As already mentioned, when a client receives a dynamically assigned IP address from a DHCP server, the address is said to be leased for a finite duration. The length of a DHCP lease is configurable by the system administrator and typically lasts for one or more days. Shorter leases allow for faster turnover of addresses and are useful when the number of available addresses is small or when many transient systems (such as laptops) are being served. Longer leases reduce DHCP activity, thus reducing broadcast traffic on the network.

When a lease expires without being renegotiated by the client, it as assumed that the client system is unavailable, and the address is put back into the free pool of addresses. A lease may also be terminated by a client that no longer needs the IP address, in which case it is released. When this occurs, the DHCP server immediately places the IP address back in the free pool.

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