📅 The rules in brief

• Protect it within 30 days of receiving the deposit.
• Serve the prescribed information on the tenant within the same 30 days. This sets out which scheme holds the deposit, how to get it back and how disputes are handled.
• Cap it at five weeks’ rent where the annual rent is under £50,000, or six weeks’ rent above that.
• Re-protect it if the deposit moves to a different scheme, for example when you change agent, and serve new prescribed information.

🏦 The three approved schemes

There are three government-approved schemes in England: the Deposit Protection Service (DPS), mydeposits and the Tenancy Deposit Scheme (TDS). Each offers two types of protection:

• Custodial: the scheme holds the money for the length of the tenancy. It’s free to use.
• Insured: you or your agent hold the money, and pay a fee to the scheme to insure it. The scheme steps in if the money isn’t returned when it should be.

Custodial is simpler for most private landlords. Insured schemes are more common with agents, who hold deposits in a protected client account.

🔚 At the end of the tenancy

Agree any deductions with the tenant, backed by the check-in inventory, the check-out report and photos. Undisputed amounts should be returned promptly. If you can’t agree, the scheme’s free dispute resolution service decides, and it looks at the evidence, not who argues hardest. Fair wear and tear can’t be deducted.

⚠️ What happens if you don’t protect a deposit

• The tenant can take you to court, which can order you to pay them between one and three times the deposit.
• The court can also order the deposit to be returned or protected.
• An unprotected deposit can create serious problems when you need to regain possession.

These claims can also be made after the tenancy has ended, so mistakes don’t go away on their own.

🔄 What about deposit replacement schemes?

Some landlords offer deposit replacement products instead. The tenant pays a smaller, non-refundable fee, and the provider covers losses at the end of the tenancy up to an agreed limit. They can help tenants who struggle with upfront costs, but check the cover limits and how claims are handled before you rely on one.

🏘️ A note for HMO landlords

The same rules apply when you let rooms on individual tenancies. Each tenant’s deposit must be protected separately, with its own prescribed information.

👋 How Portus handles it

On our full property management service, we register every deposit, serve the prescribed information, and handle deductions and disputes at the end of the tenancy, with the inventory evidence to back them up. If you’re switching from another agent, we’ll arrange the deposit transfer too. More in our guide to switching letting agents.