Coworking Space Disputes: Membership Cancellations, Access Denials, and Refund Demands
The coworking industry exploded over the past decade, promising flexibility, community, and cost savings for freelancers, startups, and remote teams. WeWork’s spectacular collapse exposed the fragility of the business model, but the underlying demand for flexible workspace remains strong. Today’s coworking landscape includes everything from global chains like Regus and IWG to boutique local spaces targeting specific industries.
The problem is that most coworking memberships exist in a legal gray area between a lease, a license, and a service contract. This ambiguity creates serious problems when disputes arise. I’ve represented clients in dozens of coworking disputes over the years, and I’ve seen operators take advantage of this confusion to deny refunds, lock members out without notice, and enforce one-sided contract terms that would never fly in a traditional commercial lease.
This article breaks down the most common coworking disputes, explains your legal rights under California and general contract law, and provides practical guidance on when and how to use demand letters to resolve these conflicts without litigation. Whether you’re fighting for a refund after COVID-19 emptied your office, dealing with an access denial that’s killing your business, or trying to escape a predatory long-term commitment, understanding the legal framework is the first step toward resolution.
Understanding Coworking Agreements: Lease, License, or Service Contract?
The single biggest source of confusion in coworking disputes is that most members don’t understand what type of legal relationship they’ve actually entered. The coworking operator will call it a “membership” or “license agreement,” but the legal classification determines your rights, remedies, and leverage in any dispute.
A traditional commercial lease creates a landlord-tenant relationship with statutory protections, notice requirements, and procedural safeguards. California’s Commercial Tenant Protection laws, for example, require specific notice periods before eviction and limit a landlord’s ability to terminate without cause. If your coworking agreement creates a lease, you have these protections.
A license agreement, by contrast, is more like permission to use someone else’s property. Think of it like a gym membership or parking pass. The operator retains much more control, can typically terminate with less notice, and you have fewer procedural protections against removal. Most coworking agreements are structured as licenses specifically to avoid tenant protections.
Then there’s the service contract element. Many coworking agreements promise specific services beyond just space: high-speed internet, printing credits, conference room access, mail handling, community events, cleaning, coffee and snacks. When the operator fails to provide these services, you’re not just dealing with a space issue but a breach of service contract. This distinction matters because service contract breaches give you different remedies than lease violations.
The reality is that most coworking agreements are hybrids. They have elements of all three. Courts will look at the actual relationship, not just what the document calls itself. If you have a dedicated desk that you pay for monthly and you’re the only one who uses it, that starts to look more like a lease than a license. If you have a private office with your own lock and key, even more so. But if you’re in a hot-desking arrangement where anyone can sit anywhere, that’s clearly a license.
Why does this matter for your demand letter? Because it determines which laws apply, what remedies you can seek, and what leverage you have. If you can argue that your arrangement is more like a lease than a license, you gain access to statutory protections. If it’s clearly a service contract and they’ve breached service obligations, you can demand refunds or contract rescission. Understanding the nature of your legal relationship is the foundation of an effective demand strategy.
Common Coworking Disputes and How They Arise
After representing clients in coworking disputes since 2015, I’ve seen certain patterns repeat. Understanding these common scenarios helps you recognize when you have a viable claim and what type of demand letter strategy will work best.
Sudden Access Denials and Lockouts
This is the nightmare scenario. You show up to work one morning and your access card doesn’t work. No warning. No explanation. Just locked out with your laptop, files, and sometimes inventory or equipment trapped inside. I’ve had clients literally locked out mid-project with client deliverables due the next day.
Coworking operators usually claim they have the right to immediate termination under the agreement. And unfortunately, many coworking contracts do include language allowing termination “at any time for any reason with X days notice.” But notice is the key word. Even with broad termination rights, they typically need to give you notice, not just lock you out.
The trigger for sudden lockouts is usually one of three things: payment disputes (they claim you’re behind, even if you’re not), alleged policy violations (noise complaints, harassment allegations, using the space for prohibited purposes), or business distress (the operator is going under and just shutting everyone out). In the third scenario, you’re often dealing with a business that won’t be around long enough to respond to a demand letter, which changes your strategy entirely.
When access denial happens without proper notice, you potentially have claims for breach of contract, conversion (if they’re holding your property), and in California, potentially a violation of the covenant of quiet enjoyment even in a license arrangement. Your demand letter needs to address the immediate harm (lost business, client relationships, inability to access your property) and demand both reinstatement of access and compensation for damages.
COVID-19 and Impossibility of Use
The pandemic created an unprecedented wave of coworking disputes. Government shutdown orders made it literally illegal to go to the office, yet many coworking operators continued charging full price and refused refunds. Some operators eventually offered credits or discounts, but the initial response from most was “you still owe the full amount.”
The legal question is whether government shutdown orders created impossibility of performance or frustration of purpose that would excuse your continued payment obligations. In California, when a government order makes it impossible for one party to perform their obligations, the contract may be void or voidable under Civil Code Section 1511. The coworking operator’s obligation is to provide you with accessible workspace. If the government says you can’t legally go there, they can’t perform.
Many operators tried to argue that they offered virtual services (online communities, video backgrounds, mail forwarding) that continued during shutdowns, so you were still getting value. This argument fails when the core value of the membership is physical space access. Virtual services might be nice perks, but they don’t substitute for what you actually paid for.
The frustration of purpose doctrine is equally powerful. Even if it was technically possible for you to access the space (maybe you were an essential business), if the entire purpose of your membership was to collaborate with other members, hold client meetings, or maintain a professional business address, and government restrictions destroyed that purpose, you may have grounds for contract rescission or at least proportional refunds.
Most COVID-19 coworking disputes are now resolved, but the legal principles remain relevant for future force majeure events. The key lesson is that “act of God” clauses in coworking agreements typically excuse the operator from liability for things beyond their control, but they don’t automatically excuse your obligation to keep paying when the operator can’t deliver the promised service.
Overselling and Unavailable Amenities
False advertising is rampant in coworking. The glossy website shows beautiful conference rooms, phone booths for private calls, high-speed internet, printing services, and stocked kitchens. You sign up expecting professional amenities. Then you discover that the conference rooms are always booked by the operator’s other businesses, the internet constantly fails during video calls, the printer has been broken for three months, and the kitchen ran out of coffee in 2019.
This is classic breach of contract. The operator made specific promises about available services and amenities. You paid based on those promises. They failed to deliver. The challenge in a demand letter is quantifying your damages. You can’t usually claim the full amount you’ve paid because you did receive some value from the space itself. But you can demand a refund representing the value of the missing amenities.
One approach is to price out what those amenities would cost separately. If the agreement included 10 hours of conference room time per month and conference rooms rent for $50/hour in your market, you can claim $500/month in undelivered value. If the high-speed internet was a core selling point and you had to get a separate hotspot costing $80/month, claim that back. Add it up across the term of your membership and you often reach substantial numbers.
The other approach is contract rescission. If the amenities were material inducements for your membership and the operator fraudulently represented their availability, you may be entitled to full rescission, getting all your money back and canceling the agreement without penalty. This is a higher bar to clear because you need to show that the misrepresentations were significant enough that you wouldn’t have entered the agreement at all if you’d known the truth.
Phantom Charges and Fee Creep
This one drives clients crazy. You sign up for a $500/month membership with clearly stated terms. Then the bills start coming with extra charges: $25 “community fee,” $40 “technology upgrade surcharge,” $15 “enhanced cleaning fee,” $30 for printing you didn’t use. Suddenly you’re paying $610/month and nobody told you about these additional fees upfront.
California’s Consumer Legal Remedies Act provides some protection against deceptive pricing practices, though it’s unclear whether B2B coworking agreements qualify as “consumer” transactions. Even without CLRA, basic contract law requires that fees be authorized by the agreement or clearly disclosed in advance. If the original agreement doesn’t mention these fees and you never consented to them, you can dispute them.
The operator will usually point to fine print language allowing them to “modify fees from time to time” or “charge for additional services as provided.” But modification clauses have limits. They can’t unilaterally change material terms without notice and consent. If your base membership price increases from $500 to $610 through added fees, that’s a material change requiring proper notice and your agreement to the new terms.
Your demand letter should identify each unauthorized charge, state the total amount improperly billed, and demand either immediate refund or removal from future bills. If you’ve already paid disputed amounts, you’re entitled to reimbursement. If they threaten to lock you out over non-payment of disputed charges, that’s a separate breach because they can’t enforce payment of amounts not actually owed under the contract.
Early Termination Penalties and Contract Traps
Coworking markets itself on flexibility, but many agreements lock you into 6-month, 12-month, or even 24-month commitments with brutal early termination penalties. I’ve seen contracts requiring payment of 100% of remaining fees if you leave early. That’s not a penalty for early termination; that’s just paying for the entire term whether you use it or not, which defeats the entire point of “flexibility.”
California law does limit penalties in commercial contracts. While the rules are more permissive than in consumer contexts, a penalty clause that’s grossly disproportionate to actual damages may be unenforceable. If the coworking operator has a waitlist for spaces and can immediately re-rent your desk to someone else, what damages did they actually suffer from your early departure? Probably none. Yet they’re demanding thousands in penalties.
The key is distinguishing between a legitimate liquidated damages clause and an unenforceable penalty. Liquidated damages are permissible when actual damages would be difficult to calculate and the agreed amount is a reasonable estimate of probable damages at contract formation. A penalty is a sum disproportionate to any actual loss, designed purely to coerce performance through fear of excessive charges.
A reasonable early termination fee might be 2-3 months of membership fees plus actual costs of re-renting the space. This compensates the operator for lost revenue while they find a replacement and covers administrative costs. A fee equal to 100% of remaining term fees is almost certainly an unenforceable penalty unless the operator can prove they suffered damages equal to that amount.
Your demand letter should challenge the penalty clause, offer to pay reasonable liquidated damages that reflect actual harm, and assert that enforcement of the excessive penalty would be unconscionable and void under California law. Many operators will back down when faced with articulate legal arguments because they know their penalties won’t hold up in court.
Deposit and Credit Disputes
Most coworking agreements require security deposits, often equal to one month’s membership fee. Like residential security deposits, these are supposed to be held in trust and returned when you leave, minus any legitimate deductions for damages. In practice, many operators treat security deposits as additional revenue and find creative reasons to keep them.
Common bogus deduction claims include “excessive wear and tear” (on a desk you shared with 10 other people), “cleaning fees” (for a space that was already dirty), “administrative costs” (which are normal business expenses), and “unpaid charges” (that were actually disputed). California’s security deposit law doesn’t directly apply to commercial licenses, but the underlying principles do. A security deposit can only be used for actual damages caused by the tenant/licensee beyond normal wear and tear.
The burden is on the operator to prove that deductions are legitimate. They need to provide itemized statements showing what they’re deducting and why. They need to be able to show that you specifically caused the damage. If they can’t provide documentation, the deductions fail.
Some operators try to convert your security deposit into a “credit” toward future membership, then refuse to refund it when you want to leave. This is breach of contract. A security deposit is not store credit. It’s your money, held temporarily as security, and refundable when you leave (minus legitimate deductions). They can’t unilaterally convert it into non-refundable credit.
Your demand letter needs to request itemized accounting of all deductions, challenge any improper charges, and demand return of the full deposit (or undisputed portion) within a specific timeframe. In California, while commercial deposit law is less strict than residential, unreasonable withholding of deposits may still support claims for conversion or breach of the implied covenant of good faith and fair dealing.
Your Legal Rights in Coworking Disputes
Understanding your substantive legal rights is critical before drafting a demand letter. Many coworking members assume they have no recourse because they signed an agreement giving the operator broad discretion. But contract clauses have limits, and certain rights exist regardless of what the contract says.
The Implied Covenant of Good Faith and Fair Dealing
Every contract in California includes an implied covenant that neither party will do anything to unfairly frustrate the other party’s right to receive the benefits of the contract. This isn’t explicitly written in your coworking agreement, but it’s automatically part of the deal under California law. The covenant prevents parties from acting in bad faith even when the contract gives them discretion.
For example, if your coworking agreement says the operator can terminate “at any time for any reason with 30 days notice,” they still can’t exercise that right in bad faith. If they terminate you specifically because you complained about safety violations, that’s bad faith retaliation. If they terminate you to avoid having to provide services they promised, that’s bad faith. If they terminate you because they want to give your office to their friend, that’s potentially bad faith.
The covenant also prevents operators from exploiting gaps or ambiguities in the contract to your detriment. If the agreement is silent about parking and you’ve always parked in the building lot, they can’t suddenly start charging you $200/month or towing your car without notice. There’s an implied understanding that parking was included as part of the overall deal.
Courts are more likely to find good faith violations when one party has significantly more bargaining power, the contract is an adhesion contract (take-it-or-leave-it with no negotiation), and the conduct is particularly egregious. All three factors typically exist in coworking memberships. The operator drafts the form contract, you have little ability to negotiate terms, and there’s massive power imbalance. This strengthens your good faith arguments.
Unconscionability and Adhesion Contracts
Most coworking agreements are contracts of adhesion: standardized forms drafted by the stronger party, presented on a take-it-or-leave-it basis with no meaningful opportunity to negotiate. California courts will sometimes refuse to enforce unconscionable terms in adhesion contracts, particularly when there’s both procedural unconscionability (unfair process in contract formation) and substantive unconscionability (unfair terms).
Procedural unconscionability includes things like hidden terms in fine print, complex legal language that obscures meaning, high-pressure sales tactics, and refusal to provide time to review the agreement with counsel. Many coworking sales processes exhibit these characteristics. You sign up online with a few clicks, never read the full terms and conditions, and don’t realize what you’ve agreed to until there’s a problem.
Substantive unconscionability means the terms themselves are unreasonably one-sided. Examples include clauses that allow the operator to change any term at any time without notice, provisions that eliminate all of your remedies for breach, terms that require you to waive all legal claims, and penalties that are grotesquely excessive compared to actual damages.
To challenge a contract provision as unconscionable, you need to show both types of unconscionability. The more severe the substantive unconscionability, the less procedural unconscionability is required, and vice versa. If a coworking contract includes a clause saying “Member waives all claims for any breach of this agreement and agrees operator has no liability for any failure to provide services,” that’s extremely substantively unconscionable. Combined with even mild procedural unconscionability (fine print, no negotiation opportunity), a court might refuse to enforce it.
Your demand letter can assert that specific contract provisions are unconscionable and therefore unenforceable. This is most effective for penalty clauses, liability waivers, and provisions that eliminate your legal remedies. Frame it as both a legal argument and a practical one: enforcing unconscionable terms would be bad policy and courts won’t do it, so the operator should recognize reality and negotiate a fair resolution.
California’s Consumer Protection Laws
Whether coworking agreements qualify as “consumer” transactions under California’s consumer protection statutes is an open question. The Consumer Legal Remedies Act (CLRA) and Unfair Competition Law (UCL) technically apply to transactions for “goods or services for personal, family, or household purposes.” Coworking is typically for business purposes, which suggests these statutes don’t apply.
However, the line is blurrier than it seems. Many coworking members are solopreneurs, freelancers, and single-person businesses. They’re not large commercial enterprises; they’re individuals trying to make a living. Courts sometimes extend consumer protection laws to small business transactions when the individual is in a similar position to a consumer: limited resources, no bargaining power, and vulnerability to unfair practices.
The UCL has particularly broad application because it prohibits any “unlawful, unfair, or fraudulent” business practice. Even if the CLRA doesn’t apply, UCL might. If the coworking operator engages in practices that violate other laws (false advertising, breach of contract, fraud), or practices that are unfair or against public policy, UCL provides a potential claim even in a commercial context.
Asserting consumer protection law violations in your demand letter serves multiple purposes. First, these statutes often include penalties and attorney fee provisions, which increases pressure on the operator to settle. Second, they frame the dispute as not just a contract breach but a pattern of unfair practices affecting many members, which has reputational implications for the operator. Third, they signal that you understand the legal landscape and are prepared to pursue all available remedies.
Duty to Mitigate and Mitigation Credits
If you leave a coworking space early and the operator claims damages, they have a legal duty to mitigate their losses by making reasonable efforts to re-rent the space. They can’t just let your desk sit empty for six months while collecting penalty fees from you. California law requires mitigation in commercial lease contexts, and the principle likely extends to coworking licenses.
This creates leverage in early termination disputes. If the operator has a waitlist for spaces, their damages should be minimal or zero because they can immediately re-rent. If they’ve already re-rented your space to someone else, they definitely can’t collect full penalties from you while also collecting rent from your replacement. That’s double recovery and not allowed.
Your demand letter should explicitly put the burden on the operator to demonstrate their mitigation efforts. Ask: Did you advertise the space? What efforts did you make to find a replacement? When was the space re-rented? If they re-rented it two weeks after you left but they’re still claiming three months of penalty fees, you have a strong argument that most of those charges are unjustified.
Sometimes operators will claim that mitigation doesn’t apply because the agreement includes a liquidated damages clause. This is partially true: a valid liquidated damages provision can eliminate the duty to mitigate because the damages are pre-agreed. But if the liquidated damages are actually an unenforceable penalty, then the duty to mitigate comes back into play. You’re arguing in the alternative: either the liquidated damages clause is unenforceable as a penalty, in which case you owe only actual damages (which require mitigation), or the clause is enforceable but the amount must be reduced to reflect actual damages (which again requires proof of mitigation efforts).
When to Send a Demand Letter vs. Other Options
Not every coworking dispute requires a formal demand letter. Sometimes a simple email or phone call resolves the issue. Other times, a demand letter is useless and you should skip straight to small claims court. Understanding when demand letters are the right tool helps you avoid wasting time and money.
Situations Where Demand Letters Work Best
Demand letters are most effective when the operator is still in business, has some concern for reputation, and the amount in dispute is significant enough to matter but not so large that litigation is inevitable. Think disputes in the $2,000-$20,000 range. Below $2,000, a simple email might work just as well. Above $20,000, the operator may assume you’ll sue regardless, so the demand letter is just a procedural step.
Demand letters also work well when you have clear documentary evidence of breach. If the coworking agreement promises specific amenities and they’re not providing them, that’s straightforward breach. If they charged you fees not authorized by the contract, same thing. Clear breaches with clean documentation are easier to resolve through demand letters because the operator knows they’ll lose if it goes to court.
Another good scenario is when you’re still in the space and want to resolve the dispute without leaving. Maybe they’re not providing promised services, but the location works for your business and you want to stay if they’ll fix the problems or reduce your fees. A demand letter can frame the issue as “here’s what’s wrong, here’s what I need you to do, and if you do it we can continue the relationship.”
Finally, demand letters are valuable when you want to create a paper trail for potential future litigation. Even if you don’t expect the operator to immediately cave, documenting your position, giving them notice of claimed breaches, and establishing that you tried to resolve things amicably all strengthen your legal position if you do end up in court. Judges like to see that parties attempted good-faith negotiation before filing suit.
When to Skip the Demand Letter
If the operator is clearly going out of business and shutting down locations, a demand letter is often useless. They don’t have money to pay refunds and they don’t care about legal threats. You’re better off immediately filing claims with relevant authorities (Department of Consumer Affairs if applicable, Attorney General consumer protection division) and considering whether there are any personal guarantees or parent company liability you can pursue.
Similarly, if the operator has a pattern of ignoring demand letters and forcing everyone into litigation, you might as well skip ahead. Some coworking chains have litigation departments that automatically reject demands because they know most members won’t actually sue. In these cases, your demand letter just tips them off to prepare their defense. Better to file suit and serve them with the complaint, which they can’t ignore.
When the amount in dispute is under $1,500-$2,000, the economics of hiring a lawyer to write a demand letter often don’t make sense. You can write your own demand letter or just go straight to small claims court, which is designed for self-represented parties and doesn’t require lawyers. Small claims also forces the operator to respond since ignoring a court summons results in default judgment.
Another situation to avoid demand letters: when you’re clearly in the wrong and just hoping they won’t enforce the contract. If you signed a 12-month agreement, left after three months with no justification, and they’re rightfully seeking early termination fees under a reasonable liquidated damages clause, sending a demand letter threatening litigation just makes you look bad and eliminates any sympathy the operator might have had to work out a payment plan or reduced settlement.
Alternative Dispute Resolution Options
Many coworking agreements include arbitration clauses requiring disputes to be resolved through arbitration rather than court. Some include mediation clauses requiring good-faith mediation before any formal action. Check your agreement before sending a demand letter because if arbitration or mediation is mandatory, you need to reference that in your letter.
Arbitration clauses can work in your favor or against you depending on the specifics. Some require the operator to pay arbitration costs, which disincentivizes them from forcing small disputes to arbitration. Others have fee-splitting provisions that might make arbitration expensive for you. Some specify arbitration providers like JAMS or AAA that have procedures more favorable to businesses than small claimants.
If arbitration is mandatory, your demand letter should state that you’re prepared to file for arbitration if the matter isn’t resolved. This shows you’re serious and understand the contractual dispute resolution process. It also puts time pressure on the operator because once you file for arbitration, costs start accruing immediately.
Mediation can be valuable even when not mandatory. Offering to mediate in your demand letter signals that you’re reasonable and open to compromise. Some coworking operators will agree to mediation even for small disputes because it’s cheaper than having their legal team spend time responding to demands and potential litigation. A skilled mediator can also help bridge gaps when the issue is more emotional than legal.
Crafting an Effective Coworking Demand Letter
A well-crafted demand letter for a coworking dispute needs to do several things simultaneously: establish the legal basis for your claim, quantify your damages, demonstrate that you have evidence to support your position, signal that you’re prepared to escalate if necessary, and leave room for reasonable negotiation. Balancing these elements takes thought and strategy.
Essential Components
Start with a clear, professional heading identifying who you are, who you’re writing to, and the subject matter. Include dates, agreement numbers, space locations, and other identifying information to ensure the letter reaches the right person and they can immediately pull your file. Operators deal with hundreds of members; make it easy for them to understand which situation you’re addressing.
The opening paragraph should state your purpose directly: “I am writing regarding my membership agreement for [space location] entered on [date], which I am currently in the process of terminating due to material breaches by [operator name]. This letter constitutes formal notice of those breaches and demand for refund of [amount].” Don’t bury the lead. They should know within the first paragraph what you want.
The body of the letter systematically lays out your legal case. Start with the contract formation: what agreement was signed, what terms were agreed to, what promises were made. Then detail the breaches: what did the operator fail to do, what did they do wrong, how did their conduct violate the agreement. Use specific dates, quote specific contract provisions, and cite specific incidents. Vague complaints like “the service was terrible” don’t help. Specific factual statements like “the internet went down on April 15, May 3, and May 22, preventing me from participating in scheduled client calls” create accountability.
After establishing the facts, connect them to legal claims. Reference breach of contract, implied covenant of good faith and fair dealing, fraudulent inducement, conversion, or other relevant theories. You don’t need to write a legal treatise, but showing that you understand the legal framework signals that you’re not just complaining but asserting cognizable legal rights.
Quantify your damages with as much specificity as possible. Break down the numbers: “I paid $6,000 in membership fees over 12 months. During that time, the promised conference room access was unavailable 80% of the time I attempted to book it, representing $2,400 in value I did not receive. The internet failures cost me three client relationships worth approximately $5,000 in lost revenue. I incurred $800 in additional costs for alternative workspace during outages. Total damages exceed $8,200.”
The closing should state your specific demand and deadline: “I demand refund of $6,000 in membership fees, return of my $500 security deposit, and reimbursement of $800 in incidental costs, for a total of $7,300. I expect response to this demand within 14 days of receipt. If I do not receive satisfactory response by [specific date], I will proceed with [arbitration/small claims litigation/other action].”
Tone and Strategy
The tone of a coworking demand letter should be firm but professional. You’re not writing to a friend, but you’re also not writing to an adversary you plan to destroy. Most coworking disputes can be resolved through negotiation, so you want to maintain that possibility while still being clear about your position.
Avoid emotional language, personal attacks, or threats that go beyond legal remedies. Don’t say “you’re a scam operation that rips off hardworking people and I’m going to make sure everyone knows it.” Do say “the pattern of conduct described above suggests systematic breach of contractual obligations that affects multiple members and may warrant regulatory attention.”
Some lawyers believe in aggressive demand letters that threaten everything possible: litigation, regulatory complaints, media exposure, online reviews, and public shaming. I find this approach usually backfires in coworking disputes. It makes the operator defensive, destroys any possibility of reasonable negotiation, and often looks like empty bluffing. Better to make a few specific, credible threats that you’re actually willing to follow through on.
One effective technique is the comparison to other members’ experiences. If you know other members have had similar problems, reference that (without naming them): “I understand from conversations with other members that internet reliability has been a widespread problem at this location, suggesting this is not an isolated incident but a systemic failure to maintain infrastructure.” This implies that the operator faces potential class action risk or regulatory complaints from multiple members, not just you.
Evidence and Documentation
Attach documentary evidence to your demand letter or at least reference it specifically. If the website promised amenities that aren’t provided, include screenshots with timestamps. If the contract includes specific service commitments, attach a copy with the relevant provisions highlighted. If you have email correspondence where you complained about problems and they acknowledged them, include that.
Photo evidence is particularly powerful in coworking disputes. If the website shows a beautiful, spacious office and the reality is a cramped, dirty room, photos prove misrepresentation. If equipment is constantly broken, date-stamped photos establish the pattern. If they’re violating building codes or safety regulations, photographic evidence supports your claims.
Financial records are essential. Attach bank statements showing your payments, invoices showing charges you’re disputing, and receipts for any costs you incurred due to their breach (like paying for day passes at another space when yours was unavailable). The more documentation you have, the harder it is for them to claim you’re exaggerating or lying.
Witness statements can also help, though be careful about privacy issues. If another member experienced the same problems and is willing to provide a written statement, that corroborates your claims. But don’t identify other members without their permission and don’t make allegations about what happened to others unless you have direct knowledge.
Common Mistakes to Avoid
The biggest mistake in coworking demand letters is making demands you can’t prove. If you claim $10,000 in lost business due to internet outages, you better be able to show specific clients you lost and how you calculated that amount. Wild damage claims that aren’t supported by evidence make your entire letter less credible.
Another mistake is demanding things the operator legally can’t give you. For example, demanding they cancel your membership retroactively and refund all fees paid when you actually did use the space for several months. You’re entitled to damages for breach, but you can’t get full rescission unless the breach was so material that the contract should never have been formed or the entire purpose was frustrated.
Failing to account for any value you received is also problematic. If you’re demanding a full refund of 12 months of fees but you actually used the space successfully for eight of those months, the operator will rightfully point out that you got value for most of your membership. Better to focus your demand on the specific period when services weren’t provided or the specific amenities that were missing.
Some members make the mistake of threatening actions they have no intention of following through on. “I will sue you for $100,000 and report you to every regulatory agency in California” sounds tough, but if you don’t actually do it after the operator calls your bluff, you’ve lost all leverage for future negotiations. Only threaten what you’re genuinely prepared to do.
Finally, don’t make the letter too long. Nobody reads a 15-page demand letter. You lose key points in the verbosity. Aim for 3-5 pages maximum. State the facts clearly, cite the legal basis, quantify damages, make your demand, set a deadline, and close. If you need to include extensive evidence, attach it as exhibits rather than embedding it in the letter body.
Specific Demand Letter Strategies for Different Scenarios
Different types of coworking disputes require different demand letter approaches. The strategy that works for a refund demand based on COVID-19 closures won’t work for an access denial dispute, and vice versa.
Membership Cancellation and Refund Demands
When you want to cancel your membership early and get a refund, your demand letter needs to establish legal justification for cancellation without penalty. This means showing material breach by the operator, impossibility or frustration of purpose, or unconscionability of the early termination provisions.
Lead with the operator’s breaches. Detail every way they failed to provide promised services. Show that these weren’t minor inconveniences but material failures that substantially reduced the value of the membership. Connect the breaches to specific contract provisions they violated. Argue that material breach by one party excuses performance by the other party, so you’re entitled to terminate without penalty and receive a refund for the period when services weren’t provided.
If you’re arguing impossibility or frustration of purpose (like COVID-19 shutdowns), emphasize that the circumstances were beyond anyone’s control but they fundamentally changed the nature of the bargain. The agreement assumed you could legally access and use the space. Government orders made that impossible. Neither party can perform under those circumstances, so the contract should be rescinded with neither party bearing the loss. This means the operator should refund membership fees for the shutdown period.
Address the early termination penalty directly. Quote the specific provision, then argue why it’s unenforceable. If it’s unreasonably high compared to any actual damages, call it out as a penalty rather than liquidated damages. If the operator has a waitlist and can immediately re-rent the space, argue that they suffer no damages and therefore the penalty is excessive. Offer to pay reasonable liquidated damages that reflect actual harm, such as one or two months of fees to cover their re-rental costs.
Close with a specific demand and timeline. “I am terminating my membership effective [date] due to material breaches described above. I demand refund of $X representing fees paid during the breach period, plus return of my $X security deposit, for total payment of $X. I expect payment within 14 days. If this matter is not resolved by [specific date], I will file [arbitration demand/small claims action] to recover these amounts plus additional damages and costs.”
Access Denial and Lockout Response
Access denial demands are time-sensitive and require immediate action. If you’re locked out of the space, you may need to send the demand letter within 24-48 hours and follow up with emergency legal action if they don’t respond.
Start by documenting the lockout. Note the date and time you discovered you couldn’t access the space, what happened when you tried to get information, and any communications (or lack thereof) from the operator. If they didn’t give you any notice before locking you out, emphasize that breach prominently.
State the immediate harm you’re suffering. If you can’t access your property, list what’s inside and its value. If you’re losing business because you can’t work, quantify those losses. If you have client obligations you can’t meet, explain the reputational damage. Make clear that this isn’t just an inconvenience but active harm occurring with each passing day.
Demand immediate reinstatement of access as the primary relief. You want back in now, not next week. “I demand immediate restoration of my access to [space location] no later than [specific date and time]. I also demand return of any personal property currently held in the space, including [list items].”
Threaten emergency legal action if access isn’t restored. In California, you might be able to seek a temporary restraining order if they’re wrongfully denying you access to your property. While this is expensive and difficult, the threat signals that you’re serious. “If access is not restored by [deadline], I will immediately file an emergency motion for temporary restraining order to compel access and prevent further conversion of my property.”
Also demand compensation for losses. “Additionally, I demand compensation of $X for [lost business/inability to meet client obligations/cost of temporary workspace/other damages] incurred as a result of the wrongful lockout. These damages continue to accrue until access is restored.”
Dispute Over Charges and Fee Assessment
When you’re disputing improper charges, your demand letter should meticulously break down every disputed item, explain why each charge is unauthorized, and demand both removal from future bills and refund of amounts already paid.
Create a table or list showing: date of charge, amount, description on the invoice, and why it’s improper. For example: “March 2025: $25 ‘community fee’ – not included in membership agreement, no notice provided, no explanation of what this fee covers, charge unauthorized.” Do this for every disputed item. The detail matters because it shows you’re not just complaining about the total but have specific objections to specific charges.
Reference the original agreement provisions showing what fees you did agree to pay. Quote the language: “Section 3 of the membership agreement states that monthly fees are $X and explicitly lists all included services. Community fees are not mentioned anywhere in the agreement, nor were they disclosed during the sign-up process.”
Demand itemized explanation for any charge you don’t understand. “I demand detailed explanation of what ‘community fee,’ ‘technology surcharge,’ and ‘facility enhancement charge’ represent, what services or benefits these fees provide, and what contractual basis exists for charging them.”
Calculate total unauthorized charges over the relevant period. “Based on the above, I have been improperly charged a total of $X over Y months. I demand immediate refund of this amount.”
Also demand removal of these charges going forward. “I further demand that all unauthorized charges be removed from future invoices. I will pay only the base membership fee of $X per month as stated in the agreement, plus any additional fees that are properly authorized and disclosed.”
Set a deadline and consequences. “I expect response within 14 days explaining the basis for these charges and confirming refund and removal. If I receive any further bills including unauthorized charges or if refunds are not processed, I will dispute those charges with my credit card company and pursue recovery of all improper charges through [arbitration/small claims/other mechanism].”
Security Deposit Recovery
Security deposit disputes require careful attention to the itemization requirements and burden of proof. Your demand letter should shift the burden back to the operator to justify any deductions.
Start by establishing your right to deposit return. Reference the specific provision in the agreement dealing with deposits. State when you terminated your membership, when you vacated the space, and that you complied with all move-out requirements. “I terminated my membership effective [date], provided required [30-day] notice, and fully vacated the space on [date]. Under Section X of the agreement, my security deposit of $X is due back within [timeframe] of move-out.”
If you received an itemization of deductions, address each one specifically. Quote what they claimed, then explain why it’s improper. “The itemization claims $150 for ‘excessive cleaning.’ However, I cleaned the space thoroughly before vacating, the space was in materially the same condition as when I moved in, and the operator has provided no photographs or documentation of what cleaning was supposedly required beyond normal cleaning.”
Challenge vague or conclusory deductions. “The itemization includes $200 for ‘repairs’ with no explanation of what repairs were needed, what damage allegedly existed, or any evidence that I caused such damage. Without specific documentation, this deduction appears to be arbitrary.”
If they didn’t provide itemization at all, that’s a separate breach. “The agreement requires itemized statement of any deductions within [timeframe]. No such statement has been provided. Under California commercial law principles, failure to provide timely itemization may result in forfeiture of the right to make deductions.”
Assert normal wear and tear. “To the extent any degradation of the space exists, it results from normal wear and tear over [length of membership], which cannot be charged against the security deposit. The deposit may be used only for damage beyond normal wear and tear caused by the tenant.”
Demand full or partial refund with calculation. “Of the $X deposit, $Y was improperly deducted. I demand refund of $Y within 7 days. I am willing to accept [lesser amount] to resolve this matter if payment is made promptly, but if not resolved, I will pursue the full amount plus costs through small claims court.”
Negotiation Strategies After Sending the Demand Letter
The demand letter is just the opening move. What happens after you send it often determines whether you reach resolution or end up in protracted conflict. Being strategic in post-demand negotiations increases your chances of favorable settlement.
Responding to Counteroffers
Most coworking operators won’t simply accept your demand as written. They’ll respond with a counteroffer, partial acceptance, or request for more information. How you respond determines whether negotiations move forward or stall.
If they offer partial payment or credit toward future membership, evaluate whether that’s acceptable. Sometimes a bird in hand is worth two in the bush. If they offer to refund 60% of what you demanded and it would cost you more than 40% in time and legal fees to pursue the rest, taking the deal might make sense. But if they’re offering 20% of what you’re owed and you have a strong case, holding out is appropriate.
When they claim they need more information or documentation, provide it promptly if it’s reasonable. This shows you’re negotiating in good faith and eliminates their excuses. But watch out for stalling tactics. If they keep asking for “just one more thing” and never actually make a substantive offer, they’re probably not negotiating sincerely. Set a deadline: “I will provide the additional documentation you requested by [date]. I expect your substantive settlement offer within 7 days after receiving that information.”
If their counteroffer is based on a different interpretation of the contract, evaluate whether their interpretation is reasonable. Sometimes operators will point out provisions you missed or interpretations you didn’t consider. If they have a legitimate argument, be willing to adjust your position. But if they’re clearly stretching or misrepresenting the contract terms, push back firmly with specific references to the actual language.
Consider splitting the difference on disputed amounts where both sides have some merit. If you’re demanding $5,000 and they’re offering $2,000, and you both have reasonable arguments, meeting at $3,500 might be the practical solution. Don’t be so rigid that you lose a good settlement over the last few hundred dollars.
Using Deadlines and Escalation
Deadlines create pressure but need to be realistic. If you give them 14 days to respond and you’re genuinely willing to file suit on day 15, that’s an effective deadline. If you give them 7 days but you actually need time to save money for filing fees and you probably won’t file for another month anyway, they’ll sense the deadline is soft and ignore it.
When the deadline passes without satisfactory response, follow through with escalation. If you said you’d file for arbitration, file the demand. If you said you’d go to small claims, file the claim. If you said you’d report them to regulatory authorities, do it. Following through on threatened escalation establishes that your future threats are credible.
However, escalation doesn’t mean communication ends. You can file a small claims lawsuit and still negotiate settlement before the hearing. You can initiate arbitration and settle during the preliminary stages. Filing formal action often prompts settlement because it signals seriousness and creates actual costs for the operator.
Use staged escalation when appropriate. Before filing suit, send a final letter noting the deadline passed and giving one more short opportunity to avoid litigation: “I note that the 14-day deadline for response to my demand has passed. I am prepared to file suit this week. However, if you are willing to engage in serious settlement discussions, I will hold off on filing to give you one final opportunity to resolve this amicably. Please respond by [date 3 days away] if you wish to pursue settlement, otherwise I will proceed with filing.”
When to Involve Lawyers
For smaller disputes under $5,000, hiring a lawyer to negotiate might not be cost-effective. But for larger disputes or complex situations, having attorney assistance can significantly improve outcomes.
Lawyers can spot issues and opportunities you might miss. We know which arguments resonate with operators, which threats carry weight, and which compromise positions are reasonable. We also have experience predicting when cases will settle versus when litigation is inevitable, which helps you make informed decisions.
Having a lawyer write or review your demand letter signals that you’re serious and have resources to pursue the matter. It also eliminates any personal emotional element from the negotiation. When I send a demand letter on behalf of a client, the operator knows they’re dealing with someone who understands the law and won’t be intimidated or manipulated.
Lawyers can also handle the negotiation directly, which takes the burden off you and prevents you from saying something that might hurt your case. I’ve seen members undermine their own positions by getting emotional in direct communications with operators, or by making admissions that weaken their legal claims.
However, lawyers are expensive. If hiring counsel would cost more than the amount in dispute, it doesn’t make economic sense unless you have an attorney fee recovery provision in your contract. Many coworking agreements include language that the prevailing party in any dispute is entitled to recover attorney fees. If your contract has this provision, hiring a lawyer becomes more viable because you can potentially recover those costs if you win.
Some lawyers, including my practice, offer unbundled services where we help with specific tasks rather than full representation. I might review and edit your demand letter for a flat fee rather than taking over the entire matter. Or I might provide strategic advice on negotiation tactics without actively participating in communications. This limited scope representation reduces costs while still giving you professional guidance.
Alternative Remedies and Parallel Actions
Demand letters aren’t the only tool for resolving coworking disputes. Several other options exist that can be pursued alongside or instead of formal demand letters.
Credit Card Chargebacks
If you paid membership fees by credit card and the operator breached the agreement or charged unauthorized amounts, you can dispute the charges with your card issuer. Credit card chargebacks are powerful because they reverse the charge and shift the burden to the merchant to prove the charge was proper.
The challenge with chargebacks in coworking disputes is that card issuers have time limits for disputes, usually 60-120 days from the charge. If you’re seeking refunds for membership fees paid eight months ago, chargebacks aren’t available. But for recent charges or ongoing unauthorized fees, chargebacks can be effective.
Chargeback reason codes relevant to coworking disputes include: services not provided (you didn’t receive what was promised), cancelled recurring transaction (you cancelled membership but they kept charging), fraudulent transaction (they charged amounts you didn’t authorize), and not as described (services materially different from what was advertised).
When you file a chargeback, the merchant has an opportunity to respond with evidence that the charge was proper. Coworking operators usually submit the membership agreement and claim you owe the fees under the contract. You then get a chance to rebut with evidence of breach, misrepresentation, or unauthorized charges. The card issuer makes a determination based on their policies and card network rules.
Running parallel chargeback and demand letter strategies can be effective. The chargeback addresses recent charges, while the demand letter seeks recovery of older fees and other damages. The operator faces financial pressure from the chargeback (which affects their merchant account standing if they have too many) while simultaneously receiving your demand letter for additional amounts.
One caution: some coworking agreements include provisions stating that filing chargebacks is a material breach allowing termination and collection of all remaining fees. Read your agreement before filing chargebacks to understand the potential consequences. If you’re trying to stay in the space while resolving a billing dispute, chargebacks might trigger immediate termination.
Regulatory Complaints
Coworking operators are subject to various regulatory authorities depending on their business structure and practices. Filing regulatory complaints can motivate settlement even when demand letters don’t.
If the operator is engaging in false advertising or fraudulent practices, complaints to the Federal Trade Commission or California Department of Consumer Affairs may be appropriate. These agencies typically don’t provide individual relief, but they investigate patterns of complaints and can take enforcement action against bad actors.
For operators who are systematically violating consumer protection laws, complaints to the California Attorney General’s office can be effective. The AG’s consumer protection division investigates unfair business practices and sometimes takes action against companies affecting many consumers.
If the coworking space is in a building that’s violating building codes, health codes, or safety regulations, complaints to local building departments or fire marshals can create pressure. Operators don’t want regulatory scrutiny of their properties. A well-documented complaint about safety violations or code non-compliance gets attention.
Business licensing issues are another pressure point. If the operator is operating without proper business licenses, commercial space permits, or other required authorizations, complaints to city business licensing departments can create problems for them.
The strategic value of regulatory complaints is that they create headaches for the operator that are separate from your individual dispute. Even if they’re willing to stonewall you, they can’t ignore regulatory authorities. The complaint also suggests that if they don’t resolve your issue, you’re willing to cause broader problems for their business.
Online Reviews and Public Pressure
The coworking industry is heavily reputation-dependent. Most members find spaces through online research, reviews, and word of mouth. Negative reviews on Google, Yelp, and industry-specific sites like Coworker can significantly impact an operator’s ability to attract new members.
Before posting negative reviews, understand the legal limits. Reviews must be honest and based on your actual experience. You can’t make false statements, exaggerate, or claim things that didn’t happen. Stick to factual descriptions of problems you personally experienced. Opinion statements like “I think the operator is incompetent” are protected, but false factual claims like “the operator stole my deposit” (when they claim they kept it for legitimate deductions) could be defamatory.
Many operators will respond to negative reviews, which creates a public record of your dispute. If you post a detailed, factual review explaining the problems you experienced and they respond with lies or misrepresentations, that can actually help your case. Their public statements can be used as admissions or evidence of bad faith.
Some coworking agreements include clauses prohibiting negative reviews or requiring disputes to be resolved privately. These “no disparagement” clauses have questionable enforceability under California law, which strongly protects consumer speech. But be aware they exist and might be asserted against you.
The most effective approach is to use the threat of negative reviews as settlement leverage rather than actually posting reviews before resolution. In your demand letter, you can note that if the matter isn’t resolved, you will “feel compelled to share my experiences publicly to warn other potential members.” This implies negative reviews without technically threatening them. Some operators will settle to avoid public criticism.
Small Claims Court
For disputes under $10,000 ($5,000 for corporate/business entities filing as plaintiffs), California small claims court is designed for self-represented parties and doesn’t require lawyers. Filing fees are minimal ($30-$75 depending on claim amount), procedures are simplified, and cases get heard relatively quickly.
Small claims is particularly effective for coworking disputes because the issues are usually straightforward, the amounts are in the small claims range, and the operator can’t use their superior resources to drag out the case. In small claims, both sides show up, present evidence, and the judge decides that day. No depositions, no extensive discovery, no motion practice.
The downside of small claims is limited recovery. You can’t get attorney fees even if your contract allows them. You can’t get punitive damages. You’re limited to actual economic damages, which means quantifying your losses precisely. But for straightforward breach of contract or refund claims, small claims is often the most practical remedy.
Filing a small claims case also creates pressure separate from demand letters. Once the operator is served with a summons, they have to respond. Ignoring it results in default judgment. Even if they plan to fight the case, they have to spend time and resources preparing, appearing, and presenting their defense. Often they’ll offer settlement before the hearing to avoid the hassle.
You can send a demand letter first, then file small claims if you don’t get satisfactory response. The demand letter shows you tried to resolve things amicably, which judges appreciate. Some jurisdictions require pre-litigation demand attempts before filing small claims, so the letter also fulfills that procedural requirement.
Class Action Possibilities
If the operator’s misconduct affects many members similarly, a class action might be possible. This is most relevant for systematic issues like charging unauthorized fees to everyone, false advertising that induced many people to sign up, or failing to provide core promised services across all locations.
Class actions are complex and require specialized attorneys. You’re not filing a class action yourself; you’d need to find a lawyer willing to take the case on contingency. But the possibility of class action liability creates enormous pressure on operators because the damages can be massive and the legal costs are substantial.
In your individual demand letter, you can reference the potential for class action without directly threatening it. “I understand from speaking with other members that the issues I experienced are widespread, affecting dozens or hundreds of members at multiple locations. This suggests systematic breach that could potentially give rise to class action liability.” This plants the seed that your individual dispute might be part of a larger problem.
If you know other affected members, you might suggest they also file complaints or send demand letters. Multiple complaints create the appearance of systematic problems and increase pressure on the operator to implement systemic fixes rather than just addressing individual cases.
Practical Considerations and Final Thoughts
After handling coworking disputes for nearly a decade, I’ve learned that the best outcomes usually come from being firm but reasonable, well-documented but not obsessive, and willing to negotiate while maintaining clear boundaries about what’s acceptable.
Coworking operators vary enormously in how they handle disputes. Some are reasonable business people who will address legitimate complaints professionally. Others are difficult and will fight every demand regardless of merit. Understanding which type you’re dealing with early helps you calibrate your strategy.
The smaller local operators often have more flexibility to work out creative solutions. They might not be able to give you a cash refund but could offer extended membership, upgraded services, or other non-monetary benefits. The large corporate operators have less flexibility but also more resources and more concern about systematic reputational damage.
Timing matters in coworking disputes. If you wait until you’ve already terminated your membership and moved out, you have less leverage than if you raise issues while you’re still a paying member. The operator knows that once you’re gone, you’re less likely to pursue the matter aggressively. Addressing problems while you’re still in the space (if you want to stay) or immediately upon departure (if you’re leaving) maximizes your chances of resolution.
Documentation is everything. I cannot overstate how important it is to keep records of all communications, save all emails, take dated photographs of problems, and maintain organized files of your agreements and invoices. I’ve seen clients with legitimate claims lose because they couldn’t prove what the operator promised or demonstrate that problems actually existed. Good documentation is your insurance policy.
Finally, maintain perspective about what’s worth fighting for. If you’re seeking a $500 refund and it’s going to cost you 20 hours of time, $200 in filing fees, and enormous stress, maybe it’s not worth it. But if the operator’s conduct was truly egregious and you want to hold them accountable even beyond the money, that’s a different calculation. Only you can decide what matters enough to pursue.
My practice is built on helping businesses and individuals navigate these kinds of commercial disputes practically and cost-effectively. If you’re facing a coworking dispute and want professional guidance on whether a demand letter makes sense, what leverage you have, and what outcomes are realistic, I offer consultations where we can evaluate your specific situation and discuss strategy. You can schedule a consultation at terms.law/call/.
Frequently Asked Questions
Can a coworking operator legally lock me out without notice if I’m behind on payments?
Not usually. Even if the contract gives them broad termination rights, basic contract law and the implied covenant of good faith require reasonable notice before termination. The operator can’t just lock you out one day without warning, even if you owe money. They need to give you notice that you’re in default, opportunity to cure the default by paying what’s owed, and notice of their intent to terminate if you don’t cure. The specific notice requirements depend on your contract terms and state law, but California commercial law generally requires at least some notice and cure period. If they lock you out without proper notice, they’ve breached the contract even if you were behind on payments, and you may have claims for wrongful lockout, conversion of your property inside the space, and damages from lost business.
What can I do if the coworking space isn’t providing the amenities that were advertised when I signed up?
This is a clear breach of contract claim. The operator made specific promises about available services and amenities, you relied on those promises in deciding to sign up, and they’re not delivering. Your remedies depend on how material the missing amenities are to your membership. If high-speed internet was a key selling point and it constantly fails, that’s a material breach that might justify terminating the membership without penalty and demanding a refund. If the missing amenity is something minor like coffee in the break room, you’re entitled to a partial refund or fee reduction reflecting the reduced value, but probably not full contract rescission. Start by documenting what was promised versus what’s actually provided. Compare the advertised features on their website, promotional materials, and sales presentations to what actually exists. Send a formal complaint demanding that they either provide the missing amenities or reduce your fees accordingly. If they don’t respond satisfactorily, a demand letter is the next step, quantifying the value of missing amenities and seeking refunds.
My coworking agreement has a 12-month commitment but I need to leave after 6 months. The early termination fee is equal to all remaining fees. Is that legal?
Probably not. While commercial contracts allow for liquidated damages clauses, a “fee” that equals 100% of remaining payments isn’t really a liquidated damages clause at all – it’s just making you pay for the full term whether you use the space or not. California courts distinguish between valid liquidated damages (a reasonable pre-estimate of actual damages) and unenforceable penalties (amounts designed to punish breach rather than compensate for actual losses). A reasonable early termination fee would be 1-3 months of fees plus actual costs of finding a replacement tenant. Charging you the full remaining balance is almost certainly an unenforceable penalty, especially if the operator has a waitlist and can immediately re-rent your space. Additionally, the operator has a duty to mitigate damages by making reasonable efforts to re-rent. If they re-rent your space two weeks after you leave but still collect six months of fees from you, that’s double recovery and not permitted. Challenge the penalty provision in your demand letter, offer to pay reasonable liquidated damages that reflect actual harm (perhaps two months fees), and assert that enforcement of the excessive penalty would be unconscionable.
The coworking operator is holding my security deposit and claiming vague “damages” without providing any documentation. What are my rights?
In commercial contexts, California law doesn’t have the same strict deposit return requirements as residential tenancy law, but basic principles still apply. The operator must use your security deposit only for actual damages you caused beyond normal wear and tear, and they should provide itemized accounting of any deductions. If they claim damages but provide no documentation, photos, or detailed explanation of what damage occurred and how much it cost to repair, you can challenge those deductions as arbitrary and unsupported. Send a written demand for itemized statement of all deductions, including description of alleged damage, photographs or other evidence, receipts for repair costs, and explanation of how you caused the damage. If they can’t provide this documentation, argue that the deductions are improper and demand return of your full deposit. Normal wear and tear – things like minor scuffs on furniture, carpet wear from daily use, or general aging of equipment – cannot be charged against your deposit. Only damage substantially beyond what would occur from regular use of the space can justify deductions.
Can I be held liable if someone else uses my membership card to access the coworking space?
This depends on your contract terms and the circumstances. Most coworking agreements prohibit sharing access and make you responsible for anyone you allow to use your membership. If you intentionally gave your access card to a friend and they caused damage or violated policies, you’re probably liable under a contract provision holding members responsible for guests or unauthorized users. However, if your card was stolen and someone used it without your knowledge or permission, you shouldn’t be held liable for their actions. The key is whether you willingly shared access versus whether it was used without your consent. If the operator is trying to hold you responsible for unauthorized use, respond with evidence that you didn’t permit the access, report the theft or unauthorized use to the operator immediately when you discover it, and assert that contract provisions making you liable for guests or authorized users don’t apply to theft or unauthorized access situations. You might also argue that the operator’s security measures were inadequate if someone could use a stolen access card without any verification of identity.
What happens if the coworking company goes bankrupt while I still have months remaining on my membership?
Bankruptcy complicates everything because it triggers an automatic stay on collection efforts and the bankruptcy court takes control of the debtor’s assets and liabilities. Your membership agreement is an executory contract (one where both sides still have obligations to perform), and the bankruptcy trustee gets to decide whether to assume the contract (continue operating under its terms), assign it to another party, or reject it (essentially terminate it). If they reject the contract, your remaining membership term is cancelled and you become an unsecured creditor for any prepaid fees or deposits. Unfortunately, unsecured creditors in business bankruptcies typically recover pennies on the dollar, if anything. If you prepaid for six months and the company goes bankrupt after two months, you probably won’t get your money back for the unused four months. Your best move when you learn the operator is in financial distress is to stop paying anything beyond the current month, don’t prepay additional months or buy add-on services, and start looking for alternative space immediately. If they file bankruptcy, file a proof of claim in the bankruptcy case for any amounts owed to you, but don’t expect much recovery.
The coworking space has become unusable due to construction noise, HVAC failures, or other physical problems. Can I stop paying until they fix it?
Generally no, you can’t unilaterally stop paying without risking termination for non-payment. However, you can assert that their failure to maintain usable space is a material breach that excuses your continued performance and seek to terminate without penalty or demand fee reductions. Document the problems thoroughly – keep a log of dates and times when the space was unusable, take videos of excessive noise or temperature problems, save any communications acknowledging the issues. Notify the operator in writing that the conditions make the space unsuable for its intended purpose and demand immediate correction. If they don’t fix the problems within a reasonable time, send a demand letter asserting that their failure to maintain usable space is material breach, you’re terminating the agreement due to their breach, and you’re entitled to refund of any unused prepaid fees. The key legal concept is “constructive eviction” – when a landlord or space provider makes the premises unsuitable for occupancy, it’s the equivalent of evicting you, which excuses your continued payment obligations. However, you typically need to actually vacate the space to claim constructive eviction; you can’t continue using the unusable space while refusing to pay.
How do I prove that the coworking operator made promises that aren’t in the written contract?
This is difficult because of the parol evidence rule, which generally prevents parties from introducing evidence of oral promises or agreements that contradict a written contract. However, there are important exceptions. If the operator made fraudulent misrepresentations to induce you to sign the contract, you can introduce evidence of those misrepresentations despite the parol evidence rule. If the written contract is ambiguous or incomplete and oral statements help clarify the parties’ actual agreement, that evidence may be admissible. If the operator’s marketing materials, website, emails, or sales presentations made specific promises that aren’t mentioned in the contract, those materials can sometimes be considered part of the overall agreement or evidence of the parties’ intentions. Save everything – screenshots of website promises, promotional emails, sales presentations, text messages, and email exchanges where specific commitments were made. If sales representatives made verbal promises, write them down immediately with dates and details while you still remember. While proving oral promises is challenging, it’s not impossible if you have strong corroborating evidence.
Can the coworking operator change the terms of my membership mid-contract without my consent?
Not unilaterally for material terms. Basic contract law requires mutual consent to modify material contract terms. If your agreement says $500/month for 12 months with certain included services, the operator can’t suddenly announce mid-term that it’s now $650/month or that previously included services now cost extra. However, many coworking agreements include clauses allowing the operator to modify terms with notice, or stating that policies can be updated from time to time. The enforceability of these modification clauses depends on what’s being changed and how much notice was given. Minor operational changes like adjusting building access hours by 30 minutes or updating the guest policy might be within the operator’s discretion under reasonable modification clauses. But material changes to price, included services, or core terms probably require your actual consent, not just notification. If the operator attempts mid-contract modifications you didn’t agree to, object in writing immediately, state that you don’t consent to the changes, assert that unilateral modification of material terms is breach of contract, and continue operating under the original terms. If they insist on the changes or threaten termination because you won’t accept them, you have grounds for a breach of contract claim.