Renting is a flexible housing option for many home seekers, especially working professionals and students who temporarily move to different cities. Some people find renting two homes a suitable housing option, depending on their temporary work, lifestyle and financial priorities. Having a second home for rent makes relocation easier and costs less than owning multiple properties. But is it legally allowed to lease more than one property? When renting any property, it is crucial to comply with some legal requirements. There are also financial implications of renting two properties at the same time. For instance, it will mean increased rent payments and upfront expenses. In this guide, we will discuss the legality and practical aspects of holding two rental agreements simultaneously.
Is it legal to be a tenant on two properties?
When renting any property, tenants must comply with local rental laws, which may vary by state. Legally speaking, an individual can rent out two properties at the same time, and there is no specific law prohibiting renting multiple residential properties.
Tenancy involves two parties – the landlord and the tenant and both must sign a rental agreement clearly mentioning the terms. However, when renting two properties, a proper rental agreement must be signed. Informing both landlords of the two rental agreements and executing the agreement through proper legal procedure allows the person to legally occupy two homes and ensure a hassle-free tenancy.
However, it is worth noting that some landlords may have specific conditions for renting a property. For instance, they may insist that the tenant must occupy the property without subletting. This cannot be possible if the tenant is renting out two homes at the same time. Tenants should note that these are not legal requirements but contractual terms. Landlords may restrict tenants from having multiple rentals. So, this is a requirement tenants must fulfil to avoid legal issues or delays in finding a home.
Financial implications of maintaining two rentals
Renting two houses simultaneously may have significant financial implications for the tenant. This is because the person will incur two complete household costs.
- Increased rental payments: The tenant will be responsible for the monthly rent payments for two houses. Typically, landlords prefer tenants with stable income sources, with income at least three times the total monthly rent. Hence, a lot of financial planning will be required.
- Upfront expenses: In addition to rent, the tenant will incur immediate expenses such as security deposits, broker’s fee, and other move-in costs.
- Utilities: A tenant occupying two houses has to pay for two sets of utilities – water, electricity, gas, internet, etc. Even if a house remains unoccupied for some time, utility companies may charge a base connection fee that is paid monthly.
- Taxation: Tenants do not enjoy many tax benefits on occupying two properties, unlike property owners. However, House Rent Allowance (HRA) is a benefit available to tenants. Tenants should note that to claim HRA benefits, they must actually be residing in the property.
In addition to the above expenses, travel and commuting costs, as well as other household expenses, must be considered.
Legal requirements for maintaining two rentals
Rental agreements: When taking two houses on rent, make sure to sign a proper rental agreement after discussing the tenancy terms with the landlord. Depending on the tenure, registration of the rent agreement may be necessary.
Documentation: Tenants must provide valid identification and address verification to complete the agreement process. Further, they may have to undergo police verification for both properties and comply with the local laws of the state where each property is situated.
Moreover, every tenant should be aware of their rights and responsibilities as set out in the tenancy laws. They are required to adhere to the terms of the agreement, such as paying rent on time and maintaining the properties. Violation of any rental agreement clause can invite legal action from the landlord, including eviction in serious cases.
Reasons to rent two properties
- Work commitments: Renting is often a practical solution for someone working in another city or temporarily relocating for a work project. In such cases, it is likely the person may have to manage two rental properties – one for self-occupation and another for parents or dependents.
- Education opportunities in different cities: Similarly, students who move to different cities for education may live on rent. Depending on their personal situation, they may also need to rent more than one house.
- Seasonal living: Some people move to another city to escape the harsh seasonal changes, such as extreme winters or summers. For such people, moving to smaller towns, such as hill stations, necessitates another rental property.
- Temporary accommodation during home purchase: A person may need to rent if they have sold their old home and are waiting for possession of the new property. Renting is more self-reliant than staying with friends.
- Business needs: Some people rent residential property to run their home office or small business. This is subject to the local regulations and the terms of the agreements discussed with the landlord.
Housing.com News Viewpoint
It is legally allowed to rent two properties at the same time. However, every tenant should be aware of the legal and tax compliance requirements. Things such as adherence to the rental agreement terms and proper documentation, including the registration of the rent agreement, must be completed in accordance with local laws. A person may have financial implications by renting two properties simultaneously. Clearly, the tenant of two properties must incur higher expenses, which calls for prior financial planning.
FAQs
Can a landlord deny tenancy if I already rent a home elsewhere?
A landlord may specify terms that include requiring a tenant not to have another rented property. If one has already rented a home elsewhere, the landlord may deny the property. However, there is no specific law restricting the tenant from occupying the property.
Can I register my business at one rented home and live in another?
Running a business from a residential property requires adherence to local regulations in that specific state. One must check these laws before renting a property.
Can you claim rent receipts for both rented homes for tax benefits?
No. A tenant can only claim tax (HRA) benefits for one of the rented homes where they are actually residing.