WeWork members demand deferment of fees during coronavirus

WeWork members demand deferment of fees during coronavirus
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WeWork customers are uniting in a group action to demand the company not charge their membership fees during the coronavirus pandemic when state stay-at-home orders prevent them from using the work spaces. 

Customers in Washington, D.C., New York, Los Angeles and other cities hired law firm Walden Macht & Haran to threaten to pursue arbitration in a letter to WeWork general counsel Jared DeMatteis on Thursday. 

“As long as this pandemic prohibits our clients from using their WeWork office spaces, the purpose of their membership agreements is frustrated, thus excusing their obligation to pay membership fees,” lawyer Jim Walden wrote.

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Members are being charged their full monthly fees and are not offered any concessions. Membership fees vary based on location but in Washington, they range from $700 a month for a one-person standard office to $18,000 a month for a 30-person standard office, with higher prices for larger teams and private floors. For one person in a communal space, prices range from $370 a month to about $500 a month. 

Walden Macht & Haran noted in a press release on Thursday that WeWork reportedly has reduced rent payments to its own landlords. WeWork did not pay April rent at numerous of its properties in the U.S. and is struggling to renegotiate leases, The Wall Street Journal reported.

Companies are generally paying typical office space leases during the pandemic but the stay-at-home orders have put the commercial real estate industry in the spotlight as firms adapt to employees working from home.

WeWork memberships are often compared to those of a gym, some of which are also catching heat for still charging customers while facilities are closed. Some gyms have allowed members to pause or freeze memberships during the pandemic.

Gold’s Gym filed for bankruptcy Monday after decreasing fees for members to use their digital platform with gyms closed.