Every landlord in England and Wales who takes a deposit from a tenant must protect it in a government-approved scheme. This guide explains the rules, the deposit cap, what information you must provide, and the penalties for getting it wrong.
The basics: what landlords must do
If you take a deposit for an assured shorthold tenancy (AST), you must:
- Protect the deposit in one of three government-approved schemes within 30 days of receiving it
- Provide prescribed information to the tenant within the same 30-day period
- Return the deposit at the end of the tenancy (minus any agreed deductions)
These rules apply regardless of who paid the deposit - even if a parent, guarantor or third party provided the funds.
Deposit cap: how much can you take?
Since the Tenant Fees Act 2019, deposits are capped at:
- 5 weeks’ rent - for tenancies where annual rent is under £50,000
- 6 weeks’ rent - for tenancies where annual rent is £50,000 or more
Taking more than the permitted amount is a breach of the Act and can result in fines of up to £5,000.
The three approved schemes
There are three government-approved tenancy deposit protection schemes in England and Wales. Each offers slightly different options:
Deposit Protection Service (DPS)
The DPS offers both custodial (free) and insured options. With the custodial scheme, the deposit is held by the DPS for the duration of the tenancy.
MyDeposits
MyDeposits offers insured and custodial schemes. With the insured option, the landlord or agent holds the deposit but pays a fee for protection.
Tenancy Deposit Scheme (TDS)
TDS offers both custodial (free) and insured schemes. It is run by The Dispute Service, a not-for-profit organisation.
All three schemes provide free dispute resolution if landlord and tenant cannot agree on deductions at the end of the tenancy.
Prescribed information: what you must tell the tenant
Within 30 days of receiving the deposit, you must provide the tenant with the following in writing:
- The address of the rented property
- The amount of deposit paid
- Which scheme protects the deposit and how to contact them
- The landlord’s name and contact details (or agent’s details if applicable)
- The name and contact details of any third party who paid the deposit
- The reasons the landlord may keep some or all of the deposit
- How to apply for the deposit to be returned
- What to do if the landlord cannot be contacted at the end of the tenancy
- Information about the scheme’s dispute resolution service
Most schemes provide a standard certificate and prescribed information document. You must give this directly to the tenant - pointing them to a website is not sufficient.
Penalties for non-compliance
Failing to protect a deposit or provide the prescribed information carries serious consequences:
Financial penalties
A tenant can apply to the county court if their deposit was not protected or they did not receive the prescribed information. The court can order the landlord to:
- Return the deposit to the tenant, or protect it in an approved scheme
- Pay compensation of between 1 and 3 times the deposit amount
Courts typically award 1x the deposit for minor or technical breaches, and up to 3x for deliberate or repeated failures.
Section 21 restrictions
A landlord cannot serve a valid Section 21 notice if:
- The deposit is not protected in an approved scheme
- The prescribed information has not been provided
- The deposit has not been returned to the tenant (where required)
This means landlords who fail to comply with deposit rules may be unable to use the no-fault eviction route - at least until Section 21 is abolished under the Renters’ Rights Act.
At the end of the tenancy
When a tenancy ends, the deposit should be returned within 10 days of both parties agreeing how it will be allocated. The process is:
- Agree deductions - landlord and tenant agree what (if any) amount will be retained for damages, cleaning or unpaid rent
- Request release - the landlord (or tenant) requests the scheme to release the deposit
- Funds returned - once both parties confirm agreement, the scheme releases the money
If there’s a dispute
If landlord and tenant cannot agree on deductions, either party can refer the matter to the scheme’s free alternative dispute resolution (ADR) service. An independent adjudicator will review the evidence and make a binding decision.
To support a claim for deductions, landlords should keep:
- A detailed inventory with dated photographs at check-in and check-out
- Receipts for cleaning or repairs
- Records of any rent arrears or unpaid bills
- Correspondence with the tenant about the issues
Scotland
Scotland has its own deposit protection rules under The Tenancy Deposit Schemes (Scotland) Regulations 2011. Landlords must protect deposits within 30 working days of the tenancy start date.
There are three approved schemes in Scotland:
Northern Ireland
Northern Ireland introduced tenancy deposit protection in 2013. Landlords must protect deposits within 28 days of receiving them.
The sole approved scheme is:
Checklist for landlords
- Check the deposit does not exceed 5 weeks’ rent (or 6 weeks if annual rent is £50,000+)
- Protect the deposit within 30 days of receiving it
- Provide the tenant with the prescribed information within 30 days
- Keep proof of protection and the information provided
- Conduct a thorough inventory at the start of the tenancy
- At the end, agree deductions promptly and request release of the deposit
- Use the ADR service if agreement cannot be reached
Last updated: February 2026
Sources: GOV.UK Tenancy Deposit Protection, Tenant Fees Act 2019
