UK Landlord Forum / Life

To be clear from the outset I had not put my tenants deposit into a protected scheme. I now know this is wrong. After 9 months of tenant paying late even though in receipt of housing benefit she has now decided that she can't afford to live in the house anymore and has not paid her rent which was due on the 10th of Feb. I wrote saying that she was in arrears and that her rent was to be paid. I also wrote acknowledging that she wished to leave but she needs to give formal notice  (from 10th march until 10th april) and her rent is payable until that date, the deposit was not to be used as rent. I would try and let the house out as soon as possible,I have concerns that the house will not be left in a good state (it was completely renovated prior to her moving in) she has now written to me saying she is leaving on the 13th March and has taken advice from citizens advice and can take me to court over the deposit scheme. "in light of this , I ask for you to release me from my contract early". If I agree can she still take me to court over the deposit scheme or can I protect it now? - rather late in the day but she is not going to pay the last months rent and I am fairly sure that I am going to incur costs on the property. I know now that I should have protected her deposit and ignorance is no defence.

What you say is correct.

If you are to come to a deal of some kind - whereby you allow her to leave early in return for her not making a claim against you for non-protection - then just make sure you get it all documented properly. Like "in full and final settlement" etc.. The document used must be signed, you must give the Tenant time to read it, I might even get it witnessed to be sure.

Obviously, as you say, what you don't want is for this threat to cause you to act and then you end up on the receiving-end of a claim anyway.

Which could easily happen if there is no binding agreement... as they are separate and distinct matters, after all.

You can't do anything with the deposit now to protect yourself from a claim... you failed to protect it when it mattered and that will live with you. It's about making the best of a bad job.

She has 6 years to come after you
You are now exposed and you cannot prevent this even if you return the deposit.
You better get a solicitor involved if you are not comfortable doing yourself.
"Full and final settlement" I'm afraid won't be enough. 
You need to get her to agree to waive her rights pursuant to s213 and s214 of Housing. act 2004 etc
This should be done within a Deed of Surrender although if there is a waiver involved may not need to be a Deed but doesn't harm to do so.
If you didn't follow anything above then get the solicitor involved.

Count yourself lucky she is willing to go.

Best of luck.