What is a "lease" in real estate?

A lease in real estate is fundamentally a contractual agreement between a landlord and a tenant, which establishes the terms under which the tenant is allowed to occupy the property. This document outlines critical details such as the duration of the tenancy, the amount of rent to be paid, the responsibilities of both parties concerning maintenance and repairs, and other conditions like security deposits and the handling of breaches of agreement.

The importance of a lease arises from its function in providing a legal framework that protects the rights of both landlords and tenants. This contract ensures that tenants have the right to occupy and use the property while outlining the expectations for payment and maintenance, allowing for a clear understanding of each party's obligations.

In contrast, the other options pertain to different aspects of real estate. Property taxes are typically not covered in a lease but are rather obligations of property ownership. A formal appraisal is related to assessing property value, which is a separate process used for various reasons, including buying, selling, or refinancing property. Lastly, the transfer of property ownership is conducted through a deed, which is a different type of legal document that serves the purpose of conveying ownership from one party to another. Thus, the essence of a lease is its role as a binding agreement that defines the relationship between landlords