Tenancy deposit protection: the rules for landlords

If you take a deposit from a tenant, you must protect it in a government-approved scheme and tell the tenant how it is protected. The rules are simple, but missing a deadline can cost up to three times the deposit and, in England, block you from getting the property back. This guide covers England first, then the differences in Scotland and Wales.

The two deadlines (England)

Within 30 days of receiving the deposit, GOV.UK guidance for landlords says you must:

1. Protect it in one of the three authorised tenancy deposit schemes, and
2. Give the tenant the prescribed information about how it is protected.

The 30 days run from when you receive the money, not from when the tenancy starts, so a deposit paid 2 weeks before move-in has a deadline 2 weeks earlier than you might expect.

Since 1 May 2026 most private tenancies in England are assured periodic tenancies, and the protection rules apply to them. Deposits paid by someone else, such as a parent or a council rent deposit scheme, must be protected too.

The prescribed information

This is a set of details you must give the tenant (and anyone who paid the deposit for them) in writing. It covers:

• the address of the rented property
• how much deposit was paid
• how the deposit is protected
• the name and contact details of the scheme and its dispute resolution service
• your name and contact details (or your agent’s)
• the name and contact details of any third party who paid the deposit
• why you might keep some or all of the deposit
• how the tenant can apply to get the deposit back
• what to do if they can’t contact you at the end of the tenancy
• what to do if there is a dispute

Each scheme provides a template certificate and prescribed information document. Use it, fill in every field, and keep proof that the tenant received it.

The three schemes: custodial or insured

England and Wales share the same three authorised schemes:

• Deposit Protection Service (DPS)
• mydeposits
• Tenancy Deposit Scheme (TDS)

Each offers one or both of these models:

Custodial is the simpler choice for most private landlords. Insured schemes suit agents and landlords who want to hold the money themselves, but if there is a dispute you must pay the disputed amount to the scheme until it is resolved.

How much deposit can you take?

In England Schedule 1 of the Tenant Fees Act 2019 caps deposits:

A holding deposit doesn’t need to be protected. Since 1 May 2026, rent in advance in England is also capped at 1 month, so you can’t get round the deposit cap by asking for months of rent up front.

Penalties for not protecting a deposit

If you don’t protect the deposit or serve the prescribed information on time, the tenant can apply to court. The court can order you to:

• protect the deposit or repay it, and
• pay the tenant compensation of between 1 and 3 times the deposit.

Effect on possession

Under the Renters’ Rights Act the government’s guide says landlords will be prevented from gaining possession if they have not properly protected the tenant’s deposit. Section 21 no-fault notices were abolished on 1 May 2026, so this now affects possession claims under the reformed section 8 grounds. If you find a deposit was not protected properly, sort out the protection or return the deposit before serving any section 8 notice. Our Renters’ Rights Act guide explains the new possession rules.

At the end of the tenancy

1. Inspect the property against the check-in inventory.
2. Propose any deductions in writing, with evidence: photos, receipts or quotes.
3. Agree the amount with the tenant.
4. Return the deposit within 10 days of agreeing how much the tenant gets back.

What you can deduct

Typical deductions are for unpaid rent, damage beyond normal use, missing items, and cleaning to bring the property back to the standard at check-in. You can’t expect a property to be returned in brand new condition after years of normal living, and adjudicators look at the age and condition of items at the start.

The best protection is a detailed, dated inventory and check-in report signed by the tenant. Without it, disputed deductions are hard to justify. See our tenant referencing cost guide for other pre-tenancy checks.

Disputes

If you can’t agree, the deposit stays protected in the scheme until the dispute is settled. Each scheme offers a free alternative dispute resolution service. Both sides submit evidence and an independent adjudicator decides.

Scotland: the differences

Scottish cases go to the First-tier Tribunal for Scotland (Housing and Property Chamber) rather than the county court. See our Scotland landlord requirements guide.

Wales: the differences

Wales uses the same three schemes as England and the same 30-day deadline. Under Schedule 5 to the Renting Homes (Wales) Act 2016 you must comply with the scheme’s initial requirements and give the contract-holder the required information within 30 days of receiving the deposit.

If you don’t, the court can order you to repay the deposit or pay compensation of between 1 and 3 times the deposit. The Tenant Fees Act cap does not apply in Wales. For everything else Welsh landlords must do, see our Wales landlord requirements guide.

Checklist

• Take no more than the legal maximum: 5 or 6 weeks’ rent in England, 2 months’ rent in Scotland.
• Protect the deposit within 30 days (30 working days in Scotland).
• Serve the prescribed information within the same period and keep proof.
• Do a detailed inventory at check-in.
• At the end, propose deductions with evidence and return the balance within 10 days of agreement.
• If you re-let to the same tenant or the deposit changes, check with your scheme whether anything needs updating.

Our landlord compliance checklist covers the other duties that sit alongside deposit protection.