So i have received an email saying they plan to lodge a form 6 application with the local magistrates court. they say my contract is void and that in the eyes of the law they are considered lodgers and not covered under tenancy law but rather have to go through small claims court through the local magistrate.
I have done a bit more digging and will be challenging this.
I believe the comments made by joanmc seems to look like she could have a point, and you may lose this one, and that is not even going into the can of worms that you (or the tenant) could open up if it goes further. Perp has very good points. I don't know what a Form 6 is, but I would be quickly asking that they stop proceedings and give the bond back... and learn from it.