What’s Involved in Sharing Office Space

Many, if not most, small businesses and entrepreneurs use commercial space to house their operations, and sharing these work spaces is often a smart business decision. It's best to share with others whose needs are similar to or mesh well with yours, often someone in the same or a similar profession.

Sharing office space, for example, makes sense for many types of professionals, including doctors, lawyers, psychotherapists, massage therapists, acupuncturists, chiropractors, and financial planners. Many of these professionals do administrative work from home and need office space only for meetings. Office sharing works particularly well for people who see clients or patients, because it can cost a lot to maintain an office with a reception area (especially if it's staffed) and private meeting or treatment rooms, and sharing the expense makes it more affordable.

Regardless of what type of business you have and what type of space you're looking to share, there are a few basic issues you'll need to sort out:

Responsibility for the space. One of the first questions that will come up is who has ultimate responsibility for the work space. If you've joined with others to find a space to share, you'll probably have equal responsibility from the beginning. However, if one person owns a building, then the others could buy a share of the property to become owners, or pay rent for the space they share. If one person is already leasing the space to be shared, then the sharers need to decide whether they'll join as primary tenants or become subtenants. Note that any time there's a tenant/subtenant arrangement, it's important for the primary tenant to have the landlord's approval. You'll likely need to give your landlord the same information about your subtenant that you had to provide about yourself when you first leased the space, such as income, rental history, references, and financial condition.

Making decisions. You'll need to decide how to make decisions about your shared space, on issues from appropriate use to appropriate decoration. You might defer many of those decisions to the owner or master tenant, if there is one. If you have equal ownership or responsibility, then you'll have to figure out how you want to make decisions together.

Dividing costs. No matter who owns the space—whether it's one of you, all of you, or a commercial landlord—you and your sharing partners will have to decide who will pay for what. Often, sharers use different amounts of space, sometimes even for different purposes. If your use isn't equal, either in terms of time or space, you'll need to come up with a payment arrangement that's fair to everyone (and flexible, in case people's needs change).

Use of common space. Most work spaces have some common space, even if it's only a small entrance area at the front of a warehouse. And it could be much more than that—in many shared office suites, there's a reception area; an administrative area that includes storage space, work space, and office equipment; a separate conference room; rest rooms; and possibly even kitchen facilities. No matter how much common space you have, you'll need a clear agreement about how it will be used. You will also need to agree on how you will pay for this use, such as by:

• splitting the cost of the common space equally regardless of how much private space each sharer uses
• pro-rating the cost of the common space based on how much private space each sharer uses
• pro-rating the cost of the common space based on how much of the common space each sharer uses, or
• limiting use of common space to tenants who want to pay for its use, and then splitting or pro-rating cost among the users.

You'll also need to discuss how you'll keep the common space clean; what standard of tidiness you want to maintain in the administrative area; how you'll calendar use of the conference room, and how you want the space to look.

Use the Office Sharing Agreement included in this section as a model in doing your own agreement.

Also, check out other Nolo resources on commercial leases, including Negotiate the Best Lease for Your Business , by Janet Portman and Fred Steingold, which explains the standard clauses and provisions of a commercial lease and offers advice for reaching a fair lease agreement with your landlord. Also, eForms are available for download from Nolo's website, on how to create or amend a commercial sublease or get a landlord's written consent to a sublease.

Interested in other resources you can share? Check out Nolo's book The Sharing Solution for ideas and forms on other successful sharing arrangements—from cars to housing to child care and more.