Deposit protection has been required since 2007. The rules are not complicated. The penalties for getting them wrong — 1 to 3 times the deposit amount — are substantial and consistently enforced.
Landlord Compliance Management →Key facts at a glance
Section 213 of the Housing Act 2004 requires landlords who receive a tenancy deposit for an assured shorthold tenancy to protect it in a government-approved scheme within 30 days of receiving it. The same 30-day period applies to the service of prescribed information on the tenant and any relevant person — such as a guarantor or parent who paid the deposit on the tenant's behalf.
The requirement applies to the landlord, not to the agent. If a letting agent takes the deposit on the landlord's behalf and fails to protect it, the legal liability rests with the landlord. This is one of several reasons why landlords using agents need to verify that deposit protection is being handled correctly, not simply assume it is.
The 30-day clock starts when you receive the deposit — not when you sign the tenancy agreement. If you receive the full deposit before the tenancy starts, the clock is already running. Many landlords miss the deadline because they count from the tenancy start date rather than the date of receipt.
All three are free to use for basic deposit protection. Landlords and agents can choose which scheme to use. For most landlords managing their own properties, the custodial DPS is the simplest option — no premium, no deposit held in the landlord's account, and the scheme handles the return process.
| Scheme | Type | How protection works | Dispute service |
|---|---|---|---|
| Deposit Protection Service (DPS) | Custodial | Deposit held by the DPS during the tenancy. Returned directly to landlord or tenant on resolution. | Free adjudication service. Evidence-based decision. |
| MyDeposits | Insurance | Landlord or agent holds the deposit. Pays insurance premium to MyDeposits. Deposit insured. | Free adjudication service. Landlord must repay if ordered. |
| Tenancy Deposit Scheme (TDS) | Both available | Custodial: TDS holds deposit. Insured: landlord holds deposit, pays insurance premium. | Free adjudication service. Used by many letting agents. |
| Requirement | Deadline | If missed |
|---|---|---|
| Protect the deposit in an approved scheme | Within 30 days of receipt | Tenant can apply to court. Penalty of 1–3× deposit. Cannot serve valid Section 21. |
| Serve prescribed information on tenant | Within 30 days of receipt | Same penalties as failing to protect. Serving late PI does not cure failure to protect in time. |
| Serve prescribed information on any relevant person (guarantor, parent who paid deposit) | Within 30 days of receipt | Incomplete prescribed information service. Penalty liability remains. |
| Re-protect if tenancy renewed with new fixed term | Within 30 days of new tenancy start | Original protection may not cover the new tenancy. Fresh PI must be served. |
| Confirm protection continues into statutory periodic tenancy | At point of becoming periodic | In most cases protection continues automatically — but confirm with scheme and re-serve PI to be safe. |
| Return deposit within agreed timeframe at end of tenancy | Within 10 days of agreement on deductions | Tenant can raise dispute. Scheme adjudicates. Interest may apply. |
Use the scheme's own prescribed information template. Complete it in full. Obtain a record of service — either a signed receipt from the tenant or proof of posting. Keep a copy.
Prescribed information is not the same as the deposit protection confirmation from the scheme. Protecting the deposit and serving PI are two separate obligations.
Partial prescribed information is the same as no prescribed information. Prescribed information that is incomplete — missing required fields, referring to the wrong scheme — does not satisfy the requirement. The court will treat inadequate prescribed information as a failure to serve it at all.
This creates a new tenancy for deposit protection purposes. The deposit must be re-protected (or its protection confirmed) and fresh prescribed information served within 30 days of the new tenancy starting. A landlord who protected for the original tenancy but does not re-protect for the renewal is non-compliant from the start of the renewal period.
The deposit protection from the original tenancy generally continues. The courts have confirmed that a landlord who protected at the start and served compliant PI does not need to re-protect when the tenancy becomes periodic. Best practice: re-serve the prescribed information at conversion, and confirm with the scheme that protection continues.
All new tenancies will be periodic from the start — removing the fixed-term renewal complication for new tenancies. The fundamental 30-day obligation to protect and serve PI does not change. The three approved schemes remain in place.
| Breach | Consequence |
|---|---|
| Deposit not protected within 30 days | Court order to protect deposit or repay it. Penalty of 1–3× deposit amount. Payable to tenant. |
| Prescribed information not served within 30 days | Same penalty as failure to protect: 1–3× deposit. These are separate breaches, each attracting a separate penalty. |
| Prescribed information incomplete or incorrect | Treated as failure to serve. Same penalties apply. |
| Deposit not re-protected on renewal of fixed term | Non-compliance from renewal date. Tenant can apply to court for penalty in respect of renewal period. |
| Section 21 notice served while deposit unprotected | Notice invalid. Possession proceedings cannot proceed. |
| Deposit not returned within required timeframe at tenancy end | Tenant can raise dispute. Adjudicator determines deductions. Scheme enforces return. |
The penalty is 1 to 3 times the deposit — the court decides the multiplier. The court considers the landlord's conduct, whether there was deliberate non-compliance, and how quickly the landlord remedied the breach. The minimum penalty is one times the deposit — on a £2,000 deposit in a typical rental property, that is £2,000. Protecting late after being challenged is a different position from never protecting at all — but both face a penalty.
Our landlord compliance management service handles deposit protection, prescribed information, and renewal compliance as standard. Available nationwide for landlords who want the compliance handled correctly without having to track it themselves.
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