An unsigned contract is legally binding when at least one of the parties began to fulfil the lease terms. Laws regarding how to terminate an unsigned lease vary from state to state.
A tenant who pays a security deposit and moves into a home begins to fulfil leasing terms. Because of this partial fulfilment, the tenant's actions substantiate the existence of a lease.
To be valid, a contract must have at least two parties and they must agree on the contract terms. The parties also must agree on an exchange. In this case, the property owner is exchanging the use of a rental unit for money. They must agree on the rental term and the monthly rent.
Without written proof, an unsigned lease is like a verbal contract. Each state has requirements for enforcing verbal contracts. Verbal contracts are more difficult to prove without written evidence. Utah courts, for example, will not enforce a rental agreement if the rental term is longer than one year and the agreement is not in writing. Other states like Virginia enforce verbal rental agreements but do not specify a period.