My tenants recently told me that they have separated. He has moved out and she is staying on as a single tenant, and it is my understanding (by default) that the deposit should carry over to the new tenancy.
There will be deductions from the deposit as there was a fire during the original tenancy. This will take about half the deposit.
He contacted me to say he wants his share of the deposit back. When I spoke to her about it, she said that she paid most of the deposit and that I shouldn't engage with him about this.
I don't want to get involved in a dispute between the two of them but I suspect this might be inevitable. If I return some part of the deposit to him, she will say that she has paid the deposit and I have chosen to give some of it away, and therefore argue that she is entitled to have the deposit returned at the end of her tenancy. On the other hand, if I don't return any of it, he may have a claim against me for his share.
I'm sure this must have happened before, so what should the landlord do in these circumstances?
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