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A lease agreement is a legally binding contract that outlines the rights and obligations of both tenants and landlords, crucial for avoiding disputes and protecting property. Without a lease, landlords risk losing money due to property damage and difficulties in collecting unpaid rent. Creating a lease is straightforward, and understanding its basics can make you an effective landlord. Key components of a lease agreement include the property being rented, the names and contact information of the parties involved, and essential terms to ensure clarity and prevent future issues. Having a lease is vital for safeguarding your investments and addressing problems as they arise.