A leap year according to the Jewish calendar involves the addition of an extra month – a second Adar – in order to reconcile the lunar calendar (which has about 354 days per year) with the solar calendar (which has about 365). This is essential so that the Hebrew months and the Jewish holidays will take place in the proper time of year as the Torah teaches ( 16:1) that the Spring month – Nisan – is when the holiday of Pesaḥ is celebrated.
Although in modern times there is a set calendar and we add seven such months over a 19 year cycle, in the time of the Mishna leap years were established based on a variety of factors that were not known in advance. Thus, at the beginning of the year people would not know whether to expect a leap year that year or not.
Our Mishna discusses a rental agreement and teaches that if a house or a field was rented for a year, and that year turned out to be a leap year, the renter benefited by receiving an extra month as part of his year-long agreement. If, however, the agreement was to pay monthly, then the renter would have to pay for the extra month separately. In closing, the Mishna relates that once in Tzippori a bathhouse was rented for a yearly rental of 12 gold pieces, that is, one gold dinar per month, and Rabban Shimon ben Gamliel ruled that the value of the extra month should be split between the owner and the renter.
The Gemara explains that this ruling stems from the lack of clarity in the agreement, which opened with an agreement about an annual cost, but closed with an agreement about a monthly cost. This explanation notwithstanding, the conclusion of the Gemara is that the owner gets paid for the extra month in question – since the house clearly belongs to him, we will only make him lose if there is a clear proof against him.