I maintain it’s not an HMO?

The way I read it, if she isn’t legally a joint tenant then she is there under license, which confers no rights of occupancy. These are the only two options I believe are realistic considerations given the facts as you’ve explained them. (Without having seen the ast, and assuming you haven’t left out any important facts).

The original tenants have a written AST for a term for the entire property. My understanding is that in order to add a new tenant and remove the outgoing tenant the current tenancy should be ended by mutual agreement (ideally in writing) and a new agreement signed. As this wasn’t done it suggests that she ISN’T a joint tenant.

Obviously this isn’t as clear cut as one might wish as, if a party wanted to, they could make an argument that the actions of all the parties showed an intent to end the original ast and to create a new unwritten ast on the same terms as the previous agreement with the new occupants as tenants, thereby making the new girl a joint tenant. I would probably suggest this is tricky for a court as they have an ast in writing which is clear cut and claiming a subsequent verbal agreement to end this agreement and create another muddies the waters.

I’ve assumed that as you have a single ast for the entire property your tenancy agreement stipulates one monthly rent for the property as a whole and that it was your tenants, and not you who found this replacement tenant/lodger(?)

Given that the above assumptions are accurate it isn’t possible for the new occupant to have a second separate tenancy with you, when another tenancy for the property as a whole already exists.

You either accept that the new occupier is a joint tenant (which Tessa has cast doubt on and as a qualified expert in this area I accept her judgement), or she is there as a lodger (which is a form of licence). Essentially she is living there with permission of the existing tenants and yourself, but can be asked to leave by the current tenants at any time.

Either option puts you in a strong position. You should communicate the position clearly to all occupiers. The existing tenants are going to bring pressure to bear if they realise they will be financially liable for double rent if this person chooses not to leave. Presumably they were the ones who accepted her into the property in place of the outgoing tenant and they can be made to take responsibility financially if she refuses to vacate when she should.

As an aside, you don’t need to issue a s21 as the tenants have given written notice and you have formally accepted that notice. If this girl is not a tenant then again, no s21 is required as she doesn’t fall under the protection of the Landlord and Tenant Act 1954.

Just to be clear ensure you do have their notice in writing and that you have responded to them in writing acknowledging their notice. It just makes sense to dot the ‘i’s and cross the’t’s.