Looking for a work space with a limited budget? Ever considered a licence agreement? There is a big difference with a rental agreement, but it might be the solution you’re looking for. Both have their advantages and disadvantages. Here is a rundown of the differences between the two options.
What is a rental agreement?
When you rent a space, you enter a contract that grants you exclusive usage of the premises in question for a predetermined amount of time. It means you enter into a legal relationship as a tenant to your landlord, who is required to provide you with exclusive possession of the property. There must be a fixed term for the rental, and a set periodic rent (which will almost always be at market rate).
The primary advantage of renting is the exclusive use of the property. This means the landlord will not be able to interfere with your business throughout the fixed term of the rental agreement. It also means you are secure in your occupancy of that space for the predetermined amount of time, so you don’t have to worry about potentially having to change location unexpectedly.
You may want a short-term or more flexible arrangement in case your business grows, and a fixed lease may be inhibiting in this instance. Rental agreements often require you to maintain the property, and the rent payments can be quite high, particularly for a fledgeling startup.