Here is the current issue I'm having:

My friend and I decided to sublet a room in an apartment together for the months of July and August. We paid our July rent, along with a 1000$ security deposit. It was verbally agreed that we would be staying from July 1 until the end of August (this can be proven via emails). I got a call yesterday from the guy we're subletting from saying he has a "family emergency" which he refuses to go into any detail about, and that he needs our room. He is giving us until Aug 1 to move out.

We are in the state of NY, in NYC, so what is the law governing verbal agreements here? Both my roommate and I are witness to his agreement, and we have emails to back us up. We also had us all sign a piece of paper saying that the security deposit would be returned when we moved out. I don't believe that he is on the lease, and he said that if we had any problems to take it up with the woman who lives downstairs who is on the lease. She has the final say.

What are me and my roommates legal rights?

Without anything in writing they can give you 2 weeks notice, but it must be in writing and have a date and witness signature, and the security deposit must be returned within 45 days... this may very from state, but its more so guilkdlines I would look on the net for more details or phone the "landlord and tenant act"

But do verbal agreements hold no power in this type of situation? And can they kick us out without any reason?

Saying family emergency is their reason, and you can take them to small claims court, but because it was verbal the judge may go with them because you have no proof of a lease, but I still would get the best answer from the landlord and tenant act, they know exacally how it works where you are