Failure to protect a tenant's deposit correctly is one of the most common compliance failures in the private rented sector — and one of the most expensive. The penalty is up to three times the deposit amount, plus the return of the deposit itself. For a typical deposit of £1,500, that's a potential penalty of £6,000.
The Deposit Protection Rules
Under the Housing Act 2004, landlords must protect any deposit received from a tenant in a government-approved tenancy deposit scheme within 30 days of receiving it. There are three government-approved schemes:
The Prescribed Information Requirement
Within 30 days of receiving the deposit, landlords must also provide tenants with 'prescribed information' about the deposit. This includes:
Common Mistakes
Mistake 1: Protecting the deposit late. The 30-day deadline runs from the date the deposit is received, not the date the tenancy starts. If you receive the deposit before the tenancy starts, the clock is already ticking.
Mistake 2: Providing incorrect prescribed information. The prescribed information must be accurate and complete. Any errors can invalidate the protection and expose the landlord to penalties.
Mistake 3: Failing to re-protect when a new tenancy starts. If a tenant's tenancy is renewed or a new tenancy is granted for the same property, the deposit must be re-protected and new prescribed information provided.
Mistake 4: Not keeping records. Landlords must be able to prove that the deposit was protected on time and that the prescribed information was provided. Keep copies of all documentation.
RentersComply's Deposit Protection Manager tracks all deposits, reminds you of the 30-day deadline, and generates the prescribed information automatically.