Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: May 6, 2019
The Firm
201-896-4100 info@sh-law.comWhile commercial leases were once the gold standard, many small businesses are increasingly looking to co-work or share office spaces with other businesses rather than rent space exclusively for the business. Co-working and office-sharing may be cost-effective; however, the failure to appreciate the unique features and risks of co-working or office sharing can lead to legal headaches down the road.
There are various differences between co-working and office sharing, and the type of arrangement a business may choose to utilize may depend on the various needs of the business.
Co-working typically involves a group of individuals who convene in an open-layout shared space to work independently. Companies who run co-working spaces, WeWork Companies, Inc. for example, often provide a multi-location network of shared office space. Individuals who co-work are usually looking to avoid the isolation and distractions that may be encountered when working from home or frequent travelers. Co-working is typically funded by monthly membership fees whereby the cost varies based on the level of services provided. For instance, low-cost memberships may only offer occasional access to office space, while members also have the option of paying more to occupy the same desk every day.
Office sharing customarily involves a business or a group of companies that have an excess amount of office space which they share with smaller companies at relatively lower-cost and shorter-term than a lease. The business or companies sharing their office typically provide a receptionist, high-speed Wi-Fi, a copy machine, office supplies, coffee service and other amenities that a traditional office setting would offer. The company benefitting from the use of the excess space would typically sign a license agreement setting forth the costs and fees for such additional amenities.
For startups and other small businesses, office sharing or co-working provides the benefits of a fully-functional office at a fraction of the cost. Entrepreneurs can focus growing their businesses rather than waiting several hours for the cable guy to arrive, or remembering to order ink for the printer. In addition, many office-sharing spaces also offer common areas and organized opportunities for members to socialize and network.
Flexibility is also a big draw. The term of a traditional commercial lease often spans 3-5 years. Meanwhile, a shared office license can be as short as one or three months and the majority of office-sharing agreements are for a period of twelve months with opportunities to renew. For businesses that expect their office space needs to change significantly in the foreseeable future, a co-working arrangement often makes more sense.
Office Sharing Agreements:
Before entering into an agreement to co-work or share an office space, it is important to take the following considerations into account:
(1) License Agreements for Shared Office Space:
(2) Safeguarding Intellectual Property/Confidential Data in a Co–working Space: Co-working space offers far less privacy than a typical office space. For entities that have nondisclosure agreements with business partners and clients, it is important to consider whether the innate “openness” of co-working space will pose issues. Co-working spaces that aim to foster collaboration, such as incubators, often contain provisions in their membership agreements that prohibit businesses from requiring other businesses sharing the space to sign non-disclosure agreements.
Whether you are pursuing a commercial lease, co-working license or membership agreement, it is imperative to protect your legal rights. Prior to executing any form of agreement, we encourage all businesses to consult with an experienced commercial real estate attorney.
If you have any questions or if you would like to discuss the matter further, please contact me, Stephanie Edelstein, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
While commercial leases were once the gold standard, many small businesses are increasingly looking to co-work or share office spaces with other businesses rather than rent space exclusively for the business. Co-working and office-sharing may be cost-effective; however, the failure to appreciate the unique features and risks of co-working or office sharing can lead to legal headaches down the road.
There are various differences between co-working and office sharing, and the type of arrangement a business may choose to utilize may depend on the various needs of the business.
Co-working typically involves a group of individuals who convene in an open-layout shared space to work independently. Companies who run co-working spaces, WeWork Companies, Inc. for example, often provide a multi-location network of shared office space. Individuals who co-work are usually looking to avoid the isolation and distractions that may be encountered when working from home or frequent travelers. Co-working is typically funded by monthly membership fees whereby the cost varies based on the level of services provided. For instance, low-cost memberships may only offer occasional access to office space, while members also have the option of paying more to occupy the same desk every day.
Office sharing customarily involves a business or a group of companies that have an excess amount of office space which they share with smaller companies at relatively lower-cost and shorter-term than a lease. The business or companies sharing their office typically provide a receptionist, high-speed Wi-Fi, a copy machine, office supplies, coffee service and other amenities that a traditional office setting would offer. The company benefitting from the use of the excess space would typically sign a license agreement setting forth the costs and fees for such additional amenities.
For startups and other small businesses, office sharing or co-working provides the benefits of a fully-functional office at a fraction of the cost. Entrepreneurs can focus growing their businesses rather than waiting several hours for the cable guy to arrive, or remembering to order ink for the printer. In addition, many office-sharing spaces also offer common areas and organized opportunities for members to socialize and network.
Flexibility is also a big draw. The term of a traditional commercial lease often spans 3-5 years. Meanwhile, a shared office license can be as short as one or three months and the majority of office-sharing agreements are for a period of twelve months with opportunities to renew. For businesses that expect their office space needs to change significantly in the foreseeable future, a co-working arrangement often makes more sense.
Office Sharing Agreements:
Before entering into an agreement to co-work or share an office space, it is important to take the following considerations into account:
(1) License Agreements for Shared Office Space:
(2) Safeguarding Intellectual Property/Confidential Data in a Co–working Space: Co-working space offers far less privacy than a typical office space. For entities that have nondisclosure agreements with business partners and clients, it is important to consider whether the innate “openness” of co-working space will pose issues. Co-working spaces that aim to foster collaboration, such as incubators, often contain provisions in their membership agreements that prohibit businesses from requiring other businesses sharing the space to sign non-disclosure agreements.
Whether you are pursuing a commercial lease, co-working license or membership agreement, it is imperative to protect your legal rights. Prior to executing any form of agreement, we encourage all businesses to consult with an experienced commercial real estate attorney.
If you have any questions or if you would like to discuss the matter further, please contact me, Stephanie Edelstein, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!