Virtual Offices and Executive Suites

Virtual offices and executive suites provide a fantastic alternative for business owners who want the trappings of an office without the significant overhead.  As beneficial as these arrangements are, they can leave clients high and dry if the virtual office owner stops paying rent.

There are three rungs on this particular ladder:

Building Owner

Virtual Office/Executive Suite Owner (VOO)

Virtual Office/Executive Suite Client (VOC)

The VOO rents space from the building owner and their relationship will be set forth in a lease agreement.  Similarly, the VOC rents space from the VOO and their relationship is set forth in a lease or license agreement.  Things get tricky when the VOO stops paying rent and the building owner evicts the VOCs.  Unless a VOC’s lease agreement with the VOO says otherwise, the building owner owes the VOC no duties as the subtenant and the VOC is SOL.

If you’re a VOC, it’s important to read your lease agreement carefully to see what happens if the VOO stops paying its rent despite collecting rent from the VOCs.  Ideally, you should ask to read the lease agreement between the VOO and the building owner, which likely explains what obligations, if any, the building owner has toward the subtenants.  Keep in mind if you are kicked out of your virtual office, changing your address with the state, any business license bureaus, department of taxation, and the IRS can be an expensive proposition.  

If you’ve found yourself in a situation where your VOO has left town and your office is locked, you may be able to appeal to the building owner to unlock the doors long enough for you to retrieve your belongings.  If you haven’t found yourself in this situation, it might be a good idea to set aside the fees you’ll need to change your address, just in case.