In this article. Jahnavi Murthy pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses clauses to look out for in a co-working space agreements.
Co-working space essentially means leasing office space to individuals or groups of people via an agreement or on a subscription basis. In 2005, Brad Newburg introduced this concept by inaugurating the first work communal space in San Francisco.
Usually, different professionals share this workspace, which frequently results in boosting innovation among them as each one is a different profession and sharing the workspace creates easy camaraderie and exchange of ideas. The ease of communicating with other professionals and sharing their ideas or taking advice, provides the added advantage of resolving any issues or business problems in an effective and timely manner. Hence, new entrepreneurs prefer this concept of working in an affordable and lively atmosphere, while building and establishing their businesses.These workspaces have greatly benefitted those individuals who believe in working in a vibrant environment to foster their thoughts whether it contains a professional element or an artistic element.
The concept of sharing workspace was introduced in India in the last few years and has become very popular especially in cities like Delhi, Mumbai and Bengaluru.The demand for a moderate workplace has increased two-fold resulting in many realtors opening such work spaces to meet the demand. This concept is a big success amongst start-up companies in India as promoters take up such work spaces to keep down their overhead costs while building their businesses.
Coworking spaces have become popular in the recent years due to the influx of young professionals looking to explore a multitude of options in various spheres around the world. Coffee shops and cyber rooms had become a popular place for young professionals and entrepreneurs before the rise of coworking spaces. However, in the last couple of years, with the rise in such spaces being used in countries like USA and UK, India has also seen a boom in the rentals of such workspaces. For landlords, this offers an alternate means of earning money as they may share the space with other individuals who are prepared to pay a certain sum of money for a fixed period of time. It serves as a temporary platform to individuals who are new in their line of work and gives them flexibility in terms of rental.
The basis of the shared work space is the ‘Co-working space agreement’, which is an agreement that establishes the willingness of co-workers to work in a common workspace in their professional capacity, and legalises the terms of the work arrangements. Generally, a membership agreement is drafted after the submission of a business plan, following the signing of the coworking service agreement. Sharing a co working space usually lasts for over a year as laid down in the agreements signed by the professionals.
Important Clauses that must be included in a Coworking Service Agreement
1. Nature of the Agreement
The coworking space must be used for the purpose of work alone and nothing else. No co-worker may share his/her space with any friend/relative unless specified in the service agreement. The agreement lasts for a stipulated period of time and must be kept in mind while leaving the said co working space or while renewing the agreement in the next time period. The terms of the agreement are meant to be kept confidential and must only be discussed between the Co-worker and the Company or firm leasing the workspace. A certain set number of documents must be submitted alongside the signed service agreement for the purpose of proof and collateral in case the Co-worker violates any of the terms mentioned in the agreement.
2. Monthly Fees and Payments
The monthly fees, payments, additional fees and renewal fees must be mentioned in the agreement. The amount paid under each kind of fee including the security deposit must be mentioned. The mode of payment must also be specified along with the penalty fee. The deposit refund in case of termination of the agreement must also be specified.
3. Use of Premises
The use of the workspace must be clearly specified by the Client (the company/individual that leases the space) and must be included in the agreement after deliberation with the Owner of the workspace. The physical attributes of the workspace must be kept in mind while deciding on the number of co-workers and the type of work to be carried out, since it is a shared space and all co-workers’ needs are to be taken into consideration. The agreement must specify the prohibition of altering or changing the workspace in any way and the penalty levied in case of every such violation. The access of the workspace must be clearly mentioned including timings and days of the week. The use of other co-worker’s tools or space must be treated with utmost care and attention. The use of illegal downloads or infringement of copyrights/trademarks must also be mentioned in the agreement. A termination clause detailing the reasons for termination by the Owner in case of violating any clauses of the agreement, is a must.
Most clients or co-workers take up such workspaces on a short duration basis and hence do not take Insurance cover. However, in a coworking service agreement, the facility owner must clearly specify that in the event of any loss or damage of the client’s property, he/she is not liable to pay any compensation. Hence, typically, the Owner usually advises the client(s) to purchase personal rental insurance to cover their assets within the shared workspace.
5. Policies of the Workspace
Since there are different people from different fields renting the common workspace, the use of assets and physical furniture and fixtures such as tables, chairs, electrical fixtures, kitchen utensils, etc. are to be clearly specified in the agreement. In the event of needing any additional equipment or items, or using any assets beyond reasonable and usual usage, the client must inform the Owner in advance, in order to avoid any penalties or charges, as well as to avoid disturbing other co-workers.
6. Universal Feature
A coworking service agreement must be universal in nature as it caters to different people. Typically, the space is shared by people who work in startups, established companies or service professionals who are in consulting or advisory fields. Another popular set include artists and performing professionals who need such a space to explore the depths of their profession and carry out their work in a professional environment. Keeping all these elements in mind, the agreement must be of a wide nature to allow for such diverse individuals to enter into such agreements with ease. The use of legal words and phrases may be minimised to make them easy to understand. Since the co working space is shared in casual camaraderie, the tone of the agreement can also stay casual, while ensuring the legal protection of all involved parties.
iKeva is a well-known coworking space rental online firm that deals with leasing out such spaces for different individuals to use over a period of time. It has formulated its own service agreement that consists of the elements mentioned above. It has its office rentals primarily in cities like Bangalore, Hyderabad and Chennai and targets individuals that are working in different fields.
Top Space Rentals in India
In India, many coworking space rentals have opened up following the increase of Startups and individual entrepreneurs that look for such spaces. 
1. AltF CoWorking
It is a well-known space rental founded in 2015 in Noida that caters to the needs of many different professionals who work in different fields. Customisation of a workspace can be done according to the needs of client. A common Team Room is also built for professionals who need to engage in activities like brainstorming.
It was founded in 2012 originally in Noida but has its spaces in the cities of Bengaluru, Chennai and Mumbai. It is currently working with over 300 companies and 1000 co-workers in India.
3. Base Station
It is a web design studio which is also open to freelancers and entrepreneurs to share a common workspace. It is located in Delhi and has a colourful setting which enables professionals to brainstorm as well as work in a very relaxed manner.
It offers renting co-working spaces for a duration of over 9 months-12 months. It has an application that is available to iOS users as well as Android users. Apart from renting co-working spaces, it also offers third party meeting rooms for leading five star hotels across India.
5. Bengaluru Alpha Lab
It is more commonly known as BAL space. It offers a vibrant setting for professionals to work as well as keeps them motivated to achieve a certain goal. It is targeted at those individuals who are just starting out in the professional world and also helps Entrepreneurs to build their business.
Co-working spaces have been a success in India over the number of years and have proven to be elementary in the building of profession for Startups and Entrepreneurs. They have been well equipped with the needs of the clients that hire such spaces to work. It has progressed alongside the advancement of technology and now, many co-working space rentals have built online applications and websites that make it easier for individuals to book such a space in a short span of time. Usually, such spaces also get booked for a number of activities that involve professionals who work in different field but come together and interact in a common space.