Taking a deposit is one of the most common - and most commonly mishandled - parts of letting a property. The rules are tightly defined and the penalties for missing them are some of the harshest in lettings law. Get the basics right and the process is genuinely simple. Last reviewed: 30 May 2026.
What deposit protection actually requires
Under section 213 of the Housing Act 2004, if you take a deposit for an assured tenancy in England, you must do two distinct things within a fixed time limit:
- Protect the deposit in one of the three government-approved schemes.
- Serve the prescribed information - a specific set of written details - on the tenant and anyone who paid the deposit on their behalf.
These are two separate obligations. Protecting the money is not enough on its own; you must also give the tenant the prescribed information. Both must happen inside the same window. This applies whether you let the property yourself or use an agent - the legal duty sits with the landlord, so if an agent handles it, confirm in writing that both steps are done.
The three approved schemes
There are three authorised tenancy deposit schemes in England and Wales. You must use one of them; you cannot simply hold the money in your own bank account.
Each scheme offers two models, and the difference matters for your cash flow:
- Custodial - you hand the deposit to the scheme, which holds it for the duration of the tenancy. This is usually free to the landlord.
- Insured - you keep the deposit but pay the scheme a fee to insure it. You hold the cash, the scheme guarantees it.
All three run a free dispute-resolution service at the end of the tenancy, so a disagreement over deductions does not have to go to court. You can compare the options on the official gov.uk deposit protection schemes page.
The 30-day rule
You have 30 days from receiving the deposit to both protect it and serve the prescribed information. This is a hard deadline, not a target - the clock starts the day the money reaches you, not the day the tenancy begins.
A frequent and costly mistake is treating these as two different deadlines. They are not. Both the protection and the prescribed information must be completed within the same 30-day window. If you protect the deposit on day 5 but do not serve the prescribed information until day 40, you have breached the rules even though the money was safe the whole time.
Practical tip: protect the deposit the moment it clears, generate the scheme's prescribed-information certificate the same day, and serve it straight away. Treating it as a single same-day task removes the risk entirely.
The deposit cap
The Tenant Fees Act 2019 caps how much deposit you can take:
- Up to 5 weeks' rent where the annual rent is under £50,000.
- Up to 6 weeks' rent where the annual rent is £50,000 or more.
To convert monthly rent into the weekly figure the Act uses, multiply the monthly rent by 12 and divide by 52, then multiply by 5 (or 6). Taking more than the cap is itself a breach, and any excess must be returned. If you are unsure which band you fall into, check the current figures on the gov.uk Tenant Fees Act guidance before you take the money.
What the prescribed information must contain
The detail of what you must give the tenant is set by The Housing (Tenancy Deposits) (Prescribed Information) Order 2007. In broad terms, the written notice must cover:
- The name and contact details of the scheme protecting the deposit.
- The amount of the deposit and the address of the property it relates to.
- The landlord's name and contact details (and the agent's, if one is used).
- How the deposit is protected and how the tenant can apply to get it back at the end of the tenancy.
- What happens if there is a dispute over deductions, and how the scheme's free dispute-resolution service works.
Each scheme provides a template or auto-generated certificate that captures the required points, so you rarely need to draft this from scratch. The tenant - and any third party who paid the deposit, such as a guarantor or parent - must sign or otherwise confirm receipt. Keep that confirmation; it is your evidence the obligation was met. Because the exact required content is set in law and the schemes update their templates, always use the scheme's current prescribed-information document rather than an old copy.
Why getting it wrong is so serious
Deposit protection carries two distinct consequences if you miss the rules, and both bite hard.
1. A financial penalty
If you fail to protect the deposit, or fail to serve the prescribed information in time, the tenant can apply to the county court. The court can order you to repay the deposit and to pay the tenant a penalty of between one and three times the deposit amount. The multiple is at the court's discretion, but on a 5-week deposit a three-times award is a substantial sum - and it is owed to the tenant on top of returning their money.
2. Possession implications
This is where the position has changed significantly. Before 1 May 2026, the most-quoted consequence of mishandling a deposit was losing the right to serve a Section 21 "no-fault" notice. Section 21 has now been abolished under the Renters' Rights Act 2025, so that specific lever no longer exists - all assured tenancies are now periodic, and possession runs through the Section 8 grounds process. Deposit protection has not gone away, though: the financial penalty above still applies. Because this area is in active transition, check the current position on gov.uk's private renting pages before relying on any older guidance you find online, much of which still describes Section 21 as if it were live.
Practical checklist
| Step | When | Detail |
|---|---|---|
| Check the cap before you take the deposit | Before move-in | 5 weeks' rent (under £50,000 annual rent) or 6 weeks' (£50,000+). Never take more. |
| Choose a scheme | Before or on receipt | DPS, mydeposits, or TDS. Decide custodial or insured up front. |
| Protect the deposit | Within 30 days of receipt | Pay it to the custodial scheme, or register it with the insured scheme. |
| Serve the prescribed information | Within the same 30 days | Give the scheme's certificate to the tenant and any third party who paid. |
| Get and keep confirmation of receipt | At the same time | Signed acknowledgement or dated email trail. This is your evidence. |
| Re-check on renewal | Each new fixed term or statutory change | Confirm the protection and information are still valid and current. |
Pair the deposit paperwork with a detailed move-in inventory and dated photographs. The deposit scheme's free dispute service decides end-of-tenancy deductions on the evidence, and a clear inventory is the single best protection against a disputed claim.
Listing with the paperwork in order
Deposit protection sits alongside the rest of your pre-tenancy obligations - the gas safety certificate, EICR, EPC, and Right to Rent checks. When you list a rental on Domovita you can manage the listing yourself or bring in a local agent to handle it, whichever suits you; either way the legal duty to protect the deposit and serve the prescribed information stays with you as the landlord. If you want the full picture, our Renters' Rights Act compliance overview runs through every requirement and its deadline.
This guide is general information, not legal advice. For your specific circumstances, and for anything local-authority specific, check the current gov.uk guidance or take professional advice.
Frequently asked questions
How long do I have to protect a tenancy deposit?
You have 30 days from the day you receive the deposit to both protect it in an approved scheme and serve the prescribed information on the tenant. The clock starts when the money reaches you, not when the tenancy begins. Both steps must be completed inside the same 30-day window - protecting the money alone is not enough.
Which deposit protection schemes can I use?
There are three government-approved schemes in England and Wales: the Deposit Protection Service (DPS), mydeposits, and the Tenancy Deposit Scheme (TDS). Each offers a custodial option (the scheme holds the money, usually free) and an insured option (you hold it and pay a fee). All three run a free end-of-tenancy dispute-resolution service.
How much deposit can I legally take?
Under the Tenant Fees Act 2019 the cap is five weeks' rent where the annual rent is under £50,000, and six weeks' rent where it is £50,000 or more. To find the weekly figure, multiply the monthly rent by 12 and divide by 52. Taking more than the cap is a breach and the excess must be returned.
What is the prescribed information?
It is a set of written details, defined by the Housing (Tenancy Deposits) (Prescribed Information) Order 2007, that you must give the tenant. It covers the scheme protecting the deposit, the amount and property address, the landlord and agent contact details, how the tenant gets the deposit back, and how disputes are resolved. Each scheme provides a template certificate.
What happens if I do not protect the deposit or serve the information in time?
The tenant can apply to the county court, which can order you to repay the deposit and pay a penalty of between one and three times its value, at the court's discretion. Since Section 21 was abolished on 1 May 2026, the old loss of no-fault eviction rights no longer applies, but the financial penalty still does.
Does deposit protection still matter now that Section 21 is abolished?
Yes. The Renters' Rights Act 2025 removed Section 21, but it did not remove the deposit protection rules. The financial penalty of one to three times the deposit still applies if you fail to protect the money or serve the prescribed information. Always check the current gov.uk guidance.
General information, not legal advice. This guide explains the rules in plain English and is kept under review, but the law changes and every situation is different. Always check the current position on the official gov.uk pages linked above, and take professional advice - a solicitor, or your local council for licensing questions - before relying on it for a specific decision.