What is a lease agreement?

A lease agreement is fundamentally a legal contract that establishes the terms between a landlord and a tenant for renting a property. This document typically includes key details such as the duration of the lease, rental payment amounts, responsibilities of both parties, maintenance obligations, and any rules regarding the use of the property.

Creating a formal written lease is crucial as it provides clarity and protection to both the landlord and tenant, reducing the chances of misunderstandings or disputes. This contractual nature of a lease agreement distinguishes it from verbal agreements or informal arrangements, which can often lead to complications due to lack of documentation. Additionally, a lease is not related to financial statements or property value guarantees, which focus on assessing ownership and investment rather than outlining tenancy terms.