Is it legal to have a sub-lease or contract drawn up after 10 weeks?

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Is it legal to have a sub-lease or contract drawn up after 10 weeks?

The issue is this. I have a lease and have been operating a business in my office for a client. Another business person is also working for the same client, and has space there. I opened the business doors on 01/0111, and now it has occurred to me that I have no contract with this other person. Is it ethical to charge rent to another business in my office?

Asked on March 13, 2011 under Real Estate Law, South Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

1) Can you create a contract or lease after 10 weeks (or any period of time)--yes. There is no law saying that a failure to contract or lease at first precludes doing it later. If you are not charging any rent to this person, then they are not even a tenant, they are a guest; that means that you may at any time (no need to worrry about notice) create a written lease which they have to sign, or even start charging them rent under an oral or verbal lease. You are not generally under any obligation to allow someone to work in your office for free.

2) If there is some agreement however, already in place, between you and the other person, or between you and your client (but which benefits this other person in some way, so that they are third party benefitiary), then you  may be held to that agreement. So, for example, if the client gave you the work with the understanding you'd also let "Bob" work in your space for them, you might be precluded from now charging Bob. So you need to make sure you understand and adhere to any agreements or contracts, even oral or verbal ones, already affectinig the relationship.

3) Besides getting paid for you space, you should have agreements which--

a) Make it clear that "Bob" doesn't work for you; has no authority to bind you or your company; pays his own taxes; has no claim for any employee benefits from you; that you are not liable for anything he does; etc.

b) You want to make sure that Bob provides all his own relevant insurance, including liability and general commercial insurance naming you as one payee; also that he will indemnify you for any costs he causes you.

c) You generally want to make sure you don't leave sensitive, proprietary, confidential etc. information laying around, and may wish some documentation or agreement stating that "Bob" recognizes that all such information of your company is your company's proprietary property and not for his use.

The problem is, unlike most subleases, the fact that you are both working for the same client could make it appear to others (the client; the courts; the tax authorities; the labor dept.) that you and "Bob" are connected in some way; you want to make it clear that you are not.


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