Tenancy Deposit Protection: A Landlord’s Guide Under the New Rules

1. The five core rules

• Protect the deposit within 30 days of receipt, in one of the three government-approved schemes.
• Serve the prescribed information on the tenant within 30 days of receipt.
• Respect the deposit cap (five weeks’ rent where annual rent is under £50,000; six weeks’ rent where annual rent is £50,000 or more).
• Return the deposit within 10 days of agreement on deductions at the end of the tenancy, or follow the scheme’s adjudication process.
• Only take a holding deposit of up to one week’s rent, and return or apply it as required by the Tenant Fees Act 2019.

2. The three approved schemes

There are three government-approved tenancy deposit schemes in England:

Each scheme offers both a custodial option (the scheme holds the money) and an insurance-backed option (the landlord holds the money and pays a premium to the scheme). The protection deadline (30 days from receipt) is the same regardless of which scheme or option is chosen.

• The Deposit Protection Service (DPS)
• MyDeposits
• The Tenancy Deposit Scheme (TDS)

3. Prescribed information

Protecting the deposit is only half the obligation. Within 30 days of receipt, the landlord must also provide the tenant with prescribed information, which includes:

Each scheme provides a template prescribed information form. The tenant (and any relevant person who paid the deposit on their behalf) must sign to confirm receipt.

• the amount of the deposit
• the address of the property
• the name, address and contact details of the landlord and of any agent
• the name and contact details of the scheme
• the scheme’s procedure for return of the deposit at the end of the tenancy
• the dispute resolution process
• circumstances in which all or part of the deposit may be retained
• a certification by the landlord that the information provided is accurate

4. The deposit cap

Under the Tenant Fees Act 2019, deposits are capped at:

The cap is calculated on the annual rent at the start of the tenancy. Asking for more than the cap is a prohibited payment under the 2019 Act and exposes the landlord to enforcement action by the local authority, as well as the tenant’s right to claim repayment.

• five weeks’ rent, where annual rent is less than £50,000
• six weeks’ rent, where annual rent is £50,000 or more

5. Penalties for non-compliance

Failure to protect the deposit within 30 days, or failure to serve the prescribed information within 30 days, exposes the landlord to a financial penalty of between one and three times the deposit amount, awarded to the tenant (or the relevant person who paid it) on a court application. The penalty applies per tenant in a joint tenancy, so for a shared house with four tenants the exposure is multiplied accordingly.

The penalty is separate from and in addition to the return of the deposit itself.

6. How the Renters’ Rights Act 2025 changes the picture

The Renters’ Rights Act 2025 does not amend the Housing Act 2004 rules on deposit protection directly. The 30-day deadline, the approved schemes, the cap and the prescribed information requirements all remain as they were. What has changed is the consequence of non-compliance for possession purposes.

Under the pre-Act regime, the Deregulation Act 2015 rules meant that a Section 21 notice was invalid where the deposit had not been protected and prescribed information served. With Section 21 abolished from 1 May 2026, that particular trap disappears. But the government has clarified that, under the new regime, most Section 8 possession grounds also require the landlord to show that the deposit was properly protected and prescribed information provided. A court will not grant a possession order where deposit compliance has not been met.

In practical terms, deposit compliance is no longer a barrier only for “no fault” possession: it is now a precondition for recovering possession at all on most grounds. A landlord with an unprotected deposit who needs to recover possession because they want to sell (Ground 1A), move in a family member (Ground 1) or enforce rent arrears (Ground 8) will face the same obstacle they previously faced on a Section 21 claim.

7. What to do if the deposit is unprotected

The right course depends on the circumstances, but some general points hold:

Where the position is uncertain, the sensible step is to take legal advice before serving any notice.

• Protecting the deposit late does not cure the penalty exposure already incurred.
• Returning the deposit to the tenant before serving a Section 8 notice removes the protection obligation and, in practice, removes the bar to possession on that particular ground.
• Deliberately returning the deposit to then seek possession is likely to be scrutinised, and does not remove the tenant’s right to seek the statutory penalty for the original non-protection.

8. End of tenancy

At the end of the tenancy, the landlord should:

Deductions can only reflect actual losses (unpaid rent, damage beyond fair wear and tear, cleaning costs where there is a demonstrable breach, and so on). They cannot be charged as flat fees for administrative convenience.

• inspect the property against the inventory agreed at the start
• propose any deductions to the tenant in writing, with supporting evidence
• agree or refer to the scheme’s dispute resolution service
• return the deposit (or the undisputed portion) within 10 days of agreement

9. Pet damage and pet deposits

Under the Tenant Fees Act 2019, a landlord cannot charge a separate pet deposit, pet fee, or pet damage insurance. The standard deposit is treated as covering pet-related damage within the normal cap. The Renters’ Rights Act 2025 preserves this position while introducing the tenant’s statutory right to request to keep a pet.

10. Company lets and other exceptions

The deposit protection regime and the deposit cap apply to assured tenancies. A company let (where the tenant is a limited company rather than an individual) is outside the Housing Act 1988 and therefore outside the deposit protection regime. Landlords letting to corporate tenants are not legally required to protect deposits, though many do so voluntarily. Always check what the tenancy agreement says, and whether the arrangement is genuinely a company let or an assured tenancy with a company guarantor.

11. Practical checklist

• Deposit protected within 30 days of receipt
• Prescribed information served within 30 days of receipt
• Amount within the five- or six-week cap
• Certificate of protection and prescribed information retained on file
• Inventory and schedule of condition signed at the start of the tenancy
• Deposit returned within 10 days of agreement on deductions at the end