I Have the Keys to a Commercial Property but No Lease?

My husband and I went to see a space for rent for a Hair Salon,we loved it and the landlords loved us. The landlord like us so much she loaned my husband 5,000 dollars to purchase Equipment And he has spent his saving of 2000.00 on other necessities. This was July 21, 2010. The salon is now completely furnished and painted all advertising has been put out (flyer's,Business cards etc…) We originally agreed verbally to a 3 year lease with an option to buy. Now the landlord states she only wants a month to month and has yet to give a a lease to give to give to the health department. We have done everything else with the city (state Connecticut). She states that if she doesn't want us there she will just change the locks and we can do nothing we have invested so much, we have two employees prepared to start on the 1st. Can we sue? What Happens to the 7,000 plus dollars put into it What should we do? HELP

Suggestion:

You can't sue someone for not entering a contract with you. You also can not force her into a 3 year lease actually selling her property to you. She wants a month to month lease, take it or leave it.