0151 665 0320If you are a landlord, getting deposit protection right is one of the simplest ways to stay out of court – and one of the easiest things to get wrong. Knowing how to protect a tenancy deposit correctly is not just good practice; it is a legal requirement under the Housing Act 2004. Fail to do it properly and a court can order you to pay your tenant between one and three times the deposit, on top of returning the deposit itself. This guide sets out the landlord deposit rules 2026 as a clear, step-by-step compliance checklist so you can avoid a penalty and, since 1 May 2026, keep your ability to regain possession.
Why compliance matters more than ever
Two things make 2026 a year to take deposit compliance seriously.
First, the financial penalty has not gone away. Under sections 213 to 215 of the Housing Act 2004, if you do not protect the deposit and serve the required information correctly, your tenant can bring a claim and the court can award them one to three times the deposit per breach – and tenants have up to six years to act.
Second, the Renters’ Rights Act 2026, in force since 1 May 2026, abolished Section 21 “no-fault” evictions. Landlords now rely on Section 8 grounds for possession – and possession is generally barred under most Section 8 grounds unless the deposit was properly protected and the prescribed information was served. In other words, getting deposit protection wrong can now stop you regaining your own property.
Step 1 – Check the deposit is within the legal cap
Before anything else, make sure the deposit you took is lawful. Under the Tenant Fees Act 2019, a tenancy deposit is capped at:
- Five weeks’ rent where the annual rent is under £50,000; or
- Six weeks’ rent where the annual rent is £50,000 or more.
If you took more than the cap, return the excess. An over-cap deposit is a separate problem from protection and should be fixed straight away.
Step 2 – Protect the deposit in an authorised scheme within 30 days
You must place the deposit in one of the three government-authorised tenancy deposit schemes within 30 days of receiving it:
- Deposit Protection Service (DPS)
- MyDeposits
- Tenancy Deposit Scheme (TDS)
There are two types of protection: custodial (the scheme holds the money) and insured (you hold the money and pay the scheme to insure it). Either is fine, but the 30-day deadline is strict. Diarise it the moment the deposit lands.
Step 3 – Serve the prescribed information within 30 days
This is the step landlords most often miss. Protecting the money is only half the job. You must also serve the prescribed information on the tenant – and on anyone who paid the deposit on the tenant’s behalf, such as a guarantor – within the same 30 days. Serving the prescribed information is a legal duty for every prescribed information landlord, not an optional extra.
The prescribed information must include, among other things:
- The amount of the deposit and the address of the property;
- The name, address and contact details of the scheme and its dispute service;
- Your name and contact details (and any agent’s);
- The circumstances in which all or part of the deposit may be retained;
- Confirmation (often via the scheme’s prescribed-information certificate) and the scheme’s information leaflet.
The courts take completeness seriously. Established case law shows that leaving out required elements of the prescribed information can amount to non-compliance even if the money itself was protected. Treat the prescribed information as a checklist where every box must be ticked.
Step 4 – Keep proof you served it
If a dispute arises, the burden is on you to show you complied. Keep:
- A dated copy of the prescribed information you served;
- Evidence of how and when you served it (email, recorded delivery, or a signed acknowledgement);
- The scheme’s confirmation or certificate.
Good record-keeping is the difference between a quick answer and an expensive argument.
Step 5 – Re-check on renewal and at key moments
Compliance is not a one-off. Be especially careful when:
- A fixed term ends and the tenancy becomes periodic. Established case law has treated the rollover into a statutory periodic tenancy as the creation of a new tenancy, which can trigger protection duties again. If in doubt, re-serve.
- You renew or sign a new agreement. Confirm the deposit remains protected under the correct tenancy and re-issue the prescribed information.
- Rent changes in a way that affects whether the deposit still sits within the cap.
Step 6 – Return the deposit promptly and fairly at the end
When the tenancy ends, return the deposit promptly, less only sums you can properly justify. You cannot deduct for fair wear and tear vs damage – only for actual damage, unpaid rent, or genuine breaches, supported by evidence. Unjustified deductions lead to disputes and can sour an otherwise compliant tenancy. If you want a fuller breakdown of how deductions are judged, our guide on what landlords can and cannot deduct walks through it.
The compliance checklist
| Step | Action | Deadline |
|---|---|---|
| 1 | Confirm deposit is within the 5/6-week cap | Before taking it |
| 2 | Protect in DPS, MyDeposits or TDS | Within 30 days |
| 3 | Serve full prescribed information on tenant and anyone who paid it | Within 30 days |
| 4 | Keep dated proof of service and scheme confirmation | Ongoing |
| 5 | Re-check on renewal / periodic rollover | At each renewal |
| 6 | Return deposit promptly, deduct only what you can justify | End of tenancy |
What a breach can cost you
If you fall short, the tenant can apply to the court. The court can order you to pay one to three times the deposit per breach, plus return of the deposit. The exact multiplier is at the court’s discretion, judged on the seriousness of the failure. With a six-year claim window, a single missed step can resurface long after the tenant has moved on. The simplest way to avoid a deposit penalty is to follow the six steps above every single time. For more on how the new regime ties possession to compliance, see our explainer on the Renters’ Rights Act 2026 deposit rules.
Frequently asked questions
Does protecting the money mean I have complied?
No. You must both protect the deposit in an authorised scheme and serve the full prescribed information within 30 days. Missing the prescribed information is a breach in its own right.
Do I have to re-protect when a tenancy becomes periodic?
You should review your position carefully. Case law has treated a statutory periodic tenancy as a new tenancy for these purposes, so re-serving the prescribed information is the safer course. If unsure, take advice.
Can a deposit failure really stop me evicting?
Yes. Since 1 May 2026, possession is generally barred under most Section 8 grounds unless the deposit was properly protected and the prescribed information served. Compliance now protects your possession rights as well as your wallet.
How long can a tenant claim for?
Tenants generally have up to six years from the breach to bring a deposit claim under the Limitation Act 1980, even after they have left.
This article is general information, not legal advice. For advice on your own situation, contact Cook Legal Solicitors for a free deposit check.
Unsure whether your deposits are properly protected? Cook Legal Solicitors can help you understand where you stand. While we act for tenants, understanding the rules from both sides is the best way to stay compliant. For a free deposit check, call 0151 665 0320.