3 FAQs About Your Hot Desk Licence

In Short

• A hot desk licence lets businesses rent out surplus office space to members but requires landlord approval.
• A clear licence agreement should cover fees, access, storage, parking, insurance and termination terms.
• Without proper consent and terms, businesses risk breaching their lease, leading to fines or eviction.

Tips for Businesses
Before setting up a hot desk arrangement, check your lease and get written approval from your landlord. Use a well-drafted licence to protect yourself, covering payment terms, access rights and liability. Ensure your insurance covers third-party use and include clear rules to prevent disputes with members over space, access or responsibilities.

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Table of Contents

• 1. How Does a Hot Desk Licence Work?
• 2. How Do I Start?
• 3. What Events Will Give Rise to Termination?
• Key Takeaways
• Frequently Asked Questions

We are seeing an emerging trend of savvy businesses maximising their commercial office space by offering a co-sharing arrangement between members. This article answers some key questions about hot desk licences and their legal implications. 

1. How Does a Hot Desk Licence Work?

There are two types of businesses that set up a hot desk arrangement open to the public on a membership basis, being:

1. small businesses that have commercial office space bigger than what they need and have the capacity to licence the space; and 
2. businesses set up to license out hot desks to members with a common interest or in the same business industry. For example, they may cater to self-employed contractors in the same industry who want to share common resources and ideas but work independently.

2. How Do I Start?

Importantly, the entity or person named as the tenant under the lease is ultimately liable to the landlord for whatever happens on the premises. As this also includes incidents caused by a third party, you should ensure you have a carefully drafted licence with the appropriate indemnity provisions. Additionally, you should ensure that any insurance required as per the lease covering the premises is kept up to date and effective during the tenancy period. 

Once you get the landlord’s written consent, you need to think about how you want to set up your hot desk licence. Some important issues to consider are:

• the membership fee, how it will be paid and how it will be increased; 
• inclusions in the membership package, such as a designated or random desk; 
• the location of the designated space and any boundaries in the lease; 
• whether membership will be tiered and the exclusive benefits of each level; 
• terms and conditions regulating issues like download restrictions and use of common areas and any facilities forming part of those areas;
• the provision of lockers or storage areas; 
• any car parking spaces and whether there is a car parking licence that governs the use of the car park; 
• access hours and methods of access, such as keys or access cards; 
• release provisions for unforeseen circumstances such as theft or loss of data due to internet connection; 
• insurance; and 
• members’ security deposits during the term of their licence. 

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3. What Events Will Give Rise to Termination?

The actual hot desk licence will address most of the above issues and also have a terms and conditions document annexed to the licence or on the licensor’s website.

The hot desk licence will also set out the termination events. Termination events are usually due to a breach, mutual agreement or other reason as stated in the agreement. It is important to put in a disclaimer that termination for the reasons listed does not give rise to a claim for compensation.

Breaches could include:

• members not using the hot desk area or premises for the correct permitted use;
• carrying on any business that is not permitted by law; or
• member payments or rent payments falling past their due date. 

Key Takeaways

Hot desk licences allow businesses to maximise office space by licensing desks to members. Before setting up, check the lease and obtain landlord consent. A well-drafted licence should outline:

• fees; 
• membership inclusion; 
• access hours; 
• storage; 
• parking; 
• insurance; and 
• liability provisions. 

It should also specify termination events, such as non-payment, unauthorised use or legal breaches. The licence must comply with lease terms to avoid penalties or termination. Businesses should ensure insurance is current and indemnity clauses protect them from third-party incidents. Getting landlord approval before drafting the agreement ensures compliance and avoids disputes over unauthorised licensing arrangements.

If you are entering into a commercial lease, our experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions