If you take a deposit from a tenant on an assured shorthold (now periodic) tenancy in England, you must protect it in a government-backed scheme within 30 days and give the tenant prescribed information. Get it wrong and a court can order you to pay the tenant one to three times the deposit, on top of returning it. This guide covers every step for 2026, from choosing a scheme to handling disputes at the end of the tenancy.
What "protecting a deposit" actually means
Tenancy deposit protection has been the law since April 2007 under the Housing Act 2004. Any deposit you take as security against damage or unpaid rent must be registered with one of three government-authorised schemes. The rules apply per tenancy and per deposit, across the whole of England, so a landlord in Manchester, Birmingham or anywhere else follows exactly the same national scheme rules. What varies locally is enforcement and the local rental market, not the deposit law itself.
Protection does two things: it holds or insures the money so it cannot simply disappear, and it gives both sides access to a free dispute resolution service if you disagree about deductions when the tenant leaves.
The three government-backed schemes
You must use one of these three, all free to use for the custodial option:
- Deposit Protection Service (DPS)
- MyDeposits
- Tenancy Deposit Scheme (TDS)
Each scheme offers two ways to protect the money:
- Custodial: you hand the deposit to the scheme, which holds it for the length of the tenancy. This is free. The scheme returns it at the end according to what you and the tenant agree, or according to the adjudicator if you dispute.
- Insured: you keep the deposit in your own account and pay the scheme a fee to insure it. This suits landlords who want the cash available, but you carry the responsibility of returning it correctly.
Whichever you choose, the legal deadlines and the prescribed information requirement are identical.
The 30-day rule
You must protect the deposit and serve the prescribed information within 30 calendar days of receiving it, not 30 working days. The clock starts the day the money reaches you, not the day the tenancy begins. Missing the deadline is the single most common and most expensive mistake landlords make, because it cannot be cured retrospectively. Protecting the deposit late does not undo the breach.
Prescribed information: what you must give the tenant
Protecting the money is only half the job. Within the same 30 days you must give the tenant (and anyone who paid the deposit on their behalf) the prescribed information in writing. It must include:
- The amount of the deposit and the address of the property
- The name, address and contact details of the scheme holding it
- The scheme's dispute resolution details
- Your name and contact details (as landlord or agent)
- The circumstances in which you may keep part or all of the deposit
- How the tenant can apply to get it back, and what happens if you cannot be contacted
- A certificate confirming the information is accurate, signed by the landlord
Missing prescribed information counts as a breach in its own right, even if the money itself was protected on time.
How much deposit can you take?
Since the Tenant Fees Act 2019, the deposit is capped:
- Five weeks' rent where the annual rent is under £50,000
- Six weeks' rent where the annual rent is £50,000 or more
Taking more than the cap is unlawful, and the excess is treated as a prohibited payment you must repay. Calculate the cap as annual rent divided by 52, multiplied by five (or six).
The penalties for getting it wrong
If you fail to protect the deposit or serve the prescribed information correctly, the tenant can apply to the county court. The court can order you to:
- Return the deposit in full, and
- Pay the tenant a penalty of between one and three times the deposit amount
The penalty is at the judge's discretion, but three times is common where the breach was careless or repeated. On a five-week deposit for a £1,200-a-month property, that is a potential penalty of roughly £4,150, plus the returned deposit. A tenant can bring this claim up to six years after the breach, and even after the tenancy has ended.
What changed under the Renters' Rights Act 2025
The deposit protection rules themselves were not repealed by the Renters' Rights Act, so the 30-day deadline, the prescribed information, and the one-to-three-times penalty all still apply. Two points are worth understanding for 2026:
- Section 21 is gone, so the old "you cannot serve a valid Section 21 while the deposit is unprotected" rule no longer bites in the same way. But that does not make deposit protection optional. The financial penalty and the tenant's right to claim remain fully in force, independent of any possession route.
- All tenancies are now periodic. Your original deposit protection and prescribed information carry over. You do not need to re-protect the deposit simply because the tenancy converted to periodic, provided it was protected correctly when first taken. If you issue a new written periodic agreement, keep the original protection reference and re-confirm the scheme details to the tenant for clarity.
The end of the tenancy: deductions and disputes
When the tenant leaves, you and they should agree how much of the deposit is returned. You can only deduct for genuine losses you can evidence, such as unpaid rent, damage beyond fair wear and tear, or cleaning to the standard at check-in. You cannot deduct for ordinary wear, or for improvements.
If you disagree, either party can use the scheme's free alternative dispute resolution. An independent adjudicator reviews the evidence and decides. This is where a strong check-in inventory with dated photographs wins or loses cases: without it, adjudicators tend to favour the tenant, because the burden is on the landlord to prove the deductions.
How to check your deposit is properly protected
Run this five-point check on every tenancy:
- Was the deposit protected within 30 days of receipt? Check the scheme's certificate date against your bank record.
- Did the tenant receive the full prescribed information in writing within the same 30 days?
- Is the protected amount and the property address on the certificate correct?
- Is the deposit within the five (or six) week cap?
- Do you hold a dated check-in inventory with photographs to support any future deductions?
Deposit protection in your area
The deposit rules are national and identical wherever you let, but local enforcement and the rental market differ. See the city-specific guides for Manchester, Birmingham, London, Leeds and Bristol. Letting a shared house? Deposit rules apply per tenancy, so read our HMO licensing guide alongside this one.
If you cannot answer yes to all five, you carry a live financial risk that a tenant could claim on for years. PropReady tracks deposit protection alongside every other obligation for each property you hold, flags gaps, and stores the evidence trail, so nothing slips past the 30-day window.