Renters' Rights Act 2026: The New Tenancy Deposit Rules

Tenancy deposits have long been a source of dispute between landlords and tenants. The Renters’ Rights Act 2026 has not removed the requirement to protect deposits — but it has made changes that affect how deposits work in the new rental landscape, and it has strengthened the consequences for landlords who do not comply.

This guide explains what has changed, what the rules are now, and what both landlords and tenants need to know to protect themselves.

What Is a Tenancy Deposit?

A tenancy deposit is a sum of money paid by a tenant at the start of a tenancy, held by the landlord or a third party as security against damage, unpaid rent, or other breaches of the tenancy agreement. The deposit must be returned to the tenant at the end of the tenancy, minus any lawful deductions.

Deposits for assured shorthold tenancies in England must be protected in a government-authorised tenancy deposit protection scheme. There are three such schemes: the Deposit Protection Service (DPS), MyDeposits, and the Tenancy Deposit Scheme (TDS).

What Has the Renters’ Rights Act Changed?

The Deposit Cap Remains in Place

The Tenant Fees Act 2019 introduced a cap on tenancy deposits of five weeks’ rent (for annual rents under £50,000) or six weeks’ rent (for annual rents between £50,000 and £100,000). The Renters’ Rights Act has not changed these caps. Any deposit that exceeds the permitted amount is unlawful and must be repaid.

Deposit Protection Linked to Possession Rights

This is where the Renters’ Rights Act has made a significant practical change. Under the old rules, a landlord who failed to protect a deposit or provide the prescribed information within 30 days could face a penalty of one to three times the deposit amount — but could still recover possession using Section 21.

With Section 21 abolished, a landlord who is not compliant with deposit protection requirements may find it harder to rely on certain possession grounds. Keeping deposit protection in order is therefore not just good practice — it is essential to maintaining your ability to recover your property through the courts.

Prescribed Information Must Be Provided

Within 30 days of receiving the deposit, the landlord must provide the tenant with prescribed information about the deposit protection scheme used. This includes the name and contact details of the scheme, the amount protected, how to apply to get the deposit back, what to do if there is a dispute, and the address of the rented property.

Failure to provide prescribed information, even if the deposit itself is protected, can result in a penalty of one to three times the deposit amount, and restrictions on your ability to recover possession.

How Deposit Deductions Work

At the end of the tenancy, a landlord can make deductions from the deposit for specific reasons, including unpaid rent, damage to the property beyond fair wear and tear, cleaning if the property is left in a worse state than at the start of the tenancy, and replacement of missing items that were listed in the inventory.

The landlord cannot deduct for fair wear and tear — the gradual deterioration that naturally occurs through normal use of a property. Deductions must be reasonable and evidenced, typically by a check-out inventory report compared to the check-in report taken at the start of the tenancy.

What Happens if There Is a Dispute?

All three tenancy deposit protection schemes offer a free alternative dispute resolution (ADR) service. If the landlord and tenant cannot agree on deductions, either party can refer the dispute to the scheme’s adjudicator. The adjudicator will review the evidence and make a binding decision on how the deposit should be divided.

Landlords who want to succeed in deposit disputes must maintain clear records: a detailed check-in inventory with photographs, a check-out inventory, records of any maintenance carried out during the tenancy, and evidence of the costs of any repairs or cleaning needed at the end.

What Landlords Must Do to Remain Compliant

The following steps are essential for every landlord taking a deposit:

Protect the deposit in a government-authorised scheme within 30 days of receipt
Provide the prescribed information to the tenant within 30 days
Ensure the deposit does not exceed the permitted cap
Carry out a detailed check-in inventory and give a copy to the tenant
Carry out a check-out inventory at the end of the tenancy
Return the deposit (or propose deductions with evidence) promptly at the end of the tenancy

What Tenants Should Do

At the start of the tenancy, check that your deposit has been protected and that you have received the prescribed information from the landlord. If you have not received this within 30 days of paying the deposit, you may have a claim against the landlord for a penalty.

Keep a copy of the check-in inventory and photograph the condition of the property at the start. Keep records of all communications with the landlord, particularly about repairs and maintenance. These records will be vital if there is a deposit dispute at the end of the tenancy.

Frequently Asked Questions

What is a rent repayment order?

A rent repayment order (RRO) is a separate remedy available to tenants where a landlord has committed certain offences, such as carrying out an illegal eviction or, in some cases, failing to comply with certain licensing requirements. It is not directly connected to deposit protection, but landlords should be aware that non-compliance with housing law can expose them to multiple forms of financial liability.

Can a landlord keep the whole deposit?

A landlord can only keep as much of the deposit as can be justified by evidence of damage, unpaid rent, or other legitimate deductions. If a dispute goes to the scheme’s adjudicator, the adjudicator will only award what is evidenced. Unsubstantiated claims will not succeed.

How long does a landlord have to return the deposit?

Once the tenancy has ended and deductions have been agreed (or a dispute referred to the scheme), the deposit should be returned promptly. Unreasonable delays in returning the deposit can form part of a deposit dispute claim.

What does the Renters’ Rights Act mean for existing deposits?

Existing deposits that were properly protected before the Renters’ Rights Act came into force remain valid. Landlords do not need to re-protect deposits for existing tenancies unless the tenancy terms change in a way that requires a new deposit to be taken. If in doubt, take legal advice.

What should landlords do now?

Review your records for every tenancy to ensure deposits are protected, prescribed information has been provided, and your inventory documentation is in order. If you are unsure about any aspect of your deposit compliance, seek legal advice promptly — the consequences of non-compliance have become more significant under the Renters’ Rights Act.

How Cook Legal Solicitors Can Help

At Cook Legal Solicitors, we advise both landlords and tenants on deposit protection disputes and compliance with tenancy law under the Renters’ Rights Act 2026. Whether you need to review your deposit procedures, pursue a deposit claim, or defend a claim made against you, our team is here to help.

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How the Renters’ Rights Act Changes Tenancy Deposit Rules in 2026