This question came up last week in Wegus, the largest Regus (customers only) discussion group on the internet. It began as a question about the timing of Regus issuing invoices and ended with a game-plan for getting out of an unwanted Regus contract early.
Let me recount how that Regus discussion began.
I signed up for a Regus co-working office on May 21st. On May 21st, I received two invoices. The first invoice was for a service retainer of 301.75, equal to the monthly office fee and 88.09 for the pro-rated amount for May. The second invoice was for the office fee of 301.75 for the entire month of June. Both of these invoices were paid on May 21st. I am on a month to month agreement.
Yesterday, June 8th, I received a third invoice for 468.58. The amount is different because I signed up for parking at the building which is $65. So that was added for May and June, and also included in the standing charges for July.
My question is, if I paid Regus 693.28 for May, June, and a service retainer, do I owe them now for the month of July? I also am wondering when the late fees are added and how often are they added? And what would be the penalty if I canceled right now?
Maurice, the Wegus member who asked this question, first wanted to simply understand the timing of Regus's invoices. This is important, because Regus has this unfortunate reputation for trying to use its billing and invoice sequences to obfuscate how much a customer owes and when, to keep you confused. This makes it easier for Regus to constantly claim that you owe more. So starting by first trying to understand what Regus's billing sequence is was a smart place to begin.
However, although this might seem like a simple objective to achieve, it might be harder than it looks. What makes Regus's billing practices almost comically difficult to understand is that they often seem to be unpredictably erratic. Here are two examples, the first of which also comes from a Wegus discussion.
Example # 1. One Wegus member asks Regus, "Why do you guys send late payment emails before monthly payment is due ( the first of month) Is Regis in that bad of financial shape. Its very irritating." Late payment emails before payment is due? Are you punking us, Regus?
(Although, not as good that time MTV Punk'd host Ashton Kutcher punked Justin Timberlake on MTV and made him cry.)
Example # 2. This might be the strangest case Veeto has ever seen. We actually got an email one time from a Regus VP who wanted a refund from Regus because she had been inadvertently charged to use a Regus meeting room (screenshot below, name changed to protect the hilarious). I cannot think of a better way to illustrate how horrendous Regus's billing system seems to be.
Once we established how the Regus billing system is probably supposed to work, we tackled the question about canceling the Regus contract immediately.
The answer is: it depends who you ask. Regus would say that, yes, the payment for July is due [as soon they could possibly get their hands on it]. Why? Because Regus prefers to hold that retainer as leverage over you. That way, when you go to cancel your lease, they could invent some reason that you owe more fees, because it is harder for you to get them to refund you for unused retainer than it is for them to dupe you into paying more money sooner than you really should have to.
This is not legal advice, and I am not your lawyer, but...
On a month-to-month lease, in my opinion, the smart move is to treat your retainer as your next month's payment and to ignore Regus's protests otherwise. This will not win you friends in Regus's billing department. But it will take away Regus's leverage over you, which is troublesome given their track record of committing billing errors (always conveniently in their favor, even at the expense of their own employees apparently) and inventing extra charges.
So if I wanted to cancel at this point, you're saying I should give them immediate notice, and let them keep the service retainer?
My ultimate goal is to leave. I have discovered the kind of company regus is and I want to end that relationship as soon as possible.
Nailed it. If the number of months remaining under contract, times your monthly fee, is equal to whatever amount Regus holds as your retainer, and you have missed no payments or incurred any other outstanding fees, then you should be able to terminate your contract immediately. Why? Because, often, the hard part about winning a lawsuit is proving the dollar amount of your damages.
I will tease this out to drive the point home.
Let's say Maurice tells Regus on June 8 that he is terminating his contract effective June 30. And suppose Regus objects, saying that he is obligated to pay for July, since he did not give a full 30-days notice. Regus knows that, even if both Maurice and Regus agreed on those facts, there might be no damages for Regus to recover, since Regus still holds Maurice's retainer in exactly the amount that Regus is alleging he still owes. So, in practical sense, no damages = no case. Thus Maurice, or anyone else on a month-to-month Regus agreement, or anyone whose remaining contractual obligations equal the amount of retainer Regus holds, could use this trick to side-step the 30-days notice requirement.
...not because the contract excuses Maurice from the 30-day notice requirement, but because the consequence to Regus of Maurice breaching that term are no greater than the amount of retainer Regus is then permitted to keep, which would make everyone square.
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