Advice on issue with a guest

[Elonm0]

Hi everyone, I would like some advice on the best way to handle this situation:

a guest automatically booked 2 rooms inside of my house where I live. The listing shows it’s two rooms inside of a house, and not the entire house. 
It just so happens that I was out of town on the dates they booked the rooms. Therefore, when I communicated with the guest I let her know that I was out of town and that they would have the entire house for themselves. 
I forgot that my live-in nanny would return from her trip on that weekend. So the guest was understandably upset when they realized there was someone in the house on the second day of their stay. 
they requested a refund for the last night as they chose to pack up and leave.

they threatened to call the police if they did not receive a refund within 24hrs. 

I simply apologized for the miscommunication, reminded her that the booking she had was for two rooms inside a house and that she had not paid for the entire house, but only for two rooms inside a 4bedroom house. I let her know I would refund her for the last night. I already submitted her refund. 

How could I have handled this situation better?

[Marie8425 · Accepted solution]

@Elonm0 

I am very sorry but in this case you saying she had the whole house changed the agreement, not the Guest.  To have a stranger to the guest ( the nanny) access space unexpectedly would be a very uncomfortable experience especially if the Host is not available.  

In this situation I would refund as the Host  I made the error and I would expect a very negative review,  I am sorry but a bad mistake.

[Elonm0]

Thank you for your feedback. I refunded her.