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Court Action For Not Lodging Deposit

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Hi, We had a tenant who moved into a property and within the first week she said that her company would not pay for the rent and so would we be prepared to let her move out. We agreed to this pending us finding someone else to live in the property. We then re marketed it and tried to find someone else. After a further 2 weeks she then said she would like to continue living in the property so we agreed to this. At the end of the tenancy we did the move out and found lipstick on a carpet plus the carpet in the lounge was dirty, the table was also marked with pen and scratches. We told her we would have to charge her for these things to be put right and said we would contact her when we had quotes, the work came to 270 so we returned the balance of the deposit. She kicked off and found we had not lodged the deposit, this was because she had asked to move out before we had chance to do so and so we held it so we could give it straight back as the property was nice and we thought we would re let it quickly.
We have since returned the remainder of the deposit and said we would pay for the damge to be rectified.
She has taken us to court for not lodging the deposit so the question is when we agreed to allow her to leave the property did this then remove the requirement for the deposit to be lodged as the tenancy type had changed and also as we have fully repaid the deposit is it really worth going to court or should we just settle out of court?
Your help is much appreciated
30/09/2009 00:00

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