Hold on to your deposit — or rather, don't

Tenancy deposit protection has been the law since 2007. Nearly two decades on, it still catches landlords out with surprising regularity — not always because they're trying to avoid the rules, but because the rules are more specific than most people realise. Getting it wrong doesn't just mean losing a dispute at the end of the tenancy. It can mean a court ordering you to repay the deposit in full plus a penalty of up to three times that amount on top.

Let's go through it properly.

The basics: 30 days, three schemes

When you receive a tenancy deposit, you have 30 days to protect it in one of the three government-approved schemes: the Deposit Protection Service, MyDeposits, or the Tenancy Deposit Scheme. All three are free for tenants and straightforward to use.

30 days. Not when you get round to it, not at the start of the tenancy if you received the deposit beforehand — 30 days from the date you received the money.

The bit most people miss: prescribed information

Protecting the deposit is step one. Step two — and this is where a lot of landlords fall down — is serving the prescribed information on the tenant within the same 30-day window.

The prescribed information is a specific set of details about the deposit and the scheme protecting it: the scheme's name and contact details, the amount protected, how to get the deposit back at the end of the tenancy, and what to do if there's a dispute. Each scheme has its own prescribed information document, and you must serve it correctly.

Here's the important bit: protecting the deposit but failing to serve the prescribed information on time is still a breach. The courts treat it the same way. We've heard of landlords who protected the deposit promptly but forgot to send the paperwork, and still ended up facing a compensation claim.

What the penalties actually look like

If a tenant takes you to court for non-compliance, the court must order you to repay the deposit in full — regardless of what condition the property was left in — and can award between one and three times the deposit amount as a financial penalty on top of that. On a London property where the deposit might be £2,000 or more, that's a significant exposure.

From 1 May 2026, under the Renters' Rights Act, there's an additional consequence: you cannot serve a valid Section 8 notice to regain possession of your property unless the deposit is properly protected and the prescribed information has been served. In other words, a deposit protection failure doesn't just cost you money — it can prevent you from getting your property back when you need it.

The deposit cap

A quick reminder on this: the deposit is capped at five weeks' rent where the annual rent is under £50,000, and six weeks' rent above that. You cannot take more than this, and any excess must be returned.

Returning the deposit at the end

Once the tenancy ends and you've agreed any deductions with the tenant, you have 10 days to return the balance. If there's a dispute, the scheme's free adjudication service handles it — but you'll need that inventory and photographic evidence we covered in our end of tenancy post to make your case.

The straightforward bit

Despite all of the above, deposit protection is genuinely not complicated once you've done it once. Register with one of the three schemes, protect within 30 days, serve the prescribed information, keep a copy. That's it.

If there's anything we can help with on the maintenance and compliance side — getting properties up to scratch before a new tenancy, end of tenancy work, or anything in between — give us a call on 020 7993 8277 or drop us a line at info@lapps.co.uk.

Legal disclaimer: The information in this post is provided for general guidance purposes only and does not constitute legal advice. Deposit protection rules can change and individual circumstances vary — we recommend seeking advice from a qualified professional if you have specific concerns about your legal obligations. LAP Property Services accepts no liability for any decisions made in reliance on this content.

LAP Property Services provide property maintenance, electrical, gas, and compliance services to landlords and letting agents across London. Visit www.lapps.co.uk to find out more.