What is a lease agreement?

A lease agreement is a legal contract that explicitly outlines the terms and conditions under which one party agrees to rent property from another. This contract typically includes essential details such as the duration of the lease, the rental amount, responsibilities for maintenance, security deposits, and other rights and obligations of both the landlord and the tenant.

The nature of a lease as a formal, enforceable legal document provides security and clarity for both parties involved. It ensures that the terms are adhered to and offers recourse in case of disputes regarding the lease. This legal structure is crucial because it protects the interests of both landlords and tenants, establishing a clear understanding of what is expected throughout the rental period.

In contrast, an informal understanding lacks the legal enforcement that a lease agreement provides, making it much less reliable and potentially more prone to misunderstandings. Government regulations on rental properties are broader guidelines that may govern leasing practices but do not define a lease agreement itself. A guide for property management best practices may offer recommendations and strategies but does not function as a lease, which is specific to the rental transaction between landlord and tenant.