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A lease agreement is a crucial, legally binding contract that outlines the rights and obligations of both landlords and tenants. Without it, landlords risk significant financial losses, face difficulties in collecting unpaid rent, and could be held liable for property damage. Creating a lease is straightforward, and understanding its basics can greatly enhance a landlord's effectiveness. A well-drafted residential lease agreement helps prevent disputes and provides a framework to address issues that arise. Key elements to include in the lease are details about the property, names of the involved parties, and contact information.