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Tenancy Deposit Protection UK: Landlord Rules 2026

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Part ofUK Property Law Guide

Written by Brad Askew Solicitor (non-practising)
Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice.
Updated June 2026 · England & Wales
If you let a property on an Assured Shorthold Tenancy in England, the money you take as a deposit is not really yours to hold. It belongs to the tenant, and the law places strict duties on you about how it must be kept and what you need to tell them. Get this wrong and the consequences can be severe, including being unable to serve a section 21 notice and facing a financial penalty of up to three times the deposit. This page walks through the main duties under the Housing Act 2004 and the changes introduced by the Tenant Fees Act 2019, so you can see clearly what is expected of you before, during, and at the end of a tenancy.

Overview

Tenancy deposit protection is the statutory framework that requires landlords and letting agents to safeguard deposits taken from tenants on most residential lettings in England and Wales. The rules were introduced by the Housing Act 2004 and apply to the majority of Assured Shorthold Tenancies.

In practice, this means paying the deposit into one of the government-approved schemes within a set time frame after you receive it, and giving the tenant specific written information about where it is held and how to get it back. There are three approved schemes in England and Wales: the Deposit Protection Service, MyDeposits, and the Tenancy Deposit Scheme.

Each offers a custodial option, where the scheme holds the money, or an insurance-based option, where you keep the money but pay a premium to cover it. The Tenant Fees Act 2019 also caps the deposit amount you can take, generally to five weeks' rent where the annual rent is under a certain threshold, and restricts what you can charge tenants on top of rent.

Key steps

  1. Take only a permitted deposit. Before you accept any money, check the cap set by the Tenant Fees Act 2019. For most tenancies the deposit is limited to the equivalent of five weeks' rent, with a higher cap for high-value lets. Taking more than the permitted amount is a breach of the Act and can lead to enforcement action and repayment obligations. 2. Protect the deposit within 30 days. Once the tenant pays the deposit, you have a strict 30-day window to place it in one of the three government-approved schemes. Missing this deadline is one of the most common and costly mistakes landlords make, and the penalties apply even if the failure was unintentional or the deposit was eventually protected late. 3. Serve the prescribed information. Within the same 30-day period, you must give the tenant written information in a specific form. This covers the scheme used, the amount protected, the address of the property, contact details, and how disputes are handled. Any person who contributed to the deposit, such as a guarantor, should also receive this information. 4. Keep records for the length of the tenancy. Retain proof that the deposit was protected on time, copies of the prescribed information, the signed tenancy agreement, the inventory, and check-in and check-out reports. If a dispute arises at the end of the tenancy, these documents are what the adjudicator will rely on to decide how the deposit is divided. 5. Return or dispute the deposit at the end. When the tenancy ends, agree any deductions with the tenant and return the balance promptly. If you cannot agree, the approved scheme offers a free alternative dispute resolution service. Where you want to make deductions for damage beyond fair wear and tear, unpaid rent, or cleaning, you will need evidence to support each proposed deduction.

Common questions

Q What happens if I do not protect the deposit in time?
Failing to protect a deposit within 30 days, or failing to serve the prescribed information, can have two consequences. The tenant can apply to the county court for a financial penalty of between one and three times the deposit amount, and you generally lose the ability to use the section 21 no-fault eviction route until the deposit is returned or properly dealt with. These penalties apply per tenancy.
Q Do I need to protect a deposit for a lodger?
No. The deposit protection rules apply to Assured Shorthold Tenancies, which typically arise when a tenant has exclusive use of a property or self-contained part of it. A lodger who shares living space with the resident landlord usually occupies under a licence, not an AST, so the protection rules do not apply. However, you should still document the money received and the terms under which you may retain it.
Q Can I use a holding deposit before the tenancy starts?
Yes, but the Tenant Fees Act 2019 limits a holding deposit to one week's rent and sets rules about when it must be refunded or applied towards the tenancy. Once the tenancy begins, the holding deposit is normally converted into part of the tenancy deposit, at which point the 30-day protection clock starts running on the full amount.
Q What is the prescribed information and why does it matter?
The prescribed information is a set of details you must give the tenant in writing after protecting the deposit. It includes the scheme name, deposit amount, property address, landlord and tenant contact details, the circumstances in which deductions might be made, and information about how to recover the deposit. Failing to serve it correctly has the same consequences as failing to protect the deposit itself.
Q Does the deposit need to be re-protected when the tenancy renews?
This depends on the scheme and the nature of the renewal. When a fixed-term tenancy becomes a statutory periodic tenancy, most schemes treat the existing protection as continuing, but the prescribed information may need to be reissued. If you sign a new fixed-term agreement or the parties change, you should check the scheme's guidance and consider reprotecting to be safe.
Q Can I make deductions from the deposit for wear and tear?
No. Fair wear and tear is the gradual deterioration that occurs through normal use, and you cannot charge the tenant for it. Deductions are only appropriate for actual damage, unpaid rent, cleaning needed to return the property to its check-in state, or missing items. A good inventory with dated photographs at the start and end of the tenancy is the strongest evidence in a dispute.
Q What if the tenant disagrees with my proposed deductions?
Each of the three approved schemes runs a free alternative dispute resolution service. The disputed amount is held by the scheme while an independent adjudicator reviews the evidence from both sides and reaches a binding decision. You are not obliged to use it, and either party can go to court instead, but the scheme route is usually faster and cheaper.

Sources

This guide is based on primary UK law and official guidance.

Brad Askew, Solicitor (non-practising)

Written & reviewed by

Brad Askew Solicitor (non-practising)

Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice. LegalDocuments.co.uk is not a law firm and does not provide regulated legal advice.

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Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.