Every company needs a professional office, which is a place for performing daily professional duties, meetings with clients and business partners, intense discussions with management, but also team integration. Renting an office is a matter that both newly opened businesses and companies planning to expand their current operations, e.g., by opening a branch in a new city or country, must deal with at some point. In this case, renting office space is an investment that, on the one hand, provides comfortable working conditions and great operational flexibility, and on the other hand, allows for significant cost optimization. Thinking about the numerous benefits of this solution, it is impossible to forget about the necessary formalities.
The rental agreement for the office space turns out to be a priority issue. Template and examples of clauses – what to pay special attention to? Check how to prepare it correctly and effectively secure your interests!
Office space rental agreement – key aspects
Serviced offices are a service used by numerous small entrepreneurs, start-ups, as well as larger corporations needing professional office space for their employees in another city or country. This solution is highly appreciated among business owners from various industries mainly due to greater savings, access to many services in one place, and flexible rental terms. Especially in this last aspect lies perhaps the biggest difference between renting office space and serviced offices, which is an important incentive for a growing number of entrepreneurs.However, greater flexibility and the possibility of adapting the space to individual needs and preferences do not exempt from the necessity of carefully analyzing the office rental agreement. A properly prepared contract should protect the interests of both the lessor and the lessee. What should you pay attention to when signing an office space lease agreement? Here are a few key aspects.
DETERMINATION OF THE RENTAL OBJECT
A commercial lease agreement is a legally binding document regulating the terms of office space rental between the property owner and the tenant. In addition to the precise data of both parties, this document must also accurately specify the rental object. In this part of the agreement, you should include a detailed description of the premises, their location in the building, area, or number of rooms (taking into account any common areas such as a kitchen, toilet, or social room) to be made available to the tenant.
DURATION OF THE AGREEMENT AND EXTENSION OPTIONS
Another important point of each office rental agreement is the determination of its duration, which may be fixed or indefinite. In the first case, the rental agreement is concluded for a specific period and ends at the end of this period, e.g., after two years. On the other hand, a lease for an indefinite period does not specify such a term, and it can be terminated at any time with a notice period.
At Idea Place, we strive to meet the expectations of our clients. If you are interested in temporary rental, we offer offices for a specified period. However, if you value greater freedom and do not want to commit to too long-term obligations, you can opt for a lease agreement for an indefinite period with a one-month notice period. And if your company is growing dynamically and you need more office space for your team, you do not have to wait until the end of the current agreement – we are open to changes in this regard even during our cooperation.
PRICE AND RENT-RELATED FEES
The office space lease agreement must also specify the amount of rent and any additional fees (e.g., utilities or parking spaces), as well as the dates and methods of payment.
In the case of agreements concluded for a longer period, you may also come across an indexation clause, informing about an automatic rent increase in specific situations. The purpose of the rent indexation clause is to periodically (usually annually) adjust the rent to the current economic situation and prices of goods and services in Poland, their decreases, or increases. This way, the office rent maintains its commercial value. For agreements in which the rent is expressed in Polish currency, the inflation index published by the Central Statistical Office (GUS) is most commonly used. Make sure that the contract obliges the lessor to notify you of such an increase and indicate the new fee.
Financial matters are certainly one of the most important and most scrutinized elements of any office rental agreement – after all, no one wants to expose themselves to unexpected, hidden costs. Therefore, at Idea Place, we ensure transparency of the agreement and clear pricing of our services, and our clients know exactly what they are paying for, receiving everything necessary for effective business operations as part of the package.
Tenant’s rights and obligations
When it comes to drafting office rental agreements, there is an unwritten rule that the more detailed the document, the less risk of unwanted misunderstandings in the future. Based on this, an important point of the agreement is to specify the rights and obligations that the tenant undertakes to observe, as well as to determine the way of using the rented space.
SECURITIES AND DEPOSITS
The most common security for an office space rental agreement is a deposit, an additional amount that the tenant pays to the lessor as security for any damages or arrears in payments. Usually, the deposit is one or multiple monthly rents – if everything is in order, the entire amount is returned to the tenant at the end of the rental period.
Another important point of the office space rental agreement is insurance, which is the responsibility of both the tenant and the lessor. In addition, the contract may include information about interest charged in case of any delays in payments, as well as contractual penalties that may be imposed in strictly defined and adequately justified situations.
TERMINATION OF THE LEASE AGREEMENT
The office space rental agreement should also specify the issue of its termination, including possible reasons and procedures in such a case. As mentioned above, if the agreement was concluded for an indefinite period, the lessor or tenant have the option to terminate the lease, observing the contractual deadlines, and in the absence of such – complying with the statutory deadlines. However, in the case of a fixed-term lease, the conditions for its termination should be clearly described in the contract. Such a provision serves as protection for both the lessor and the tenant, eliminating the risk of a sudden termination notice.
It is also in the interest of the property owner to reserve the right to terminate the agreement without observing the notice period in certain cases. These may include, for example, situations where the tenant is in arrears with the rent or uses the premises improperly or contrary to their intended purpose.
Commercial lease agreement – how to analyze step by step?
When analyzing whether a particular commercial lease agreement is correctly drafted, the first step is to ensure that the lessor actually has the right to the premises and its lease. Pay attention to whether the parties to the agreement have been properly identified. It is also worth checking whether the partners are not threatened with bankruptcy or indebted – this applies to both sides of the agreement.
What to avoid in a commercial lease agreement?
When concluding an office rental agreement, it is worth paying special attention to issues such as:
- hidden costs – check whether the agreement does not include hidden costs that may significantly increase the actual cost of renting. At Idea Place, we ensure that the provisions of contracts are clear and understandable to everyone – monthly fees are fixed, and costs are predictable, so as a Client, you can easily plan your company’s budget;
- access restrictions – make sure that the office rental agreement does not impose any access restrictions. We know that such provisions could significantly hinder business operations, which is why Idea Place offices are available to our clients 24/7;
- method of termination of the agreement – carefully check the conditions for termination of the office space rental agreement and find out if they are acceptable to you. By using Idea Place services, you can count on the flexibility of the offer.
Tips for negotiating a lease agreement
As it turns out, a commercial lease agreement consists of many important issues – some of them are worth trying to negotiate. Attempts to negotiate can concern almost every element of the agreement – as long as we have valid and convincing arguments. To do this, knowledge of the market, familiarity with currently applicable rates, and competitive offers will certainly be useful.
Negotiations most often concern the rental price – do not hesitate to take advantage of the freedom to negotiate in this area as well. Many landlords are prepared for this and sometimes even willing to be somewhat flexible in this matter, but make sure that the rate you propose is reasonable and has a market justification.
Ewa Rogoż
Ewa Rogoż is an experienced coworking pioneer in Wrocław and the founder of IdeaPlace – the first professional coworking space in Lower Silesia. Her dedication to business development and support for entrepreneurs led to the creation of an inspiring space in the heart of the city. Ewa not only creates coworking spaces for freelancers but also micro-offices for small teams, thereby supporting diverse business initiatives in the region.
