It certainly could be legally binding. The issue is probably one of proving it, which might depend on testimony, witnesses, etc. You may also have other arguments to make about compensation - for example, if the work that the tenant has done was actually the legal responsibility of the landlord, then it may not matter as to whether there was an oral contract since a court could determine that the tenant is entitled to damages for the landlord's failure to make repairs. I would suggest you speak with an attorney about the facts of the situation and evidence you have that you did the repairs and that they were necessary.
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You can sue on this. Winning is another thing. It depends on the amount.
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The tenant can probably win on this suit. There's no basis for tenants to "do favors for" landlords, and Mass. law is very biased towards the tenants.
Contact a landlord/tenant attorney.
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