Can my landlord ask for a fee for a non-executed lease?

Question

In my lease, my landlord stipulated that on or before March 1st, he was going to email us a new lease (presumably for the next year), and we had to respond within 5 days whether or not we accepted this new lease. We never responded, in part because COVID hit our area hard right after we got the email. One of my roommates and I were planning on staying, and one was moving out, but we couldn't find another person to take over her part of the lease. The landlord knew we were looking for another roommate and planned on staying, but we never formally accepted or signed the new lease.

Now, he's charging us $500 for withdrawing from the non-executed lease. Holding fees are illegal in Massachusetts, and he's confiscated a $300 key deposit to partially cover the charge, which itself was illegal but we paid anyway under the impression that if we gave the keys back, he'd refund the deposit. So, do we really owe him the $200, does he owe us $300, or does neither party owe the other anything?

here's the actual language in the lease:

PRIOR TO 03-01-20, LESSEE shall provide email notice to LESSOR of its desire to enter into a new lease upon expiration of the current lease. LESSOR shall then email terms of a proposed new lease and LESSEE shall respond yea or nay via email within 5 calendar days of receipt of same if it accepts /rejects terms offered by LESSOR. If accepted, LESSOR shall email proposed lease dox. If rejected, LESSOR shall begin, and LESSEE shall allow, showing the unit to others during hours between 10AM and 6PM with prior emailed notice to LESSEE. If LESSEE rejects LESSOR offer, LESSOR rescinds all previous offers and LESSEE acknowledges that it will vacate the apartment at or prior to 12Noon on the last day of the lease.

A fee of $500.00 shall be assessed by the LESSOR against the LESSEE in the event of the LESSEE withdrawing from an executed lease or non-executed lease prior to lease commencement date, but for which LESSEE has tendered a one month deposit, or more, or for which the LESSOR retains a last month’s rent payment from a previous lease, to remove the respective leased premises from those available for leasing to others

We lived in Boston, MA, if that's helpful.

Answer 1

He probably owes you $300

Assuming you gave him the keys back.

So, at first blush, the $500 "fee" is probably unenforceable as it looks and smells like a penalty clause. If it had been phrased as a liquidated damages clause, it would probably be ok; $500 as a pre-estimate of damages for breaking a lease is actually on the low side.

There is no doubt that you have broken a term of your lease - you were required to "respond yea or nay via email within 5 calendar days" and you didn't. The clause then goes on to explain what happens if you say "yea" and what happens if you say "nay" but doesn't say what happens if you do neither.

It is certainly not the case that your failure to act means you said "yea" or "nay" by default (although the clause could have provided for that) so by not saying either, the landlord's offer would appear to still be available for acceptance or rejection unless and until they withdraw it.

Since you rejected it outside the time prescribed, you are liable for any damages the landlord suffered by your delay since timely response was a contractual obligation. If the landlord can demonstrate that because you were say 2 weeks late in your notice, they were 2 weeks late in their ability to show the property and consequently lost 2 weeks of rent then you would have to compensate them for their loss. However, this is a really hard thing to show since properties take highly variable amounts of time to let. They might be able to do so if they could demonstrate that the person they actually let it to was looking at the time that they couldn't show it because of your failure to notify.