Shared Workspace Agreements: Understanding Key Differences from the Traditional Lease; Negotiating Unique Terms

Description

The gig economy has helped spur the popularity of distributed workspace in commercial leasing. With some companies offering memberships nationally and globally, this model allows companies of all sizes to accommodate varying staffing needs without the expense of locating, securing, and outfitting office space.

The flexibility of a short-term occupancy agreement, collaborative environment, and turn-key features can hold considerable advantages over traditional commercial leases for early-stage companies, small businesses, and freelancers. Critical to the success of this model, however, is a clear understanding of how it differs from a traditional office lease and the impact of those differences on owners, providers, and end-users.

The principal difference lies in the grant of access to end-users--a license rather than a leasehold. Because the license merely grants a privilege of use rather than creating an estate in the property, the rights and duties between the respective parties shift. A reallocation of the associated risks necessarily follows.

Common issues of transferability and indemnification between the owner, tenant, and end-user must be balanced with terms addressing consent, revocation, and termination of the agreement.

Listen as our panel of experts in real property transactions provides practical guidance on how to best address the issues and balance the interests of each of the parties involved.