New tenant changed their mind?

Give them their money back and move on, you'll get enough challenges in this industry it's not worth your time to mess around with this.

If you force a different path then it all gets very messy. Worse, if they moved in then destroyed the property. Caged or trapped tenants are hell.

If haven’t paid agents fee in finding these tenants then just let them go. What’s the point in holding onto unhappy tenants this could turn out to be a real ongoing problem.
If you have paid agents fees then you will need to highlight this to them and negotiate.

Hi Maureen,
Welcome to the world of renting.

I can only echo previous comments.

If you have incurred any costs such as agency fees etc. then it might be worth asking the tenant to contribute. There is an option with DPS to enter a claim against paying all of the deposit back.

Just depends how much potential aggravation you want.

Good luck and don't let it put you off.

For your own well-being and that of your wallet, court action should always be a last resort. Pay them back, minus any reasonable cost you incurred, and move on finding a new tenant. If it's a decent property you should have no problem reletting and the rent may have even risen in the meantime!

We have just had exactly the same thing with a house (as agent). I am not very happy with the tenants as they had plenty of time to revisit the house - they live locally to it and only decided it was not right after they had signed and got the keys.

We will not be difficult with them and have remarketed, but on the basis that the landlord cannot be out of pocket.

If they've signed a tenancy agreement, (not as a deed), then they have a contract, but not a tenancy. Under these circumstances you have the right to keep rent until you are able to find a new tenant, but you are required to mitigate your losses, which means finding someone as soon as possible.

If they haven't yet contracted with you, then you have to refund everything.

Never ask a tenant to find a replacement. Finding the right tenant is the most important job a landlord has.

Agreed with all comments above. Can’t say I’ve had this situation before so just out of interest what is the legal process/paperwork required?

Is it as simple as getting the tenant to sign a deed of surrender and handing keys back?

If you wanted to pursue fees incurred do you put in a claim on the DPS or can you take it from the first months rent instead and return the deposit in full? (I assume the latter is the safest option).

I can't say for certain but I think you could be opening up a real can of worms if you try to take some money from deposit or first months rent and it (taking the money against their will) is not contractually legally tight (which is for you to find out)
There is 6 year period for this to bite you back (IIRC 6 years to do deposit claim legalities) so I'd just clean break the whole thing and get out nicely, even a deed of surrender can be tricky. They didn't have keys? didn't move in ? .
Don't be under too many illusions we (as landlords) have many rights or sympathies of the courts, don't presume you can just help yourself to their money. I'm saying this nicely btw, all you need is a bad egg and it'll incinerate you.

I agree with everyone else. A disgruntled tenant is a problem one. Be glad they've gone and refund them, and consider yourself lucky to have dodged a fussy, complaining tenant. Absolutely do not let them find the next tenant as they won't have your interests in mind. Personally I'd refund everything to get them out of my hair.

You do not let the tenants find a replacement tenant. That is your job.

If the reason for them deciding not to move in is a valid one and one that they couldn’t have seen before signing, let them go.

If the reason is not important, couldn’t easily be fixed then I’d consider keeping the one months rent and the deposit. This is what it would cost them under the proposed, new Assured Tenancies (Renters Right Bill)