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A lease agreement is a legally binding contract outlining the rights and obligations of both landlords and tenants. It is essential to have one to avoid financial risks, such as losing thousands of dollars, dealing with property damage liability, and challenges in collecting unpaid rent. A well-crafted lease agreement serves as the first line of defense in disputes and provides a framework for addressing issues that may arise. Key components to include in a lease agreement are the property details, names of the parties involved, and their contact information. Understanding the basics of creating a lease can make you a proficient landlord.