For a lease to be legally binding, what is required?

The requirement for a lease to be legally binding centers around mutual agreement, consideration, and competent parties.

Mutual agreement refers to the understanding and acceptance of the terms of the lease by both the landlord and tenant, which establishes a meeting of the minds. Consideration involves something of value being exchanged between the parties, typically the tenant's rental payments in exchange for the right to occupy the property. Competent parties signifies that all individuals involved in the lease are legally able to enter into a contract—this means they are of legal age and sound mind.

Other choices introduce elements that, while sometimes relevant, are not essential to the core legality of the lease agreement. For example, while verification by a third party and notarization can provide added security and verification, they are not required for a lease to be enforceable. Compliance with local insurance requirements may be important but does not directly affect the validity of the lease terms themselves. Similarly, while a signed document is important, it alone does not encapsulate the necessary components of mutual agreement and consideration that form the foundation of a binding lease.