He can apply security deposit to unpaid rent. If you never signed the lease, you should not be liable for rent for the balance of the lease. Not sure what else he claims you owe. Did he handle the security deposit properly? Seaparate interest bearing account with notice to you where it was being held? If he violated all the quirks of the security deposit law, he could be liable to return it or pay you three times it, so you may have leverage there to offset whatever he claims.
To questioners from West Virginia & New York: Although I am licensed to practice in your state, I practice on a day-to-day basis in Massachusetts. I answer questions in your state in areas of the law in which I practice, and in which I feel comfortable trying to offer you assistance based on my knowledge of specific statutes in your state and/or general principles applicable in all states. It is always best, however, to work with attorneys and court personnel in your own area to deal with specific problems and factual situations.
If you were a tenant and your name was on the lease, you or the friend's parent may be liable for any penalties for moving out early and without notice or your landlord may be seeking additional monies for any damages to the unit if your last month's rent was paid with your security deposit. Even if you were a tenant at will, you would still be required to give 30 days notice or the rental period whichever is longer and the same analysis of additional monies above applies. As my colleague's answer mentioned, any interest earned on your security deposit during the tenancy is something you are entitled to. Before giving your landlord any more money, you should review the terms of your lease agreement and consult a landlord tenant attorney for further information or assistance and to determine what rights and remedies you may have. Best of luck.
Please be sure to mark if you find the answer "helpful" or a "best" answer. (It lets us know how we are doing.) Attorney Kremer is licensed to practice in Massachusetts. Please visit her Avvo profile for contact information. In accordance with Avvo guidelines, the following disclaimer applies to all responses given in this forum: The above is NOT legal advice, and is NOT intended to be legal advice. No Attorney-Client relationship is created through the above answer.