Deposit Protection for Landlords UK

If you take a deposit from a tenant under an assured shorthold tenancy in England or Wales, you must protect it in a government-approved scheme within 30 days of receiving it, and give the tenant a set of "prescribed information" within the same 30 days. This is not optional or something you can do later once things settle down. Missing the deadline, even by a few days, exposes you to a court claim and can block you from serving a valid Section 21 notice until the position is put right.

The rules themselves are not complicated once you understand the two types of scheme and the specific information you need to hand over. Where landlords most often go wrong is in the deadline, in choosing the wrong scheme type for how they are actually holding the money, or in providing incomplete prescribed information.

Legal duty

The duty to protect a deposit comes from the Housing Act 2004, as amended by the Localism Act 2011 and the Deregulation Act 2015. It applies to deposits taken under an assured shorthold tenancy (AST) in England and Wales. If you take a deposit, you must protect the full amount in an authorised scheme within 30 days of receiving it, regardless of whether you manage the tenancy yourself or use a letting agent, since the underlying duty sits with the landlord.

This duty applies each time a new deposit is taken, including when an existing tenant renews onto a new fixed term and pays a fresh deposit, or when a deposit is increased partway through a tenancy. It does not apply to deposits taken for tenancies that are not ASTs, such as most lodger arrangements where the landlord lives in the property, though other good practice around holding money fairly still applies in those cases.

The maximum deposit you can take is also capped by the Tenant Fees Act 2019, at five weeks' rent for tenancies where the annual rent is below a threshold set out in that legislation, or six weeks' rent above it. Taking more than the permitted cap is itself a breach separate from the protection duty, so check both the amount and the protection deadline when a new tenancy is set up, rather than assuming that protecting whatever amount was collected automatically satisfies both rules.

Schemes overview

There are two structural types of deposit protection in England and Wales:

• Custodial schemes, where you pay the deposit to the scheme, which holds the money for the duration of the tenancy and pays it out according to the agreed outcome at the end.
• Insurance-based schemes, where you (or your agent) keep hold of the deposit yourself, but pay a fee to insure it through the scheme, which underwrites the arrangement and steps in to resolve disputes.

Three schemes are currently approved to protect deposits in England and Wales: the Deposit Protection Service (DPS), mydeposits, and the Tenancy Deposit Scheme (TDS). The DPS offers a custodial option that is free to use since the scheme itself holds the money, while mydeposits and TDS are more commonly associated with the insurance-based route, though scheme offerings can change, so check current details on the scheme's own website before choosing one. Whichever scheme you use, the deposit itself is protected, and the choice mainly affects who physically holds the money and how disputes are administered.

Prescribed information

Alongside protecting the deposit itself, you must give the tenant the "prescribed information" within 30 days of receiving the deposit. This typically includes:

• The amount of the deposit and the address of the rented property.
• Which scheme is protecting the deposit, and the scheme's contact details.
• Your name and contact details (and your agent's, if you use one).
• The circumstances in which some or all of the deposit may be retained at the end of the tenancy.
• How to apply for the release of the deposit at the end of the tenancy.
• What to do if there is a dispute about how the deposit is being divided.
• Confirmation that the information given is accurate, and that the tenant has been given the scheme's leaflet explaining how the process works.

Most schemes provide a template or an automated process that generates this information for you when you register the deposit, which reduces the risk of missing a required element. Even so, it is worth checking the output against the requirements above rather than assuming the template alone guarantees compliance, since the prescribed information must actually be given to the tenant, not just generated and left unsent.

Keep evidence that you gave the tenant this information, such as an email with the document attached and a read receipt or acknowledgement, or a signed copy if you handled it on paper. If a dispute over the deposit ever reaches a scheme's adjudication service or the court, being able to show exactly what you sent and when is far more useful than simply asserting that you followed the process correctly.

Deadlines

The headline deadline is 30 days from the date you receive the deposit to both protect it in a scheme and serve the prescribed information. These are not two separate 30-day windows, they run from the same starting point and both need to be done inside it. If you receive a deposit on the day a tenancy is signed but before the tenant moves in, the 30-day clock starts from receipt of the money, not from the tenancy start date or the day the tenant takes occupation.

If a deposit is topped up or replaced during a tenancy, for example because rent has increased and the deposit is adjusted to match, the 30-day duty applies again to that new sum from the date it is received. Treat every deposit receipt as triggering its own 30-day deadline, rather than assuming an earlier protection covers a later top-up automatically.

Consequences of failure

If you fail to protect a deposit or fail to serve the prescribed information within 30 days, a tenant can apply to the county court, which can order you to either protect the deposit or return it, and can additionally order you to pay the tenant a penalty of between one and three times the deposit amount. This penalty is on top of returning the deposit itself, so the financial consequence of getting this wrong is disproportionate to the administrative effort it takes to do it correctly at the time.

Beyond the direct penalty, you cannot serve a valid Section 21 notice seeking possession while a deposit remains unprotected, which can leave you unable to recover the property through that route until the position is corrected. The wider landscape around Section 21 itself is changing under the Renters' Rights Act, so check our guide to the Renters' Rights Act for the current state of play on possession grounds generally. For everything else you are required to do around the start of a tenancy, including tenant vetting, see our right to rent checks guide and our broader landlord legal responsibilities guide.

How Property HQ helps

Property HQ tracks which scheme each deposit is protected with, the date it was received, and your 30-day deadline for protection and prescribed information, so a new tenancy does not slip past this window unnoticed. Combined with your other compliance dates, it gives you one place to confirm a tenancy is fully set up correctly before the deadline passes.

Disclaimer

This guide is general information for UK landlords, not legal advice. Deposit protection rules apply to England and Wales and can change over time. Check GOV.UK and your chosen scheme's website for current requirements before relying on this guide.