Tenancy deposit protection is one of the most litigated areas of landlord–tenant law. The rules appear straightforward, but landlords routinely fall into traps: protecting the deposit late, forgetting to re-protect on renewal, failing to serve prescribed information on all relevant parties (tenant plus any guarantor), or not providing the correct scheme's prescribed information leaflet.
From 1 May 2026, Section 21 notices have been abolished under the Renters' Rights Act 2025. However, deposit protection obligations remain fully in force, non-compliant landlords still face deposit penalty claims and the failure to protect affects the validity of new possession proceedings.
The three government-approved TDP schemes
There are three government-approved schemes in England and Wales. All offer both custodial (scheme holds the money) and insurance-backed (landlord holds the money) options:
- Deposit Protection Service (DPS), mydeposits.co.uk parent; the only scheme that does not charge for custodial protection. Free to use, BACS payment required
- MyDeposits, insurance-backed scheme popular with letting agents; landlord retains the deposit and pays an insurance premium per deposit
- Tenancy Deposit Scheme (TDS), the longest-established scheme; both custodial (TDS Custodial, free) and insurance-backed (TDS Insured) options available
- All three are equally valid, choose whichever scheme is most practical for your portfolio
- Scotland and Northern Ireland have their own separate schemes (SafeDeposits Scotland; Tenancy Deposit Scheme NI)
The 30-day deadline
Landlords must protect the deposit AND serve the prescribed information within 30 days of receiving the deposit:
- Day 1 is the day the deposit is received (not the tenancy start date)
- Both protection and prescribed information service must occur within 30 days, serving prescribed information before protecting the deposit is invalid
- For deposits received before 6 April 2012, the original 14-day rule applied, the 30-day rule applies to all deposits received on or after that date
- If a fixed-term tenancy rolls into a statutory periodic tenancy, the existing protection remains valid, you do not need to re-protect at the end of the fixed term
- If a new fixed-term tenancy is agreed (replacing the periodic), you must re-protect and re-serve prescribed information within 30 days
Prescribed information, what must be served
Prescribed information is the documentation the landlord must give to every relevant person (tenant and any guarantors) within 30 days. It must include:
- The name, address, and contact details of the TDP scheme used
- The scheme's terms and conditions
- An explanation of the purposes of the scheme and how it operates
- The procedure for raising a dispute if there is a disagreement about deductions
- The circumstances under which the deposit can be retained in whole or in part
- The deposit amount protected and the property address
- The name and contact details of any third party (letting agent) holding or managing the deposit
- Each approved scheme provides a prescribed information form, use the scheme's own form to ensure compliance
Deposit deductions, what is permitted
At the end of the tenancy, the landlord may only deduct from the deposit for legitimate losses. Permitted deductions include:
- Unpaid rent: Rent arrears at the end of the tenancy
- Damage beyond fair wear and tear: Damage caused by the tenant that goes beyond normal wear, the condition at the start of the tenancy (documented in the inventory) is the baseline
- Cleaning: Only if the property is left in a materially worse condition than at the start, a professionally cleaned property returned slightly dirty is not a valid deduction
- Replacement items: Where the tenant has lost or broken items beyond fair wear and tear, but the landlord must allow for depreciation (a 3-year-old item cannot be claimed at full replacement cost)
- Breach of tenancy obligations: For example, unauthorised alterations left unrectified
- Fair wear and tear, gradual deterioration from normal use, cannot be charged to the tenant
- An accurate check-in inventory (ideally with timestamped photos) is essential to substantiate any deductions
Penalties for non-compliance
The Housing Act 2004 imposes sanctions for failure to protect a deposit or serve prescribed information:
- Deposit penalty order: Courts must order the landlord to pay the tenant 1–3 times the deposit amount as a penalty, not just repay the deposit
- Possession proceedings affected: A landlord who has not complied with deposit protection requirements cannot rely on certain possession procedures, compliance is required
- Limitation period: Tenants have 6 years from the end of the tenancy to bring a deposit penalty claim
- The landlord must repay the deposit first: A court cannot reduce the penalty on the grounds that the deposit has now been protected, the clock started when the deposit was received
- Multiple breaches: A landlord who has failed to protect across multiple tenancies can face cumulative penalties, each tenancy is a separate breach
Frequently asked questions
How long do I have to protect a tenancy deposit?+
You must protect the deposit AND serve the prescribed information within 30 days of receiving the deposit. Both actions must be completed within the 30-day window, protecting the deposit on day 29 and then serving prescribed information on day 31 means the prescribed information was served late, which is a breach.
What happens if I don't protect the deposit?+
If you fail to protect the deposit within 30 days, or fail to serve the prescribed information, the tenant can apply to the county court for a deposit penalty order. The court must order you to pay the tenant between 1 and 3 times the deposit amount as a penalty (in addition to repaying the deposit). You also cannot validly use certain possession procedures while the deposit is unprotected.
Do I need to re-protect the deposit if the tenancy rolls to periodic?+
No. When a fixed-term assured shorthold tenancy ends and becomes a statutory periodic tenancy, the existing deposit protection automatically continues, you do not need to re-protect or re-serve prescribed information. However, if you grant a new fixed-term tenancy (even to the same tenant), you must re-protect and re-serve prescribed information within 30 days of the new tenancy starting.
Can I deduct from the deposit for cleaning?+
Only if the property is returned in a materially worse condition than it was at the start of the tenancy. If you provided a professionally cleaned property and the tenant returns it dirty, a professional cleaning deduction may be justified. However, you must document the start condition (check-in inventory with photos), without evidence of the starting condition, cleaning deduction claims are routinely rejected in deposit disputes.
Which deposit protection scheme should I use?+
All three schemes (DPS, MyDeposits, TDS) are government-approved and equally valid. The Deposit Protection Service (DPS) custodial option is free and holds the money on your behalf, good for landlords who do not want to hold deposits themselves. MyDeposits and TDS Insured are insurance-backed, you hold the deposit and pay a per-deposit premium. For simplicity, the free custodial option is usually the safest choice for portfolio landlords.