Should I Sublease or Licence My Spare Office Space?

Wednesday, 12th September 2018  |  Articles, How To, How To

Thinking about renting out your spare desks as coworking desks and serviced offices? Here’s a look at the types of agreements used.

Whether you’ve moved into an office that you plan to grow into or if you’ve downsized and have spare desks and offices in your building – you’ve got spare office space – a valuable commodity.

Remember:

Spare Desks = The Perfect Coworking space for rent

Spare Offices = The Perfect Serviced Office for rent

Here, we’ll look at the types of agreement used in renting commercial property, and why at Rubberdesk, we give our members use of our licence agreement.


Lease or Licence – What’s the difference?

To rent out spare office space, businesses either use a sublease or licence agreement. So what are the key differences between an office lease and an office licence?


Lease

Between a landlord and tenant, granting the legal right to exclusive possession of a premises for a period of time in return for rent.

  • A lease grants an interest in land, and offers the tenant associated legal security and rights.
  • Under a lease, the tenant has the right to exclude all others from the premises.
  • If the land is sold, it is sold subject to the conditions within the lease.
  • Any changes to the lease require the landlord to surrender the lease and grant a new lease.

Licence

Between a licensor and licensee, granting contractual rights to occupy premises in return for a licence fee, without entitlement to exclusive possession.

  • A licence is generally more flexible as it is a contractual agreement between two parties.
  • The amount of space and the details of the arrangement in a licence can easily be adjusted.

Can I Sublease My Spare Office Space?

So, you’re the leaseholder and there’s a part of your office that’s sitting there unused. Why not rent it out and earn some cash, like thousands of other business owners?

  • Step 1 – Decide if you want to licence or sublease your office space
  • Step 2 – Seek written permission from your landlord

Your leasehold agreement will probably state that landlord approval should be sought ahead of subleasing. And while licences and leases are different – we suggest writing to your landlord in either case.

Generally speaking, landlords are keen to keep their tenants happy. Happy tenants stay for longer and hence give the landlord fewer vacancy headaches. Supporting a tenant as they look to get help with rent is definitely in your landlord’s interest.

Landlords tend to prefer a licence which, from their perspective, is often more attractive as licensee protections are fewer than under a lease.


Why Do Businesses Licence Spare Office Space?

Licences are perfect for commercial office space that is being shared in some form. Where shared facilities such as kitchen, meeting room or reception areas are offered, a licence arrangement makes sense, since exclusive rights cannot be guaranteed.


There are a number of reasons businesses share office space.

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Business Flexibility

Over time the amount of floor space a business needs will change. As your business grows or contracts the space needed will flex. However, the physical space occupied is often fixed in a three or five year leasehold agreement.

Flexibility is a key reason that businesses use serviced offices and coworking spaces. Let someone else create a beautiful place to work so you can focus on creating a beautiful business.


Growing into Office Space

Licensing out spare office space is perfect for a growing business. While the space is too large for their needs, they earn renting coworking desks and serviced offices, while sharing the facilities.


What does a Commercial Office Space Licence Look Like?

Rubberdesk makes it easy for businesses to share office space and has put together a Short Form Standard Licence Agreement. When Hosts and Guests rent commercial office space through the Rubberdesk platform, they can use this agreement as part of the service.

The Agreement describes the space to be occupied, what’s contained within it and included in the licence fee. It describes the permitted use, house rules and good behaviour as well as detailing obligations on both parties.

The duration of a licence is typically much shorter than a lease. This flexibility is reflected in the terms of a licence agreement.


I Want to Rent out My Spare Office Space – What Next?

So, you’ve got spare office space and decided to earn from renting it out – good job!

Renting your spare office space on Rubberdesk.com.au is the simplest way. We’ll find someone to pay you for your serviced offices and coworking desks.

On Rubberdesk it’s free to list and we take care of the payment processing and licence agreement for you.

Rubberdesk only gets paid when you do and only 10% of the monthly licence fee. And you’re in total control throughout…

  • You decide how much to charge
  • You decide who to accept bookings from
  • You’re in control
  • We’ll take care of the rest

So why not start earning now…

Become a Rubberdesk Host