What is a lease agreement?

A lease agreement is fundamentally a contract that outlines the terms under which one party agrees to pay for the use of another party's property. This document specifies essential details such as the duration of the lease, the rent amount, payment due dates, responsibilities of both the landlord and tenant, and any other rules or conditions governing the use of the property.

By clearly defining these elements, a lease agreement safeguards the rights and obligations of both parties involved, ensuring that they understand what is expected in the landlord-tenant relationship. This formalization helps prevent misunderstandings and can serve as a legal document in case disputes arise.

Understanding that a lease is not merely a casual or informal understanding emphasizes the importance of having a well-drafted agreement in place to protect both parties legally. In contrast to the incorrect options, a lease is explicitly a contractual arrangement rather than a document detailing property sales, an informal agreement, or a financing form.