I am currently letting out my flat to my brother and 3 of his friends. Each of them (except my brother, obviously) paid a deposit of 1 month's rent which I paid into the deposit protection scheme.
2 of the flatmates have been really good and are staying on for another year. The last one has not paid any rent since April because he was saving to go on holiday. He has now moved out and a new tenant is due to move in next month.
Tenant #4 has said he isn't prepared to pay anything towards the missed rent and we are to take it out of his deposit. He has confirmed this in writing.
I've had a look at the statutory scheme and it seems that taking the rent out of his deposit is a bit of a nightmare- we have to register a dispute and go through an arbitration process etc which seems a bit much when he has confirmed to do this!
Given that there is a new tenant moving in who will be paying the same amount of deposit as tenant #4, would it be totally out of order to take this deposit as rent for the former tenant and then when the new tenant moves out, return the original deposit to him?
Otherwise, i guess DH and I will probably have to wait another year or just take the quite substantial hit...