When should deposit be returned?

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    When should deposit be returned?

    Our tenants wished to leave a 6 month tenancy agreement early. We agreed to release them early under these terms: they would be responsible for rent and household bills until the day a new tenant moved in or the end of the original 6 month tenancy, whichever was the soonest.

    The tenants have moved out and returned keys to the agent 2 days before new tenants were supposed to move in. However, letting agent advised that references for the new tenants failed so the property is now empty. The old tenants want their deposit back as they have returned the keys and argue that they have therefore ended the tenancy agreement.

    My view is that technically the old tenants are still the tenants and could take the keys back again if they wanted. Ex tenants want the deposit back now. Should I do this or should it be returned when the early release terms are fulfilled (above)?

    Ex tenants have said they will take us to court if we don't give the deposit back now.

    Letting agents are pretty hopeless and I think this is all down to poor communication between agents and tenants. We will be getting new agents after this episode is over.

    #2
    Did they hand the keys back at yours or letting agents request?

    Was a final inventory carried out?

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      #3
      I think you are right, they are still bound by the terms of the tenancy agreement and could ask for the keys back at any time.

      But on the other hand, if they have put it all in writing that they will vacate the property, return the keys and still continue to pay costs until a new tenant is found, then why would you still want to retain the deposit?

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        #4
        Letting agent and tenants handled all correspondence regarding when they would move out in time for new tenant to move in - therefore request to hand keys back was letting agent's. However tenants kept changing their move out date: originally said they wanted to end tenancy early on 28/2, then they changed this to 31/3 then 2/4. Now they are saying i they had known new tenant had failed references they wouldn't have moved out.

        Anyhow, all that is under the bridge now and probably irrelevant. I simply need to know if I need to give the deposit back now or when tenancy is officially over. I can't think of a reason to keep the deposit but don't want to make a mistake and find out that because I've given it back that means I've agreed to the tenancy being over now......

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          #5
          Property is let unfurnished and final inventory and check was carried out by the agents on 2/4 when keys were handed back.

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            #6
            If all was OK with the check out, then your only risk is that they will not continue to pay the rent until the new tenant moves in.

            In fairness, the deposit should not be used to cover missing rent, but you can never be sure that once they have thier deposit back that they will continue to pay.

            I would hold on to it for now. ( Others may disagree! )

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              #7
              That's exactly what I was thinking although I know you're not supposed to use deposit against rent!

              I think I'm getting to the stage where I'm just glad they're gone, want to draw a line under it and if I forfeit the remaining rent then I'll put it down to experience! - In retrospect suppose I could have refused to agree to early release form the agreement but I probably wouldn't have got any rent at all from that point on!

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                #8
                OK. But don't forget they are chasing you for the return of the deposit. Fair enough. But you can also chase them for the rent when it becomes due!

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                  #9
                  My opinion only:

                  I would use 2/4 as end of tenancy. Tenants have probably dealt with utility bills etc. up to that date. If they owe you money, ask them if they wish you to take it out of deposit and then return the remainder to them once any money they owe you is paid. In all fairness, they did move out in good faith.

                  If they were to take keys back, things could get messy (worst case scenario, they may not get out when you want them to, therefore court case, eviction etc. - yuk)

                  Is there much time left of the 6 month AST?

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                    #10
                    [QUOTE=DianeB;39309]

                    If they were to take keys back, things could get messy (worst case scenario, they may not get out when you want them to, therefore court case, eviction etc. - yuk)


                    Good point !

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                      #11
                      6 weeks left.

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                        #12
                        Originally posted by Colincbayley View Post
                        In fairness, the deposit should not be used to cover missing rent
                        Why not, providing the AST includes a clause stating that this?

                        When I recently evicted a tenant for non-payment of rent - her final debt was about £1900 IIRC, would you seriously have had me hand her a cheque for £650, being her deposit, as I took the keys back? It would have almost been worthwhile doing just to see the incredulous look on her face (well no, not really...!)

                        Comment


                          #13
                          [QUOTE=Ericthelobster;39318]Why not, providing the AST includes a clause stating that this?

                          No reason at all, as long as it is in the AST!

                          And even if it's not, I would think most landlords would use the deposit to cover missing rent.

                          Maybe, that's why some tenants feel it is OK to do the same with the last months rent.

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