IIRC it does, and otherwise throws out (or used to) an ARP check (or something like that) to see if any one on the local link is using the IP. A properly behaved DHCP server would not hand the IP again to someone else if the lease hasn't expired.

> properly behaved DHCP server

One of the common issues with this is that home routers don't usually persist leases across power cycles.

IIRC DHCP leases should be refreshed at their half-time. Or perhaps I am mistaken and this is how Windows works.