Launching or expanding a business often starts with finding the right space—and for many Washington entrepreneurs, coworking offers the perfect mix of flexibility and affordability. But before signing your first license agreement, it’s important to understand how coworking arrangements differ from traditional commercial leases and what legal protections may (or may not) apply. The right agreement can empower your business to grow confidently; the wrong one can expose you to unexpected risks or restrictions.
At North City Law, our Washington coworking space attorneys help business owners evaluate, draft, and negotiate license agreements that protect their access, operations, and investments. Contact us today to schedule a consultation with an experienced coworking space lawyer and start your venture on solid ground.
What Should New Business Owners Know About Coworking Spaces vs. Commercial Leases?
Coworking spaces offer an attractive solution for freelancers, startups, and small business owners, providing flexibility and cost-effectiveness compared to traditional office rentals. However, before committing to a coworking space, it is essential to consider the potential drawbacks compared to a conventional commercial lease—This article explores the differences and identifies some terms to look for when comparing offers. A Washington coworking attorney can help you evaluate contract terms, identify hidden liabilities, and negotiate fair conditions that match your company’s operational goals.
What’s the Legal Difference Between a Lease and a License Agreement?
A coworking space is rented with a license instead of a lease. A lease is an exclusive right to possess including the right to keep others, including the landlord. A license, by comparison, is a nonexclusive right to use. Licenses may also be revocable while leases are usually for fixed terms. Consulting a license agreement attorney before signing can help you confirm whether your arrangement provides the legal stability your business needs—or if a traditional lease might offer better protection.
What Should You Consider When Reviewing a Coworking Space License Agreement?
Before signing a coworking space license, it’s important to understand what rights you actually have—and what you don’t. Unlike traditional leases, license agreements often favor the property owner and provide limited tenant protections. Reviewing each clause carefully can help you avoid unexpected changes in access, costs, or stability. A Washington coworking space attorney can guide you through key considerations such as usage rights, duration, transferability, and renewal options to ensure your agreement aligns with your business goals.
- Non-Exclusive Use. A business shares facilities with other businesses, communal areas, and amenities may be managed by the landlord.
- Short-Term Commitment. Coworking licenses can be short-term, even month—to-month, which gives flexibility to change workspace as needed.
- Limited Legal Protections. Licensing offers less legal protection than leasing. Providers can usually change licensed space and amenities anytime. Licenses are also usually personal and non-transferable, which can be a drawback for businesses considering sale or assignment.
- Stability and Security. Commercial leases are intended for long-term tenancies, often including stepped rent and renewal options for added security to the tenant beyond the first lease year. Tenants also enjoy commercial tenancy rights while licensees do not.
Before finalizing your agreement, it’s best to have a coworking space attorney review your license to ensure your rights, access, and business flexibility are fully protected.
What Key Terms Should You Look for in Your First Coworking Space License?
When reviewing your first coworking space license agreement, understanding the details behind each clause can make the difference between flexibility and frustration. A Washington coworking space attorney can help you identify which provisions are negotiable and ensure your agreement provides the stability your business needs to thrive. Key terms to review include:
- Usage Rights: Pay attention to which areas of the coworking space a license entitles access to, including communal areas, meeting rooms, and other shared facilities. Clarifying these rights upfront can prevent surprises later. Where access is later changed, this can sometimes also be a basis for demanding lower rental fees.
- Renewal Terms: Plan for license renewals by discussing the renewal terms and conditions before signing. While stepped rent and renewal options are less likely to be available, sometimes longer initial terms are available by negotiation.
- Service Level Agreements (SLAs): These are contract terms between a service provider and a customer that define expected levels of service. Things like performance standards, response times, uptime guarantees, and penalties for not meeting agreed-upon standards can all be accounted for. In the coworking context, be sure to ask about things like after-hours access, receptionist schedules, and when the HVAC will be run.
- Networking Opportunities: Coworking spaces offer networking opportunities. Join community events to expand your business connections. Explore the provider’s community events to enhance your business connections.
Protect Your Business Before You Sign
Entering a coworking space can be a smart move for growing businesses—but it’s also a legal commitment that deserves careful attention. Every clause in your license agreement can affect your flexibility, liability, and ability to expand down the road. Before you sign, take the time to review your agreement with a Washington coworking space attorney who understands how to protect your interests.
At North City Law, we help entrepreneurs and small business owners to structure and negotiate license agreements that minimize risk and support long-term success. Contact us today to schedule a consultation and move forward with confidence in your new workspace.