Legal Question in Landlord & Tenant Law in Massachusetts

Hello,

I walked into an apartment complex on 10/31/10 looking for an apartment to rent. The agent took me for a tour and asked me if I wanted to start the application process and I agreed. She asked me to fill out the application and told me that the application is used for giving them permission to do background checking on my credit and rental history. She also asked for a $50 application fee that she said it's nonrefundable and a $500 security deposit which refundable any time if I decide not to rent the apartment and haven't the lease. I asked her specifically to assure that I can get my deposit back and she said according to the law, they can't take my deposit away without signing lease. She also mentioned they would not cash the deposit until the day I move in.

It took them roughly 10 days to approve my application and faxed me a form that states the date I can move in and the rent. I passively agreed to the term but in the back of my head, I assure myself this is an option and I can get my deposit back if I decide to back out. So my the Nov 24, I wrote them an email saying I decided not to rent an apartment from them and wanted my deposit back. The manager said backing out means forfeiting the deposit and she pointed it to me that the application I signed, it says "if (we) refuse to enter into a written lease upon being offered the above described apartment, they shall retain the earnest money as liquidated damages. Deposit is non-refundable after 48 hours. "

During the application process, the agent never mentioned that the deposit is non-refundable and she assured me I can take it back whenever if I don't sign the lease. My question is do I have a case here if I want to bring the company to a small court?

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