I was a letting agent until very recently and I had the misfortune to take on tenants from hell.
The council paid a deposit which I registered with mydeposits. The tenant disputes the paperwork being received by themselves and I have mislaid the signed copy.
Because of the abuse I received from the tenant (he threw me out of the rental property), I stopped working for the landlord and transferred the deposit into the DPS so that I didn't have to deal with them directly, (not immediately).
There were issues with the property and it was agreed to pay compensation and to refund the deposit. Compensation was paid by the landlord via my bank and the DPS refunded the deposit in full.
The tenants have been issues a section 21 as the year tenancy runs out on 8th September.
The landlords have apparently received a letter from the council saying that the section 21 is invalid as the deposit wasn't registered properly (which it was) but I understood that, in any case, as the deposit has been refunded it can no longer be regarded as an issue for court proceedings or otherwise.
The deposit was returned before the section 21 was issued. Does that make a difference