What does a lease represent between a landlord and a tenant?

A lease is fundamentally a legal agreement between a landlord and a tenant that outlines the terms under which the tenant is granted the right to use and occupy a property owned by the landlord. It typically includes details about the duration of the lease, the amount of rent to be paid, responsibilities for repairs and maintenance, and the rights and obligations of both parties.

The first choice accurately captures the essence of a lease by specifying that it can be established as either a written or oral agreement. While written leases are preferred for clarity and legal protection, oral leases can also be valid depending on the circumstances and the jurisdiction. This option emphasizes the critical aspect of possession transfer, which is a key function of a lease, allowing the tenant to occupy the property under specific terms agreed upon with the landlord.

In contrast, the remaining choices do not adequately represent the nature of a lease. A verbal understanding without documentation lacks the legal enforceability and clarity usually expected in leasing agreements, while an informal arrangement without specified terms fails to establish the essential conditions that govern the tenant's occupancy. Lastly, describing a lease as a long-term sale agreement is misleading, as a lease does not transfer ownership of the property; rather, it grants temporary rights to use the property while ownership remains with the landlord