Tenancy Deposit Protection: Schemes, Timelines and Penalties
Plain-English guide to UK tenancy deposit protection — the three schemes, 30-day rule, prescribed information and penalties of 1× to 3× the deposit.
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# Tenancy Deposit Protection: Schemes, Timelines and Penalties
Quick Answer
If you take a security deposit on an Assured Shorthold Tenancy (or its post-Renters'-Rights-Act equivalent) in England or Wales, you must protect it in a government-approved deposit scheme within 30 days of receipt and serve prescribed information to the tenant. The three schemes are TDS, DPS and mydeposits. Failing to protect can cost you between one and three times the deposit in compensation and bar you from serving most possession notices.
Key Takeaways
- Deposit must be protected within 30 days of receipt.
- Prescribed information must be served on the tenant and any relevant person within 30 days.
- Three schemes: TDS, DPS, mydeposits — two custodial, three insured options.
- Penalty: 1× to 3× the deposit, plus you lose the right to serve a no-fault possession notice.
- Maximum deposit is 5 weeks' rent (or 6 weeks for rent over £50,000 a year).
What Has Changed?
Renters' Rights Act linkage
Under the Renters' Rights Act, no possession notice that relies on prescribed information will succeed if the deposit was not properly protected and the prescribed information not served. Even where the deposit has now been repaid, historic non-compliance can still attract compensation.
Move-in/move-out documentation
Schemes have tightened their evidence standards. A signed inventory, dated photos and a check-out report from an independent inventory clerk are now the gold standard for winning disputes.
Digital prescribed information
You can now serve prescribed information digitally provided the tenant has agreed in writing to receive notices electronically.
How Deposit Protection Works
The three schemes
| Scheme | Custodial | Insured |
|---|---|---|
| TDS | Yes | Yes |
| DPS | Yes | Yes |
| mydeposits | No | Yes |
Custodial vs insured
- Custodial: the scheme holds the deposit. Free to use.
- Insured: you hold the deposit but pay a fee per tenancy. The scheme insures it.
Prescribed information
Within 30 days of receiving the deposit, you must serve the tenant with prescribed information including:
- Amount of deposit and scheme details
- Property address
- Contact details for the landlord, agent and scheme
- A statement confirming the tenant has signed a confirmation document
- Procedures for repayment and dispute resolution
Maximum deposit amount
Since the Tenant Fees Act 2019:
- 5 weeks' rent (annual rent under £50,000)
- 6 weeks' rent (annual rent £50,000+)
Calculate using: (monthly rent × 12) ÷ 52 × 5.
What Landlords Need To Do Now
Step 1: Choose a scheme before taking the deposit
Decide whether you want custodial (free, easier) or insured (you keep the money, but you pay). Most accidental landlords prefer custodial.
Step 2: Take the deposit and lodge within 30 days
The 30-day clock starts on the day you receive the deposit, not the tenancy start date. Late protection — even by a day — is a breach.
Step 3: Serve prescribed information
Use the scheme's template or your dashboard's auto-generated pack. Get the tenant to sign electronically (or on paper). Keep the signed copy in your tenancy file.
Step 4: Re-protect at renewal
If you sign a new fixed-term tenancy, most schemes require you to re-confirm protection. Failure to do so is a fresh breach. Statutory periodic rollovers under the Renters' Rights Act do not require re-protection.
Step 5: Handle the deposit return correctly
At check-out:
- Carry out a thorough inventory check.
- Agree deductions in writing.
- Repay the agreed sum within 10 days.
- For disputes, refer to the scheme's free adjudication service.
Common Mistakes To Avoid
1. Taking more than 5 weeks' rent
The Tenant Fees Act 2019 caps deposits. Any excess must be refunded and could be treated as a prohibited payment.
2. Lodging late
Even one day late is non-compliance. Lodge on the same day you receive the funds.
3. Not serving prescribed information
Many landlords lodge the deposit but forget to serve prescribed information. This is the single most common reason for the 1×–3× penalty.
4. Forgetting to re-protect at fixed-term renewal
A new tenancy = a new protection event. The exception is statutory periodic continuation under the Renters' Rights Act.
5. Withholding the deposit "until the next tenant moves in"
This is a breach. Repayment must follow agreement within 10 days, not be conditional on the property re-letting.
6. Making unsupported deduction claims
Deductions must be evidenced with photos, invoices and the original inventory. Schemes will reject anything that looks like betterment or fair wear and tear.
7. Failing to update tenant contact details
If the tenant cannot be reached for the deposit return, you must follow the scheme's missing-tenant procedure — not pocket the money.
Frequently Asked Questions
1. How long do I have to protect the deposit?
30 calendar days from the date you receive it.
2. Which scheme is best?
For a single property, the custodial DPS is typically simplest. Larger portfolios often choose insured TDS or mydeposits for cashflow.
3. How much can I take?
5 weeks' rent for tenancies under £50,000 a year; 6 weeks for rents over £50,000.
4. What if I take the deposit late?
Protect it immediately and serve prescribed information. You may still be liable for the penalty for the period it was unprotected, but the breach is less likely to escalate.
5. Can I use deposit money to cover unpaid rent?
Yes — provided you follow scheme rules and the tenancy agreement allows it.
6. What is a "holding deposit"?
A holding deposit is up to one week's rent paid to reserve a property. It is governed separately by the Tenant Fees Act 2019.
7. What about pet deposits?
After the Renters' Rights Act, you can no longer take a separate pet deposit. You must rely on the standard deposit and (separately) pet damage insurance.
8. How long does adjudication take?
Typically 28 days from submission of evidence by both parties.
9. Can I keep the deposit if the tenant abandons the property?
You must still go through the scheme's process. Document abandonment with photographs and seek legal advice.
10. What if the tenant won't sign the prescribed information?
You must still serve it. Schemes accept proof of service (e.g. email receipts, signed delivery slip) as evidence.
11. What is the penalty for non-protection?
A court can order you to pay the tenant between 1× and 3× the deposit. You also cannot serve most possession notices until you remedy the breach.
12. Are companies and overseas tenants treated differently?
Company lets are not subject to deposit protection. Overseas tenants in personal name are.
References
- Housing Act 2004 (Part 6, Chapter 4) — [legislation.gov.uk](https://www.legislation.gov.uk/ukpga/2004/34/part/6/chapter/4)
- Tenant Fees Act 2019 — [legislation.gov.uk](https://www.legislation.gov.uk/ukpga/2019/4)
- Renters' Rights Act–2025
- TDS — [tenancydepositscheme.com](https://www.tenancydepositscheme.com)
- DPS — [depositprotection.com](https://www.depositprotection.com)
- mydeposits — [mydeposits.co.uk](https://www.mydeposits.co.uk)
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*Written by the Smart Sleep Property Editorial Team. This article is for general information only and is not a substitute for legal advice.*
Frequently asked questions
How long do I have to protect the deposit?+
30 calendar days from receipt.
Which scheme is best?+
For one property, custodial DPS is simplest. Larger portfolios often pick insured TDS or mydeposits.
How much can I take?+
5 weeks' rent (under £50,000/year) or 6 weeks (over £50,000/year).
What if I protect late?+
Protect immediately; you remain liable for the breach period.
Can I use the deposit for unpaid rent?+
Yes if the agreement permits it and scheme rules are followed.
What is a holding deposit?+
Up to one week's rent governed by the Tenant Fees Act 2019.
Can I take a pet deposit?+
No — banned by the Renters' Rights Act; use pet damage insurance.
How long does adjudication take?+
Typically 28 days.
What if the tenant abandons?+
Follow scheme procedures and document abandonment.
What if the tenant won't sign?+
Serve anyway with proof of delivery.
What is the penalty for non-protection?+
1× to 3× the deposit plus blocked possession.
Are company lets covered?+
No — only personal-name tenancies.
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