given how important the lease is to both parties, landlords and tenants must educate themselves on the terms and legal implications of leases. in this section, you will learn about how leases work, what to look for when reviewing a lease or rental agreement, how to add a roommate to a lease (if allowed by lease), terminating a lease, and more. while verbal lease agreements may be considered valid, you should always insist that the terms are in writing in order to best protect your interests. if the tenant simply continues to pay rent after the lease term is up, and the landlord accepts the rent without offering a new lease, then the lease automatically carries over into a month-by-month lease in most states. if the tenant is planning to move out at the end of the lease, the landlord likely will take inventory of any damage done to the property and the cost of any required cleaning, which is paid through the security deposit.

a lease agreement is a contract for the rental of property over a fixed timeframe. the reason a tenant — commercial or residential — might want to lock in a lease for more than a year is because all other terms of the lease are fixed during the rental period. the key benefit of a rental agreement for landlords is flexibility to increase the amount collected, since the terms are fixed only for the duration of the rental period. for example, a person moving to your area to take a short-term job is probably more likely to sign a rental agreement than a lease agreement.