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Are you confirming in all cases you need to return deposits in full before serving S21? I have never returned a deposit whilst tenant in occupation. What if they owe lots of arrears and the property is ruined? How could you return the deposit?
If Insure the deposit should Insure it in both names on the tenancy agreement. As not both parties paid the deposit it was just one of the tenants - I am unsure jjust to insure her name as she paid in full or both tenants that are on the agreement