworking Space] carries Liability and Business Personal Property insurance. As a user, you are not required but it is strongly suggested that you carry a Renters Insurance policy to cover your own equipment while using our space. That policy may cover your current residence/office, as well as the premises of [Coworking Space].
Want to learn more about Cobot? We are enabling independent coworking spaces to run their operations seamlessly by providing an intuitive and easy-to-use software. Our software also provides an easy-to-use solution for some of your legal processes - Invoicing, Online Accessibility, Cybersecurity, and more.
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