What is coworking?
Coworking is a brand new concept which is gaining popularity in India. It is a creative technique of work that involves a shared working space where people belonging from different businesses can interact, cooperate and work together.
They are service agreements in which coworkers use the space for a limited period of time (according to their needs) and leave when they are done. These agreements don’t bind the person with a company forever. Coworking agreements are different from general rental agreements. They mention all the facilities that a coworking space will provide to a coworker. A lot of people confuse coworking spaces with real estate businesses. Don’t know why but this happens. This confusion leads to misrepresentation of coworking agreements.
Though coworking is a western concept it is slowly being accepted in India. Many people have started understanding what coworking is but still a lot of people face problems while signing a coworking agreement. Below mentioned are essential points to keep in mind when signing a coworking space agreement.
- Agreement clause- There should be a clause which states very clearly that this is a service agreement. The word rental should not be mentioned anywhere.
- No hidden costs- Make sure that there are no hidden costs. All costs related to rent, taxes etc should be discussed earlier. It’s better to clarify everything before you sign a coworking service agreement.
- Seating cost- The agreement must state per seat price of a coworking office. Lumpsum cost should be avoided as the team size might grow in the future.
- Damage and penalty clause- You should carefully read and understand all the responsibilities related to any damage caused to the coworking office and its property. Also many offices don’t take the responsibility of clients personal property. If so, it should be mentioned in the agreement.
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- Security deposit clause- Every coworking space has its own security deposit rules. You should go through it before signing the agreement.
- Office timings – Before signing the agreement, you should clarify office timings and holidays at the coworking office. Make sure the same is mentioned in the agreement.
- Privacy- Coworking space is a shared office. Breach of privacy is very common. In order to protect your privacy you should make sure that a non disclosure clause is mentioned in the agreement. This clause will protect all your non public information such as your clients personal information etc.
- Termination of contract- Coworking space agreements are service agreements which are easy to terminate. No long procedure is needed. However the notice period of the termination should be clearly mentioned in the agreement.
- Various policies of the coworking offices- Every coworking office has its own policies/rules on drinking, smoking, pets and children. All the policies of the office should be mentioned in the agreement.
- Duration- The agreement should clearly mention the time period for which an entrepreneur or a freelancer is renting the office space.
- Taxes- A certain amount of taxes have to be paid by a coworker to the government. That amount needs to be clearly mentioned in the agreement.
Today coworking spaces are proving to be beneficial for businesses (both small and big). Anyone who is interested to join a coworking space can go through the above mentioned list to be aware about important points while going through the coworking space agreements in India.