5 Things to Consider Before Renting a Coworking Space

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Date published: 18 Sep 2020
by DocPro Legal
Last Update: 18 Nov 2020

For startups looking for a commercial property for rent, it is making more and more sense to rent a coworking or shared office space rather than a traditional office. Not only does a coworking space offer lower rental prices and flexibility, but also does it allow you to spark off business collaborations working next to all kinds of entrepreneurs. According to studies, working in a coworking environment even makes employees 74% more productive compared to working in traditional setups.


Can’t wait to start renting a coworking space? Here are the 5 things that you must consider before doing so:

  1. How much is the rent?

  2. How long is the rental period?

  3. Resources and services provided.

  4. Terms and conditions.

  5. Networking opportunities.

5 Things to Consider Before Renting a Coworking Space

What is a Coworking Space?


Coworking space generally refers to a shared office space among people working for different companies or self-employed people. It is an affordable option for those who would like to work in an office environment, as renting a coworking space can be as cheap as buying two cups of coffee a day. According to studies, the average monthly rent is $195 in the US, €189 in Europe, and £168 in England. Nonetheless, rental costs vary from different membership-based models.


In addition to financial benefits, other perks of coworking allow you to:

  • Avoid the distractions of home office

  • Avoid the cosiness of working in a coffee shop

  • Acquire presentable venues for meetings and conferences

  • Enjoy freedom from administrative chores, such as hiring cleaning staff and receptionists


Difference between Coworking Space and other Commercial Property for Rent


Unlike most commercial property for rent, coworking space is generally rented through a licence to occupy instead of a lease.  The main difference between a lease and a license, legally, is that a lease creates an interest in the land but a licence to occupy merely gives you permission to use the property. A licence to occupy is a legal agreement between the licensor (the property owner or lessor) and the licensee (the seeking to use the property), giving the licensee the right to occupy the property for a defined length of time. A licence is only a personal interest and this interest can be revoked at any time. This offers less legal protection than a tenancy or a lease, who would include interest in the underlying property.


For an example of co-working space license agreements, feel free to download  from Docpro.com: https://docpro.com/cat128/property/licence-to-occupy-lodger-agreement 


For other online rent agreements, please refer to: 




Who needs a Coworking Space?


Typical tenants of a coworking office are freelancers, entrepreneurs and start-ups, for whom flexibility is crucial. They can choose to work around the clock and to book multiple rooms when business opportunities arise, and to work at a relaxed pace at his/her own desk when working on personal projects. 

Other than flexibility, it is particularly useful for independent working individuals to work in a community created by a coworking space. Oftentimes, self-employed individuals work from home with various distractions which possibly undermines their productivity. They also lack day-to-day interaction with other people of related industries, so establishing a business network could be difficult. In a coworking setting, they can interact with other tenants in the workspace. Entrepreneurs may even find a co-founder for their start-up by connecting the right people!


That said, even the bigger companies are ditching traditional commercial property and renting a coworking space. With the pandemic and staff working from home, more companies are opting for flexible working spaces where they can increase or decrease the number of staff easily without having to commit to fixed office spaces for a long period of time.  


5 Things to Consider Before Renting a Coworking Space


Sounds great? Pause and ask yourself the following 5 questions before jumping on board to a coworking environment!


#1 How much is the rent of the coworking space?


The primary factor that determines the rent is how much space you need. If you move from a traditional office, you may want to occupy a serviced office to ensure some private space for your company. In addition, if the nature of your business deals with confidential information from your clients or trade secrets, you may also wish to rent a dedicated workspace accessible only with keys or passwords.


On the other hand, if you are a lone wolf taking freelance jobs from time to time, renting just a shared desk may suffice which allows you to pay lower rent. If your company relies on sales and often attend out-of-office meetings, you may also consider scaling down your workspace size according to the number of people that would stay in the office. 


Mode of payment is also key - whether you pay it on a monthly basis, or on a quarterly basis? Do you sign a year-long contract and pay in instalments, or do you renew your tenancy periodically? These are all questions you should settle among yourself and the coworking space operator. 


Most coworking spaces would include daily expenses such as electricity, water, internet, cleaning and other amenities in the rent.  Some coworking spaces, however, impose extra charges for using conference rooms, photocopiers, secretarial support or other services. Make sure you take into account these additional fees when comparing different coworking spaces. 


To prevent any future disputes regarding rental prices and additional charges, prepare and sign a Coworking Space Licence after your negotiations with the coworking space operator. 

#2 How long do you have to rent the coworking space for? 


A key advantage of renting a coworking space is the flexibility of the rental period. Lease agreements for traditional offices often require a year-long rent before you can alter contract terms. With coworking spaces, terms are usually more flexible to cater to the needs of small-scale businesses. In particular, it allows start-ups to quickly expand your company by hiring more employees to respond to business growth. Even if you encounter difficulties regarding cash flow, you can easily terminate your lease without being bound to pay for year-long rents. 


Usually, extending or renewing would not be difficult. Download this Tenancy Agreement Renewal document if you would like to renew your lease later on!


The most common length of a coworking space rental agreement is 3 months. But if your business growth has become stable over the years without any significant changes to headcount or business model, then a long-term lease of 6 months to one year may suit you better. Coworking spaces will generally offer larger discounts for longer-term leases.

#3 What resources and services could the coworking space provide?


Administrative Services


Most coworking spaces offer administrative assistance such as a reception desk, hiring cleaning services and security staff. Utilities such as electricity, water and gas are generally included in the rent. Your business can benefit from coworking spaces when you don’t need to spend time on managing miscellaneous tasks that pull you back from developing business ideas. Division of work becomes more specialised, so you get to focus only on what drives your business forward.



Coworking spaces may include a ton of different amenities and benefits, including the following:


  • Coffee, tea and beer

  • Refreshments

  • Wi-Fi

  • Printer and scanner

  • Lockers

  • Heating and air conditioning

  • Power backup

  • Music


Most of the time, these amenities are included in your rental payment. They are the key components to increase the productivity of employees, as they make working at coworking spaces a more pleasant experience.


Variety and Quantities of Rooms


Many coworking spaces offer private rooms and conference centres of varying sizes. Look at your business scale and figure out the size of rooms that you commonly need, then check if your preferred coworking space offers them. Especially for conference rooms, you need a decent and presentable one to display a professional image to your clients or collaborators. 

Besides the shape and size of rooms, you have to make sure that you can use them when you need them. Check the booking schedule with the coworking space operator and understand the intensity of usage. If the meeting rooms are always fully booked, you may want to opt for another coworking space if your business requires frequent client meetings. 


Business Events


Another special feature that a traditional office space fails to provide is the opportunity to participate in or organise workshops and social activities. Some coworking spaces even hire a team of event planners to organise business talks, workshops and sharings from time to time. Participating in such events may be free of charge, depending on your membership model.


This is a great opportunity for you to connect with other entrepreneurs in the same industry, or to collide with experts in other fields. Being readily accessible to such networking events is definitely a plus.


If you find the resources and services below your expectations, don’t panic. Communicate it to the coworking space operator first. The problem could be alleviated quickly.


However, if things don’t work out, you can also choose to terminate your rental agreement early - another flexibility of renting a coworking space. Issue an Early Termination Notice in relation to Tenancy Lease (Breach of Contract) if the coworking space operator fails to comply with the stipulated terms and conditions.


#4 What are the terms and conditions of renting the coworking space?


A rule of thumb is that the larger coworking space operating corporations are, the stricter the set of rules and protocols are to be followed. Before placing your deposit, check out the terms and conditions of the co-working space. Find out the penalties for breaking the lease and its consequences. 


As mentioned above, renting a co-working space merely gives you a personal right to occupy the space, and does not give you actual property rights and thus less protection than a lease. For example, the operator may have the right to move you to another location should the current lease with the owner be terminated. As such, it is important to check these terms before signing.


Also, get a one or two-day free trial before committing to a coworking space if possible. It is the best way for you to get a feel of working there. Most coworking spaces offer such trial days occasionally and some offer such trials any time of the year upon booking. 


Even if do not get a free trial, do remember to ask for a “grace period” of the lease, during which you can cancel the contract without the need of explanation. In case you want to quit the coworking space in the middle of the “grace period”, simply send an Early Termination Notice in relation to Tenancy Lease (Mutual Agreement).


#5 Who are the other tenants in the coworking space?


In addition to the relatively-lower rent compared to an office, the connections you can make at a coworking space is a gold mine. For example, a lot of businesses meet their ideal digital marketing agency while connecting with coworkers in coworking spaces. Other common long-term business cooperation includes that with website developers and graphic designers.


Start-ups entrepreneurs may also meet like-minded partners and improve business performance by combining the perks of both companies, ie. synergy. Learn more at Business Acquisitions vs Asset Acquisitions - What are their differences?


Speaking from experience, the two founders of DocPro met at a coworking space. In addition, if you are a service provider like DocPro, a coworking space may also be the perfect place to find potential customers. It is more effective to market your services to your neighbours than someone you have absolutely no connection with. Find out from your coworking space if you can advertise on their website, conduct a talk for their members, or set up a booth to promote your services. 



A special note in times of pandemic: Stability matters.


In the face of challenging circumstances, it is important to make sure the coworking space owner is financially stable before handing over your rental deposit. Do online research, ask for recommendations and referrals to make the right choice. Accountability is key.


Under the Covid-19, the working style has drastically changed to work from home. If you are a start-up entrepreneur and most of your employees opt for a work-from-home policy, you may be paying for 4 desks when you are only using 2. Especially in times where cost-saving is a priority, rent is a major investment for any company. You can ask for more flexibility in the use of desks or for rent reliefs, rebates or any kind of support for businesses with a Request Letter from Tenant to Landlord (Covid-19). In times of economic downturn, a good coworking space operator should be able to cater to your needs.


Even if you and your team are working in the coworking space without a need for rental relief, you should also make sure that sufficient infectious control measures are taken. Check if the coworking space implements measures such as temperature checking, social distancing by reducing the density of space usage, contactless environments and frequent cleaning. It is vital to ensure your employee’s safety.





After considering the above, you are ready to kickstart your rental arrangements. Click here to get some templates now!


Licence to Occupy - Commercial / Shared Office Neutral 

Licence giving the licensee the right to occupy the commercial property for a defined length of time. A licensee has only a personal interest and this interest can be revoked by the landowner at any time. This is a shared office arrangement drafted in neutral form. 


Licence to Occupy - Commercial / Shared Office Licensor 

Licence giving the licensee the right to occupy the commercial property for a defined length of time. A licensee has only a personal interest and this interest can be revoked by the landowner at any time. This is a shared office arrangement drafted in favour of the Licensor. 


Licence to Occupy - Commercial / Shared Office 

Licensee Licence giving the licensee the right to occupy the commercial property for a defined length of time. A licensee has only a personal interest and this interest can be revoked by the landowner at any time. This is shared office arrangement drafted in favour of the Licensee.


Tenancy Agreement (Commercial) - Neutral

Tenancy Agreement for the lease of commercial property with options on rent-free period and early termination. The term is generally less than 3 years. This is drafted in neutral form. 


Tenancy Agreement (Commercial) - Tenant

Tenancy Agreement for the lease of commercial property with options on rent-free period and early termination. The term is generally less than 3 years. This is drafted in favour of the Tenant.


Termination Notice in relation to Tenancy Lease

In relation to a lease/tenancy/rental, a termination notice is given by the Landlord to the Tenant in accordance with the notice period under the Agreement. This is drafted from the perspective of the Tenant.



Please note that this is a general summary of the position under common law and does not constitute legal advice. As the laws of each jurisdiction may be different, you may want to speak to your lawyer.


Coworking, Commercial Property For Rent, Rent, Online Rent Agreement, Shared Office Space, Office Space For Rent, How To Rent, Workspace, Rent Room, Places To Rent


DocPro Legal

DocPro Legal is a team of legal professionals with a passion for making quality documents and legal contract templates widely available to the public through cutting edge technology. Our lawyers are qualified in numerous common law jurisdictions including the United Kingdom, Australia, New Zealand, India, Singapore and Hong Kong. We have experience in major law firms and international banks with expertise in business, commercial, finance, banking, litigation, family, succession and company laws.

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