Tenancy deposit protection: rules, deadlines and disputes

From the day you receive a deposit for an assured shorthold tenancy in England or Wales, you have 30 calendar days to protect it in one of the three approved schemes and to serve the prescribed information. Both halves matter: protecting on day 12 but serving the paperwork on day 40 is still a breach.

The clock starts when the money is received — by you or your agent — not when the tenancy begins. A deposit taken two weeks before move-in is already two weeks into its 30 days.

• Custodial. The scheme holds the money. Free to use, no risk of losing the funds, slightly slower to release.
• Insured. You keep the money and pay a protection fee. Better for cashflow, but you must be able to pay it out on demand, and you carry the obligation to transfer disputed sums to the scheme.

The approved schemes in England and Wales are the Deposit Protection Service, MyDeposits and the Tenancy Deposit Scheme. Scotland and Northern Ireland run their own approved schemes.

The security deposit is capped at five weeks' rent where the annual rent is under £50,000, and six weeks' rent where it is £50,000 or more. Work from the annual rent: monthly rent × 12 ÷ 52 × 5, and round down.

Worked example: rent of £1,200 a month is £14,400 a year, or £276.92 a week. Five weeks is £1,384.60, so £1,384 is safe and £1,400 is a prohibited payment. A holding deposit is capped separately at one week's rent and must be repaid or applied to the rent or deposit within 15 days unless one of the narrow retention grounds applies.

Our tenancy deposit cap calculator runs the arithmetic and flags the £50,000 threshold.

Within the same 30 days, give the tenant and any relevant person in writing:

• The scheme's name and contact details, and the deposit amount and property address.
• Your name and contact details, and those of the agent if one is used.
• The circumstances in which all or part of the deposit may be retained.
• The scheme's dispute resolution procedure and how to apply for release.
• Confirmation that the information is accurate, signed by or on behalf of the landlord.
• The scheme's leaflet or information booklet.

Serve it alongside the other prescribed documents — the current How to Rent guide, the gas safety certificate and the EPC. Missing any of these blocks a section 21 notice.

• Unpaid rent and unpaid utility or council tax liabilities that fall on the tenant.
• Damage beyond fair wear and tear, valued net of the item's age and expected life.
• Cleaning to return the property to its documented check-in condition.
• Missing items listed on the inventory.

You cannot deduct for fair wear and tear, for pre-existing defects, or to fund improvements. Betterment — claiming a new carpet for a five-year-old one — is the most common reason a deduction is cut down by an adjudicator.

1. Signed, dated inventory and schedule of condition, with photographs, at check-in.
2. Mid-tenancy inspection reports with photographs, shared with the tenant at the time.
3. A check-out report mirroring the check-in format, item by item.
4. Invoices or itemised quotes for the work you are claiming.
5. A written breakdown to the tenant proposing deductions, before raising a dispute.

Release the undisputed part immediately. Adjudication is free, evidence-based and decided on paper — the landlord who submits a coherent evidence pack usually recovers materially more than the one who submits assertions.

A court can order repayment of the deposit plus a penalty of between one and three times its value, and it can do so even after the tenancy has ended. In practice, late protection tends to attract an award towards the lower end and complete non-protection towards the higher. Separately, you cannot use the section 21 route while the breach is unremedied.

A landlord lets a flat at £1,300 a month and takes a deposit of £1,500 on 3 March, with the tenancy starting on 10 March. Two things go wrong.

The deposit amount itself was correct — £1,500 is exactly five weeks. The failure was timing: the 30 days ran from receipt of the money on 3 March, not from the tenancy start on 10 March. On top of the penalty, no valid Section 21 notice can be served while the breach is unremedied, so a straightforward end-of-tenancy becomes a Section 8 case or a negotiated surrender.

1. Work out the maximum deposit you can take. For most assured shorthold tenancies in England the cap is five weeks' rent where annual rent is under £50,000, and six weeks' rent at or above it. Weekly rent is the monthly rent times 12, divided by 52.
2. Choose a government-approved scheme. In England and Wales that is the Deposit Protection Service, MyDeposits or the Tenancy Deposit Scheme. Decide between custodial — the scheme holds the money, usually free — and insured, where you hold it and pay a fee.
3. Protect the deposit within 30 days. The clock runs from the day you receive the money, not the tenancy start date, and it is 30 calendar days including weekends and bank holidays. Late protection cannot be cured by protecting it afterwards.
4. Serve the prescribed information within the same 30 days. The tenant and anyone who paid on their behalf must receive the scheme details, the deposit amount, the property address, your contact details, how to apply for release, the deduction grounds and the scheme's information leaflet.
5. Get proof of service. Keep the signed acknowledgement, the email with delivery evidence or the certificate of posting. In a dispute the burden is on the landlord to show the prescribed information was actually served.
6. Evidence the property condition at the start. A dated, photographed inventory and schedule of condition signed by the tenant is what makes deductions stick. Without it, adjudicators generally decide in the tenant's favour.
7. Return or dispute the deposit within 10 days of agreement. At the end of the tenancy propose any deductions with invoices or quotes. Where amounts are agreed, the deposit must be returned within 10 days. Where they are not, use the scheme's free dispute resolution.