Does a shared workspace agreement create a tenancy or sublease under Australian law?

No. A properly drafted shared workspace agreement creates a licence, not a tenancy or sublease. The critical distinction in Australian property law is exclusive possession: a tenant has the right to exclude everyone — including the landlord — from the premises, whereas a licensee does not. In a shared workspace arrangement, the primary tenant retains overall control and direction of the premises, staff move around, and other parties access the space, so there is no exclusive possession and therefore no tenancy. This distinction is important because residential and retail tenancy legislation in each state and territory (such as the Retail Leases Act 2003 (VIC) or the Retail and Commercial Leases Act 1995 (SA)) does not apply to licence arrangements. If your arrangement is structured so that the co-occupant effectively has exclusive possession of a defined area, a court may find that a sublease has been created, which could breach the head lease.

What happens to the shared workspace agreement if the primary tenant's head lease is terminated?

A licence granted by the primary tenant is derived from and dependent upon the primary tenant's own rights under the head lease. If the head lease is terminated — whether by expiry, forfeiture, surrender, or landlord's notice — the primary tenant's authority to grant licences over the premises ceases, and the co-occupant's licence also terminates. The co-occupant will generally not have any rights against the head landlord and must vacate the premises. For this reason, the shared workspace agreement should expressly address what happens on termination of the head lease, including any obligation to refund prepaid licence fees, and the co-occupant should understand this risk before entering the arrangement. Some head leases also require the landlord's prior written consent before any sub-occupancy arrangements are put in place — check the head lease carefully.

How should outgoings be split between businesses sharing office space in Australia?

Shared outgoings in an office-sharing arrangement typically include electricity, gas, internet and telecommunications, professional office cleaning, shared consumables (coffee, printer paper, stationery), and sometimes building management levies if passed through by the head landlord. The most common approach is to split outgoings by headcount — the number of workstations or personnel each business occupies as a proportion of total occupancy. For example, if the co-occupant has 3 of 10 workstations, it pays 30% of shared outgoings. Other approaches include splitting by floor area or by mutual agreement on a fixed monthly contribution. The agreement should specify how outgoings are calculated, invoiced, and verified, and should address what happens if outgoings vary significantly.

Does a shared workspace agreement need to address GST?

Yes. The supply of a right to occupy commercial premises in Australia is generally a taxable supply under the A New Tax System (Goods and Services Tax) Act 1999 (Cth), attracting GST at 10%, where the primary tenant is registered for GST. The primary tenant must issue a valid tax invoice that includes their ABN and clearly states whether the licence fee is inclusive or exclusive of GST. Residential rent is GST-free under s 40-35 of the GST Act, but commercial workspace licences are not residential rent and GST generally applies. Both parties should confirm their GST registration status with their accountant or tax adviser.

What confidentiality obligations arise when two businesses share an office?

When two businesses share an open-plan office or workspace, each business is inevitably exposed to the other's confidential information — including client calls, business plans, pricing discussions, financial data, and personnel matters. This exposure creates real legal risk: without a confidentiality clause, there is no clear contractual remedy if one business misuses the other's information. The shared workspace agreement should include a mutual confidentiality obligation that defines what constitutes confidential information, restricts its use and disclosure, and survives termination of the agreement. Each business should also consider the practical steps needed to protect sensitive information, such as using private rooms for confidential calls, password-protecting screens, and restricting access to shared printers for sensitive documents.

Shared Workspace Agreement (Australia) — Australia

A professionally drafted Shared Workspace Agreement for Australian businesses that share office or commercial premises. Covers the grant of a non-exclusive licence to occupy a defined area, monthly licence fees and GST treatment, proportionate sharing of outgoings (electricity, internet, cleaning), workspace conduct and noise policies, cleaning rosters, confidentiality obligations between co-occupants, public liability insurance requirements, and termination rights. Compliant with Australian Consumer Law and the common law of contract. Suitable for businesses of all sizes sharing office space, co-working environments, serviced offices, and multi-tenant commercial premises across all Australian states and territories.

What Is a Shared Workspace Agreement (Australia)?

A Shared Workspace Agreement is a written contract between a primary tenant (the business that holds the head lease or licence over commercial premises) and a co-occupant (another business that pays to share that space). In Australia, this type of arrangement is governed by the law of contract and the Australian Consumer Law (ACL), and is structured as a licence rather than a sublease to avoid the regulatory complexity of state and territory retail and commercial tenancy legislation.

The legal distinction between a licence and a tenancy is critical in Australian property law. A tenancy — whether commercial or residential — grants the tenant exclusive possession of a defined area. This means the tenant can exclude all others, including the landlord, from that space. A licence, by contrast, grants only a permission to use premises that remain under the overall control of the licensor (the primary tenant). In a shared workspace arrangement, both parties move around common areas, share facilities, and have no exclusive possession of any specific space, which means a licence is the appropriate legal structure.

The primary legislation relevant to shared workspace agreements in Australia includes the Competition and Consumer Act 2010 (Cth) and the Australian Consumer Law, which implies mandatory consumer guarantees into service arrangements; the A New Tax System (Goods and Services Tax) Act 1999 (Cth), which governs the GST treatment of the licence fee; and the Privacy Act 1988 (Cth) and Australian Privacy Principles, which govern how personal information exchanged between co-occupants must be handled.

In each state and territory, commercial and retail tenancy legislation — such as the Retail Leases Act 2003 (VIC), the Retail and Commercial Leases Act 1995 (SA), the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), and equivalent Acts — may apply if the arrangement is found to create a tenancy with exclusive possession. By structuring the arrangement as a licence, the parties generally avoid these Acts, which carry mandatory disclosure obligations, minimum term requirements, and landlord liability provisions that would be impractical in an office-sharing context.

When Do You Need a Shared Workspace Agreement (Australia)?

A Shared Workspace Agreement is needed whenever one Australian business allows another business to use part of its office, studio, warehouse, or commercial premises on an ongoing or recurring basis. This is increasingly common as businesses seek to reduce overhead costs, optimise underutilised space, and create collaborative working environments without the commitment of separate commercial leases.

You should use a Shared Workspace Agreement when: a business occupies a large office and wants to sublet desks or rooms to freelancers, startups, or complementary businesses; a professional services firm shares space with another firm — for example, an accounting practice sharing premises with a mortgage broking business; creative studios or tech companies want to house a satellite team, incubator resident, or partner business within their space; a company is downsizing and wants to offset lease costs by accommodating a smaller business; or two businesses launch a joint project and want to share a temporary project office.

A written agreement is essential in all of these situations because it clearly establishes the terms of the arrangement from the outset, reduces the risk of disputes over cost allocation, access, conduct, and exit, and protects the primary tenant's head lease (by ensuring the co-occupant's conduct cannot breach the head lease conditions). Without a written agreement, the parties must rely on oral discussions and implied terms, which are difficult and expensive to enforce.

The agreement is also important for tax purposes: a valid tax invoice for the licence fee allows the co-occupant to claim GST input tax credits on its fee payment, and documents the commercial basis of the arrangement for income tax purposes.

What to Include in Your Shared Workspace Agreement (Australia)

A well-drafted Australian Shared Workspace Agreement should contain the following key provisions.

Licence structure and premises description — Clearly identify the nature of the arrangement as a licence (not a tenancy or sublease), and describe with precision the specific area, workstations, or rooms allocated to the co-occupant, as well as the common areas that both parties may use. A floor plan attachment is strongly recommended for larger premises.

Licence fee, GST, and outgoings — State the monthly licence fee, whether it is inclusive or exclusive of GST, and the proportion of shared outgoings (electricity, internet, cleaning, consumables) allocated to the co-occupant. Specify how outgoings will be invoiced and verified, and include a reasonable annual review mechanism tied to CPI or a fixed percentage.

Payment terms and late payment — Specify the due date for monthly payments, the method of payment, and the consequences of late payment, including interest charges and the primary tenant's right to suspend access for non-payment.

Term and termination — State the initial term, what happens on expiry (month-to-month or automatic renewal), and the notice period required to terminate. Include immediate termination rights for material breach and address what happens if the head lease is terminated.

Workspace conduct and house rules — Document the agreed noise policy, conduct standards, cleaning responsibilities, and any specific rules about client visits, kitchen use, meeting room booking, and building security. These practical rules prevent the most common sources of co-occupancy friction.

Confidentiality — Include a mutual confidentiality clause that survives termination, covering business information, client details, and any intellectual property that either party may inadvertently expose during shared occupancy.

Insurance — Require each party to maintain public liability insurance at a minimum of $10 million per occurrence and to produce certificates of currency on request. The co-occupant should also insure its own property and equipment.

Governing law — Select the state or territory whose law governs the agreement, typically the state where the premises are located.

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