Dear Sir/Madam,
I have several issues that I would appreciate your advice on please.
My daughter has just signed (renewed) a 12 month tenancy that incorporates a 2 month termination notice clause by either side.  The contract payment periods start/terminate on the 2nd of the month. A week ago (around the 2nd April) the landlady verbally informed my daughter by phone that she is now putting the house on the market and that she was giving her notice to vacate. A subsequent recorded phone call by the landlady confirmed this.  No S.8 or S.21 notice in writing has been received from the landlady. Estate agents and the landlady have since visited the house. 
My daughter was left with no option other than to rapidly look for new rented accommodation, particularly as she has a dog and two cats (difficult to find).
On receiving this verbal notice my daughter has now found an alternative property to rent from 2nd May.  She informed the current landlady in writing (confirm received on 10th April 2008 ) that she has found this new letting and wishes to vacate her property and close the tenancy on 2nd May 2008, not 2nd June.
The landlady has responded verbally to say that she is entitled to retain the deposit to cover the 2nd month of tenancy (included the period 2nd May to 2nd June) since in her opinion my daughter is leaving earlier than the 2 month notice period.
In view of the sudden note to sell and quit the property, no written notice given and, the fact that a 12 month contract has only just been signed, is the landlady entitled to retain this deposit of £700 that more than covers the monthly rental of £550?
many thanks
Paul