Updated July 26th, 2021
There is no way to completely avoid red tape and paperwork while running a coworking or flex space. Settling on a location, choosing and buying furniture, designing your website or planning your marketing strategy - all pretty fun so far. But running a coworking space is a business, and running a business means dealing with bureaucracy.
The paperwork required by the state and the tax authorities is standard, and there are many resources in the web. But coworking is a young movement, and the relationship with the customer is not completely clear yet. Is coworking a sublease? Is coworking a service? What kind of agreement should be used? How to best avoid complications with liability and insurance?
Important to note if you’re using a sublease model. Gernerally, you must be aware that you’re not supposed to charge more for the space than you are paying your landlord. Tenants don’t receive any additional value from you, and have specific rights, obligations, and real property interests. This means that you would not be able to terminate an agreement with a coworker if you’d need to, and that you would not be able to make any decisions without your coworker’s agreement. This sort of legal agreement would be more suitable for shared offices in which freelancers or companies decide to rent an office space together.
Coworking and flex spaces, however, offer more than just space. You provide a space, true, but you also offer your coworkers an internet connection, kitchen areas, access to a network of professionals, workshops, conferences, discounted rates for suppliers, and countless other benefits. Coworking is clearly a service, and this is why you can get rid of a lot of complications by legally defining your relationship with your coworkers as that of a host/member.
In that case, the best approach is to sign a service agreement or a license agreement.
A coworking service agreement is the commercial equivalent of an agreement for accommodation in a hotel. It’s also similar to the membership agreements that are signed in gyms. By selling memberships, you entitle your coworkers to use the space and the resources therein, but the space is not leased at any time and remains solely yours.
We have put together a coworking service agreement you can look at as a guideline. You can use the find and replace function to remove the sample data and enter your information: for example, find [space name] and replace all the entries with your space’s name. Consult with a lawyer to make sure the terms and conditions important to you are reflected in the service agreement as required by law in your country or region.
Sample Coworking Service Agreement
Member ID: ________
Coworking Terms and Conditions
Acceptance of Terms
The services [space name] provides to you are subject to the following Terms and Conditions (T&C). [space name] reserves the right to update the T&C at any time without notice to you.
A [space name] membership is a prepaid usage license to use the provided amenities on a monthly or casual basis as stated in the type of membership.
Description of Services
[space name] may provide you with access to office space, workstations, internet access, office equipment, conference space, knowledge resources, and other services (collectively, "Services"). Services are subject to the T&C at all times.
No Unlawful or Prohibited Use
You will not use the Services for any purpose that is unlawful or prohibited by these terms, conditions, and notices. You may not use the Services in any manner that could damage, disable, overburden, or impair [space name]’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 [space name] 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 and no further authorization or approval is necessary. 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, spimming 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 [space name] 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 right of any party;
- Upload files that contain malicious 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 which may be applicable for any particular Service (including the Building Rules).
- Harvest or otherwise collect information about other, including email addresses, without the authorization or consent of the disclosing party.
- Violate any applicable laws or regulations; or
- Create false identity for the purpose of misleading others.
Renewals and Terminations
This agreement is automatically renewed at the end of each period with consent of each party.
The T&C must be adhered to at all times. Failure to follow T&C can result in non renewal or even early termination of the usage license. [space name] 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, [space name] will refund any amounts paid for unused periods that remain after deducting any pending charges, on a prorata basis.
Members 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 any member not provide timely notice of termination to [space name] 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
The member is automatically invoiced monthly in advance based on their membership option. Also included is any variable charges such as telephony usage that may have been incurred during the pervious 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 arrangement have been made with [space name].
[space name] reserves the right at all times to disclose any information about you
Your participation in and use of the Services as [space name] 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 [space name]’s sole discretion.
You acknowledge and agree that during your participation in and use of the Services you may exposed to Confidential Information. "Confidential Information" shall mean all information, in whole or in part, that is disclosed by [space name] or any participant of used 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 [space name], any analyses, compilations, studies or other documents prepared by [space name] 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 deter mined to [space name] or any participant or user of the Services.
All confidential information remains the sole and exclusive property of [space name] 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 [space name] or any participant or user of the Services.
Participation in or Use of Services
You acknowledge that you are participating in or using the Services at your own free will and decision. You acknowledge that [space name] does not have any liability with respect 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, [space name] provides the Services “as is” and with all faults, and hereby disclaim with respect 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. Also 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 the member[space name].
Exclusion of Incidental, Consequential and Certain Other Damages
To the maximum extent permitted by the applicable law, in no event shall [space name] 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 [space name], and even if [space name] 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 [space name] 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.
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 [space name], or any of [space name] officers, directors, employees, personnel, agents, policies, services or products, other than to comply with law.
You release, and hereby agree to indemnify, defend and save harmless [space name] and [space name] 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 [space name] or its respective officers and agents in connection with the defense of such claim or lawsuit.
In the event that any provision or portion of this T&C is determined to be 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.
[space name] 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 [space name].
Each coworking space is unique, so we tried to keep these terms as general as possible. You may want to include additional articles about your plans, the reasonable use of the services you offer for free, pets or bikes, guests, check in procedures, keys, and out of office hours, etc. If you do, you’re welcome to share them with us and the rest of the community. We’d be happy to make them available for other spaces.