Key Questions to Ask Before Renting a Managed Office

Before relocating to a managed office, it is essential to comprehend the licence agreement, particularly since it functions differently from a conventional lease. For instance, while a leased office demands a legally binding lease, a managed office utilises a licence agreement. That is why it is vital to understand how licence agreements operate and what to inquire about before signing one.

This blog post targets entrepreneurs, business owners, and office managers who need a thorough understanding of licence agreements and what to ask a managed office provider.

Understanding the Terms of Your Managed Office Licence Agreement

Licence Terms and Duration

A licence agreement is issued by the managed or serviced office provider (at Wrest Park Business Centre, we use both terms interchangeably). It details various aspects, including the duration of the agreement.

Brief agreements may span an initial period of 1 to 3 months, followed by a short notice period of 1 month. An extended agreement may outline a duration of 6 to 24 months. Licence periods seldom exceed 2 years.

Flexibility vs Legal Rights

Compared to a 5-year office lease term, significantly shorter periods under ‘licences to occupy’ provide considerable flexibility for businesses uncertain about their future requirements. Nevertheless, this decreased commitment does not grant a ‘right to exclusive possession’. This means that, unless agreed otherwise, businesses cannot make major changes to the office or building for branding purposes.

Licences end upon the sale of the building by the landlord, unlike office leases, which offer tenants additional rights and protections.

Key Considerations Before You Sign

What should you inquire about before signing a managed office licence agreement? The adaptability of the agreement to either extend or terminate it early is vital. Extra or concealed costs, including service charges or other expenses beyond the monthly fee, are essential questions to address upfront. Avoid any surprises!

Examining the licence agreement terms, down to reviewing each clause, is relevant. A licence fee may be an all-in cost, or other expenses and additional charges fall outside of it. For instance, utilities, internet access, and office maintenance can be extra costs.

Costs and Payments

Initial deposits or advance payments are commonly required with a licence agreement. This could be 1 or 3 months, depending on the type of agreement.

Various workspace providers demand different one-time setup fees. This encompasses phone line connections, internet access, and the provision of swipe cards for secure building access, among other services.

The monthly licence fee determines the cost and what gets included in the fee. The acceptable payment methods also require confirmation.

Late payment policies outline what penalties the licensee faces. The licence agreement should also specify any long-term consequences for regular payment delays.

Office Space and Amenities Offered

The office space, configuration, and size must satisfy your current and projected needs. Indeed, it remains possible to occupy a second office for overflow or relocate to a larger managed office later to accommodate additional staff.

For example, Wrest Park Business Centre offers 157 managed offices across 3 business centres, with sizes ranging from 2 to 40 desks, all set within our beautiful parkland setting.

An agreement might include business amenities, such as access to a kitchen, reception, lounge areas, boardrooms, training rooms, or meeting rooms. Multiple spaces are likely communal, whereas others, such as meeting rooms or boardrooms, are often bookable for an additional cost per session or day.

Technology provision and IT support services are frequently included as well. Services such as Ethernet or Wi-Fi internet delivery to the office, along with related IT support services, are covered under the terms of the agreement. The internet speed might be mentioned, but outside of a fixed-speed leased line, it depends on the service quality assurances from the ISP.

Location and Accessibility

Address and Essential Services: the office location is significant. Staff must be able to reach it without an extended commute. Is the road network nearby efficient or typically congested? Are there reliable public transport options? Other useful services include banks, convenience stores, and local supermarkets.

Accessibility for Clients and Employees: are there enough complimentary parking spaces available? Are there bike racks to secure bicycles? Are there electric vehicle (EV) chargers available? Wrest Park Business Centre features 4 EV charging points, plus over 400 parking spaces for cars and bicycles.

Neighbourhood Reputation and Safety: how secure is the area surrounding the business centre? Are security measures in place, like key fobs or swipe card systems, to prevent unauthorised building access?

Legal Considerations and Compliance

Who handles insurance responsibilities? Different types of business insurance are available, including employer liability and public liability insurance. Does the licensor cover these under their policy, or must the tenant arrange separate policies?

Business rates, local ordinances, and other regulations may be relevant. The licensor must clarify this.

Subletting policies are clarified, too. The ability to sublet part of a rented office is rarely an option in a licence agreement. Even with a leased office, subletting is not automatic.

Termination Clauses

Notice Periods – as part of the right to terminate, a notice period is required. The agreement specifies the amount of time needed to notify the managed office provider before moving out. The requirements for terminating the agreement must be outlined.

Early Termination – this remains feasible under specific circumstances. Financial penalties and additional charges typically accompany premature licence termination.

Office Condition and Restoration – returning the office to its original condition is mandatory under the licence terms. Should tenants fail to complete restoration requirements, these costs will be invoiced separately.

Renewal Options and Conditions

The right to use and renew a licence agreement depends on how flexible the document is. Some renewals may include rental increases, such as yearly uplifts for inflation, based on official UK CPI or RPI rates.

To support local businesses, the managed office provider often gives priority to existing tenants. This includes office expansion and additional amenities.

Expectations should be set regarding renewal timelines, administrative processing, and communication methods.

The Wrest Park Advantage

Operating from Wrest Park Business Centre delivers distinct advantages that elevate your business operations. Our magnificent 90-acre parkland environment creates an inspiring workspace that naturally enhances productivity and employee wellbeing. This unique heritage setting within the historic Wrest Park estate provides a prestigious business address while maintaining cost-effective operational expenses.

The strategic location offers exceptional connectivity, positioned just 45 minutes from London via Thameslink and 15 minutes from both the M1 and A1 networks. This accessibility enables businesses to maintain strong links with major commercial centres while benefiting from a peaceful, distraction-free environment.

Our comprehensive service model eliminates the administrative burden typically associated with office management. All utilities, maintenance, security, and facilities management are handled seamlessly, allowing leadership teams to concentrate entirely on core business activities.

What to Consider

While Wrest Park Business Centre offers exceptional value and flexibility, several factors warrant careful evaluation before committing. The parkland location, although beneficial for productivity and wellbeing, may present challenges for businesses requiring frequent access to the urban centre or those heavily dependent on walk-in customer traffic.

Consider your team’s commuting patterns and preferences. While public transport links are available through Flitwick station and local bus routes, some staff members may find rural locations less convenient than city centre alternatives.

Financial planning should account for potential fluctuations in licence fees during renewal periods, particularly given the premium nature of the location and amenities offered. While transparent pricing eliminates hidden costs, budget for potential annual increases linked to inflation indices.

Additional Services and Hidden Costs

Additional services, including mail handling, printing, and access to certain office equipment, are outlined in the agreement.

Hidden costs are found within some licences in vague terms and unusual references. Clarify these to avoid unexpected expenditures. Wrest Park Business Centre maintains transparent pricing with no hidden expenses in its agreements.

Service charges, including management fees, business rates, levies, and other miscellaneous costs, are relevant concerns. These often relate to the specific location or services used.

How does the Wrest Park Business Centre’s managed office licence agreement compare? We offer highly competitive licence rental terms for our clients. Please contact us to discuss your office needs and to book a tour of our business centre.