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The fact is most states only allow a oral contract between the tenant and landlord to be legal for a short period of time, because oral contracts often go to court it is necessary to have a written lease or rental agreement. The rental or lease agreement is used to specify the length of tenancy, the amount to pay, the number of people living on the property, pets, who pays utilities, whether your allowed to sub lease the property, when the landlord can access the property, and who is responsible for paying attorney fees if there is a lawsuit.