A work space sharing agreement is a binding contract for the usage of work space on a sharing basis between two parties. Through this the two parties that is the owner and the tenant of the space can share the working space by paying an amount of fees in exchange for subletting the co-working space.
In most cases this is done by freelancers or startups in need of human interaction. Hence, it is suitable for them as it involves lesser amount of investment in the work place.
It is necessary to include all the necessary clauses in this document which would serve the purpose of both the parties lest one party may suffer due to this.
Advantages of having a work space sharing agreement
- If there is enough office space available, the owner can make use of it to scale the economic growth in a way to maximize the profits by way of letting out the available space for sharing.
- This would not only entail profits but also inculcate the spirit for co-working which would further help both the parties.
- Further, for the tenants it is beneficial in the sense that they can save up a huge amount of money by sharing the office space.
Essentials of a Work space sharing agreement
- Memorandum of understanding: this clause must be added which would create an understanding between the sharing members regarding the shared entities like water, electricity bill etc.
- Confidentiality clause: since here, the work space would be shared there is high possibility that some data might available to the members of the other organization in that case this confidentiality clause comes handy, such a non-disclosure clause would protect all the non-public information of the clients this includes the personal information entered by the tenants while signing the agreement, the clientele data, the mails received on the common shared network and so.
- Fair use of Premises: this means that since the work space will be shared the premises must only and only be used for fair business dealings. This also includes the installation of any hardware on the premises, this needs to be specifically mentioned in the clause that such installation is not to be allowed without the consent of the facility owner and the co-working facility members as it can affect the fellow members. This also includes the entry/exit timings, services and handling of the co-members property with care and caution.
- Payment: this includes all the details regarding the payment for the workspace, it should include the date on which the payment is to be made, the amount along with the mode of payment and further the penalty for late payment along with the security deposit amount.
- Service agreement: the agreement should be a service agreement rather than a lease agreement because a service agreement agrees to provide a license to use the services and amenities of the premises to the members which is in the form of work space. Further, the termination of a service agreement is easier as compared to a lease agreement considering the unilateral termination of a service agreement.
- Insurance: the agreement must specify that the owner of the work space will not be responsible in the event that any damage is caused to the member’s property and hence, the members must take rental insurance of their property in order to claim damages.
- Termination Clause: a termination clause must also be present which would provide the necessary details regarding the termination like the notice period or the appropriate way of handing over the facility to the owner.
Termination of work space sharing agreement
The agreement might be terminated due to many reasons like termination of the necessity for sharing the work place or any other such reason. Work space sharing agreements being service agreements are unilaterally terminated meaning that either of the parties can terminate it according to the agreement, provided it is done so by giving an appropriate notice in the period mentioned in the agreement.