Take a deposit on an assured shorthold tenancy and the clock starts: you must protect it in an approved scheme and give the tenant prescribed information — or face penalties of up to three times the deposit. Here’s how to get deposit protection right.
If you take a deposit for an assured shorthold tenancy, you must protect it in a government-approved scheme within 30 days of receiving it, and give the tenant the “prescribed information” about where and how it’s protected.
Each offers a custodial option (the scheme holds the money, usually free) and an insured option (you hold the money and pay a fee).
Under the Tenant Fees Act, deposits are capped: five weeks’ rent where the annual rent is under £50,000, and six weeks’ rent where it’s £50,000 or more.
If you don’t protect the deposit or give the prescribed information, a tenant can claim a penalty of one to three times the deposit — and it can undermine your ability to recover possession.
Return the deposit promptly, agreeing any deductions for damage (beyond fair wear and tear) or unpaid rent. If you can’t agree, the scheme’s free dispute-resolution service can adjudicate.
Within 30 days of receiving it — and you must give the tenant the prescribed information in the same window.
Any of the three approved schemes (DPS, MyDeposits, TDS); choose custodial (the scheme holds it) or insured (you hold it and pay a fee).
Five weeks’ rent if the annual rent is under £50,000; six weeks’ if it’s £50,000 or more.
The tenant can claim one to three times the deposit, and it can block possession routes.
Each scheme runs a free dispute-resolution service to adjudicate deductions at the end of the tenancy.
This guide is general information, not professional tax or legal advice. Rules, rates and thresholds change — check GOV.UK and take advice for your own situation.
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