Tenancy Deposit Protection: Rules, Deadlines and Penalties

Tenancy deposit protection rules in England require a landlord to place any deposit taken for an assured tenancy in a government-approved scheme within 30 days of receiving it, and to give the tenant the prescribed information within the same 30 days. The deposit is capped at five weeks’ rent (six weeks where annual rent is £50,000 or more).

Updated 2 November 2026. Applies to England unless stated.

This guide covers England. Wales has its own deposit rules under the Renting Homes (Wales) Act, and Scotland and Northern Ireland run separate schemes. If your property is outside England, check the rules for that nation before relying on anything below.

Deposit protection has a short, hard deadline and a penalty the tenant can claim directly. Since 1 May 2026, getting it wrong also blocks possession on almost every ground. The rules are clear, and a simple routine keeps you safe.

The tenancy deposit protection rules at a glance

Which deposits must be protected

Under section 213 of the Housing Act 2004, as amended by the Renters’ Rights Act 2025, the duty applies to deposits taken in connection with an assured tenancy. Before 1 May 2026 the wording referred to assured shorthold tenancies. Now that ASTs have converted to assured periodic tenancies, the duty follows the tenancy into its new form.

A deposit means money intended to be held as security for the tenant’s obligations under the tenancy. It does not matter who pays it. GOV.UK confirms that protection is still required where a third party pays, such as a rent deposit scheme or the tenant’s parents.

A holding deposit taken before the tenancy agreement is signed does not need protecting. Once the person becomes a tenant and the money is kept as the deposit, it must be protected. Lets with annual rent above £100,000 sit outside the Tenant Fees Act deposit cap and may not be assured tenancies at all, so take advice before assuming any exemption applies to you.

Choosing a deposit protection scheme

There are three approved schemes in England: the Deposit Protection Service, MyDeposits and the Tenancy Deposit Scheme. Each offers two models, and the choice affects cash flow and admin.

Whichever you pick, the 30-day clock is the same. Our planned guide on custodial vs insured schemes covers the trade-offs in more detail.

The 30-day rule

Section 213(3) requires the initial requirements of the scheme to be met within 30 days beginning with the day the deposit is received. Section 213(6) sets the same 30-day window for the prescribed information. Both clocks start when the money reaches you or your agent, not when the tenancy begins.

Day one is the day of receipt. If a tenant pays on 3 November, day 30 is 2 December. Protecting on day 31 is a breach, even if nothing else goes wrong.

How to stay inside the deadline

1. Record the date and amount the deposit is received, and who paid it.
2. Register the deposit with your chosen scheme the same week.
3. Download the scheme certificate and keep it with the tenancy file.
4. Serve the prescribed information and keep evidence of service.
5. Diarise the 30-day deadline so a delay is spotted before it becomes a breach.

For worked examples and late-protection scenarios, see the planned guide to the 30-day rule.

Prescribed information: what you must tell the tenant

Protecting the money is only half the duty. Section 213(5) and (6) require you to give the tenant, and any relevant person who paid on their behalf, specific information in the prescribed form or a form substantially to the same effect. GOV.UK lists what it must include:

• the address of the rented property
• how much deposit has been paid
• how the deposit is protected
• the name and contact details of the scheme and its dispute resolution service
• your (or your letting agent’s) name and contact details
• the name and contact details of any third party who paid the deposit
• why you would keep some or all of the deposit
• how to apply to get the deposit back at the end of the tenancy
• what to do if the tenant cannot contact you at the end of the tenancy
• what to do if there is a dispute over the amount returned

Missing details or failing to serve a third-party payer can leave a protected deposit non-compliant. The planned guide to prescribed information walks through each item.

The deposit cap

The Tenant Fees Act 2019 caps the deposit at five weeks’ rent where annual rent is under £50,000, and six weeks’ rent where it is £50,000 or more. Anything above the cap is a prohibited payment.

How to calculate it

1. Work out annual rent: monthly rent multiplied by 12.
2. Work out weekly rent: annual rent divided by 52.
3. Multiply weekly rent by five (or six if annual rent is £50,000 or more).

Example: rent of £1,200 a month gives annual rent of £14,400 and weekly rent of £276.92. The maximum deposit is £1,384.61. Round down, not up, to stay safely within the cap.

Breaching the cap is enforced by local councils. The current statutory guidance for enforcement authorities sets a civil penalty of up to £5,000 for a first breach. A repeat breach within five years is a criminal offence, and the council can prosecute or impose a penalty of up to £30,000 instead. More detail sits in the planned guide to the deposit cap.

Holding deposits

A holding deposit reserves a property while you carry out checks. It is capped at one week’s rent and governed by strict rules:

• The default deadline to sign the tenancy is 15 days after you receive the holding deposit, unless you agree a different date in writing.
• You must refund it within 7 days if the tenancy is signed, you decide not to proceed, or the deadline passes.
• You may keep it only if the applicant fails a Right to Rent check, withdraws, fails to take reasonable steps to sign when you have done so, or gave false or misleading information relevant to their suitability.
• If you keep it, you must give written reasons within 7 days, or refund it.

Unlawfully retaining a holding deposit can attract a civil penalty of up to £5,000. If the holding deposit is converted into the tenancy deposit, the 30-day protection clock starts from that point. See holding deposits (planned) and our Right to Rent guide for the checks that sit alongside it.

Penalties for not protecting a deposit

Failure has two consequences: a financial award to the tenant and a block on possession.

The one to three times award

Under section 214, a tenant can apply to the county court if the deposit was not protected or the prescribed information was not given. If the court agrees, it must order you to pay the tenant not less than the amount of the deposit and not more than three times that amount, within 14 days. It can also order the deposit to be repaid or paid into a custodial scheme.

The claim does not end when the tenancy does. Section 214(1A) allows a former tenant to apply after the tenancy has ended.

The possession block

Section 215, as substituted by the Renters’ Rights Act 2025, stops the court making a possession order unless:

• the deposit is held in an authorised scheme
• the scheme’s initial requirements have been met
• the prescribed information has been given

The only exceptions are possession claims on Ground 7A or Ground 14 of Schedule 2 to the Housing Act 1988, the serious anti-social behaviour grounds. For every other ground, including rent arrears and selling, an unprotected deposit stops the claim.

You can cure the problem by returning the deposit in full (or with agreed deductions), or once a section 214 claim has been decided, withdrawn or settled. Returning the deposit does not remove the tenant’s right to claim the penalty. Read the full picture in the planned guide to deposit penalties and our Section 8 grounds pillar.

Deductions at the end of the tenancy

You can only deduct for losses the tenancy agreement allows, such as unpaid rent, damage beyond fair wear and tear, or missing items. A dated check-in inventory, inspection notes and a check-out report decide whether a deduction stands.

1. Inspect the property at check-out against the inventory.
2. Put proposed deductions to the tenant in writing with evidence and costs.
3. Agree the amount, then return the balance within 10 days of agreement.
4. If you cannot agree, the deposit stays protected and goes to dispute resolution.

See deductions (planned) for what is and is not reasonable.

Deposit disputes

Each scheme runs a free dispute resolution service. If you hold the deposit under an insured scheme, you must pass the disputed amount to the scheme, which holds it until the dispute is resolved. The adjudicator decides on the evidence both sides submit, so the landlord with the clearest records usually fares best. The planned guide to deposit disputes explains how to prepare a case.

How the Renters’ Rights Act changed deposit protection

The core rules (30 days, prescribed information, the cap) are unchanged. What changed from 1 May 2026:

• The duty now applies to assured tenancies, so existing ASTs that converted keep the same protection requirements.
• Section 21 has been abolished, so the old rule that blocked a section 21 notice has been replaced by a block on possession orders under section 215.
• Rent in advance is limited. You cannot take rent before the tenancy agreement is signed, and between signing and the start date you can usually require no more than one month’s rent (or 28 days’ rent).

Read our Renters’ Rights Act guide for the wider changes, and the landlord compliance pillar for how deposits fit into your full checklist.

A simple deposit protection routine

1. Calculate the cap before you advertise and state the deposit in the listing.
2. Take a holding deposit of no more than one week’s rent and set the 15-day deadline in writing.
3. When the tenancy is signed, record the deposit receipt date.
4. Protect the deposit with your chosen scheme within days, not weeks.
5. Serve the prescribed information on every tenant and any third-party payer, and keep proof of service.
6. Store the scheme certificate, prescribed information and evidence of service in one place.
7. At the end of the tenancy, agree deductions with evidence and return the balance within 10 days of agreement.

Keeping these records in one connected tenancy file is what ORBIT is built for: tenancy lifecycle management, compliance tracking and automated alerts mean the deadline is in front of you before it matters. If you want a second pair of eyes on an existing agreement, the RRA Compliance Checker flags missing clauses and legal risks, and our team can help through legal advice.

This guide is general information, not legal advice.