Thanks for your question. I will try to help.
The difficulty is that of you agreed a fixed term (for example that she could stay for 6 months) then her tenancy will be regarded as an assured short hold tenancy even though you did not have anything in writing.
This gives her certain rights, which I suspect you might not be aware of. If you took a deposit the deposit must have been lodged into a tenancy deposit scheme in order to protect the deposit. This is applied very strictly and all tenant’s deposits must be lodged in this scheme.
If she has now left the property and her occupation has finished then unfortunately you will have to return the whole of the deposit to her without deductions. This is because you have not lodged the tenancy in a government backed tenancy deposit scheme. In such circumstances she could apply to court for the return of the whole deposit and potentially a fine payable by you to her of three times the deposit amount. This is as a result of landlord historically abusing tenant’s deposits and there is really no flexibility in these circumstances.
If I were in your position I would return the whole of the deposit to her and just leave it there, because if the dispute becomes acrimonious then she may seek advice and be told that she can apply to court for the return of the whole of the deposit and potentially also a fine of three times the deposit amount payable by you and obviously this will leave you in a much worse financial position. You would also have to put up with the hassle of court proceedings which is obviously something that you would wish to avoid.
In future I would read up on tenancy deposits on the following link, to avoid the same honest mistake happening in the future.
I am sorry.
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