April 18th 2024
Serviced offices as a concept have been massively growing in popularity in recent years. If you’re unfamiliar with the term, let’s outline it for you.
Serviced offices can be either singular office spaces, or office buildings, that are rented to businesses for daily use, but are not managed by the occupant themselves. They are typically an all-in-one solutions when it comes to office space, offering flexible and customisable spaces, as well as access to all on-site amenities, all for a single monthly fee. They’re great options when you’re choosing an office space for your start-up, or even when you’re an established business.
Today, we’re going to outline why businesses are so switched on to serviced offices, by helping you to understand where you stand when it comes to the fine print of a serviced office agreement.
Understanding the Lease Agreement
Contractual obligations. It’s an ugly term, we know, but an incredibly important one. When entering into a serviced office agreement, you’ll have set terms and conditions that will need to be adhered to. Much like renting a house – you’re renting a space to work in.
Serviced offices will typically be rented out on a monthly basis, although longer-term agreements can be made by talking to your office providers. It will be critical for you to iron out exactly how long you will need to occupy the space, and make sure that timeframe is reflected in your lease agreement. As well as this, you’ll need to ensure that any access to the on-site amenities you’ll need are also included.
Any breaches of a serviced office agreement can result in penalties or even eviction – so make sure to read every last word!
What are the Expected Costs and Fees?
Typically, serviced offices are rented out using a single monthly fee. This is inclusive of rent, bills, and any added extras that you choose to have access to within the building.
Over at RubberDesk, they’ve delved into the nitty gritty on flexible office space costs in the UK, explaining that “If for example, each desk in a private office costs £625 per person, the cost for a 6-person office is simply £3,750 (£625 x 6 = £3,750 per month + VAT)”, going on to explain that credit can sometimes be afforded to those who require the use of meeting rooms, board rooms etc, but these facilities can also be worked into the monthly price too.
In short, the more space you need the more you pay. But the best part is that you already know the total cost of your tenancy in the space per month right from the start, so budgeting becomes a breeze.
Do Extra Services and Amenities Cost More?
We’ve mentioned that there can be added extras when entering into a serviced office agreement. These can vary from access to meeting, board, and communal break rooms to printing facilities and higher-speed Wi-Fi connections.
Some of these can be included in your lease agreement (internet connections, telecoms connections and a full suite of furniture should always be as standard), but some can be shrouded as hidden costs that you’ll need to be aware of before signing on the dotted line.
Access to the amenities of the office building always adds extra convenience to your space, giving you more freedom to conduct your business without incurring those costs.
Seeing as each individual space can differ wildly, we recommend asking your office provider for a full breakdown of what is available on the site and which services/areas, if any, are likely to cost extra to access.
The Legal Responsibilities of Tenants
When entering into a serviced office agreement, there are a set of legal responsibilities you are required to adhere to, just as you would expect when renting a house, for example.
Some legal responsibilities for serviced offices can include:
- Maintaining a professional working environment
- Keeping the space clean and tidy
- Ensuring payment is made promptly each month
- Ensuring visitors are signed in and out of the building
Your serviced office provider must outline the expectations of the space to you, and it should also be in writing in your lease agreement. This will help you in the future if there are any legal disputes.
Coming to an End: Termination Clauses
A serviced office agreement can be terminated by either the occupant or the landlord under certain conditions. It’s very important to review both the renewal and termination clauses, understanding the notice period needed to end an agreement as well as whether or not you’re under a rolling contract.
If you wish to end your lease as a tenant, you must do so in writing in accordance with the terms of your lease if it falls within the Landlord and Tenant Act of 1954.
Your landlord may wish to terminate your lease if you have not adequately maintained the building or space to the owner’s standards, if they are demolishing the building, or if there are repeated delays in payments.
Top of the List: Security and Confidentiality
When leasing a serviced office, you should carefully review your lease agreement to identify any clauses related to data security and the confidentiality of sensitive business information. These clauses typically outline the responsibilities of both the tenant and the landlord in safeguarding your information, and will cover aspects such as data storage, data access, and any data breaches that could occur.
One important clause to look for is the requirement for the landlord to implement adequate security measures to protect their tenants’ data. This may include digital security measures such as firewalls, data encryption, and regular data backups. As a tenant, you should always be ensuring that your serviced office provider is committed to protecting your business’ data.
Dispute Resolution: The Cool-Headed Approach
During your serviced office agreement period, you may find yourself in a sticky situation with the landlord. It’s your word against theirs, and sometimes this can lead to unsavoury results.
When conflict like this arises, it’s important for you to approach it with a clear mind, not blind rage. From the get-go, you need to ensure that all lines of communication are open between you and your landlord. Whether it’s through face-to-face discussion, email, or written letters, you’ll need to explain any grievances clearly and concisely on your end, as well as provide supporting evidence of any claims you have. Your landlord should also be able to substantiate any claims they have too.
If these lines of communication prove unsuccessful, you can enter into mediation or arbitration. Mediation enlists a third party to review both sides and offers advice on a peaceful resolution. Arbitration also enlists a third party, but makes a clear decision based on the two sides’ evidence that can be enforced by law.
Renewal and Expansion Options
There will eventually come a time where you need to decide. You can either stay in the office you currently occupy (renewal) or move to a bigger office to accommodate your business’ growth (expansion).
Renewing your current serviced office lease is the most straightforward option. Your serviced office provider will typically offer you the option of renewing your lease when the end is in sight. This allows you to continue benefitting from your current space, including all of the amenities and services you currently have access to.
If, however, you’re looking to grow your business and want to upscale your office, you’ll need to look at expansion. In this case, your serviced office provider may have larger spaces available either in the same building, or buildings close to where you’re currently situated. Moving to a close by space with the same provider allows you to keep your current business address and the perks that you’ve been used to so far. In the end, this can save you heaps of money that would have otherwise been spent on relocation.
Legal Assistance – Professionals Know Their Stuff
As with any legally binding contract or situation, it’s a great idea to seek advice from professionals who know what to look for.
Bringing on a legal expert can help you to understand the complex terms and conditions within your serviced office agreement, as well as your rights as a tenant. On top of this, they can also help you to negotiate the terms of your agreement with your landlord, helping you to get additional services included in your monthly fee.
They may also be able to offer advice should a dispute come up, as discussed previously, so all-in-all they’re a fantastic resource to have on hand.
Serviced office agreements can feel like navigating a minefield at first glance. But with a proper understanding of the terms and conditions, you can enjoy your space without worry.
We hope you’ve gained enough knowledge from us today to go into your next serviced office agreement without any question marks!
To make it even easier for you, here at Click Offices, we have serviced offices in many locations around the UK and Ireland, and our serviced office agreements are always easy to understand.
Head over and use our free office search tool to find your perfect new office today.
