How to Protect a Tenant's Deposit (and Serve Prescribed Information)

How to protect a tenancy deposit in England within 30 days — DPS, TDS or mydeposits — and serve the prescribed information correctly to avoid 1–3× compensation and Section 8 problems.

Summary

You have 30 days from receipt of the deposit to (a) protect it in an authorised scheme and (b) serve the prescribed information. Miss either and you owe 1–3× the deposit AND face Section 8 problems.

Quick answer

Protect the deposit in an authorised scheme (DPS, TDS or mydeposits) and serve the prescribed information within 30 days of receipt. Failure to do either can cost 1–3× the deposit and weaken any later Section 8 possession claim.

Introduction

Deposit protection is one of the most-failed compliance areas in the English PRS. The rules are simple, the penalty is severe (1–3× the deposit plus the deposit returned). And although Section 21 is gone, deposit failures still impact Section 8 claims, the PRS Database register, and tenant ADR. Here's how to get it right.

Steps

1. Pick an authorised scheme — Three schemes are authorised for England: Deposit Protection Service (DPS — custodial, free), Tenancy Deposit Scheme (TDS — custodial or insured), and mydeposits (insured or custodial). Custodial means the scheme holds the cash; insured means you hold it and the scheme insures it.

2. Protect within 30 calendar days of receipt — The 30 days runs from the date the deposit hits your account — not from move-in, not from contract signing. Late protection still triggers the 1–3× compensation award and damages your evidence base for any later possession claim.

3. Serve the prescribed information in writing — Within the same 30 days, serve the prescribed information on every tenant AND every 'relevant person' (e.g. a parent who paid the deposit). The scheme provides a template that includes scheme details, deposit amount, property address, landlord/agent contact, ADR options, deductions criteria, and how to challenge.

4. Get the tenant to sign acknowledgement — Best practice: have the tenant sign a copy confirming they received the prescribed information and the scheme leaflet. Keep the signed copy permanently with the tenancy file — judges still ask for this in defended Section 8 claims and ADR adjudications.

5. Re-issue prescribed information when the deposit changes — Under the new assured periodic regime there are no fixed-term renewals to worry about, but if you increase the deposit (e.g. after a pet request acceptance), the 30-day clock restarts on the additional amount and prescribed information must be re-served.

Common pitfalls

• Holding 'on account' for a few days before transferring to the scheme and missing the 30-day window.
• Forgetting to serve prescribed information on the tenant's parent who paid the deposit (parent counts as a relevant person).
• Using an out-of-date prescribed information template — schemes update the template periodically.
• Taking more than 5 weeks' rent (or 6 weeks if annual rent ≥ £50k) — the excess is a prohibited payment under the Tenant Fees Act 2019.

FAQ

What's the maximum deposit I can take? 5 weeks' rent where the annual rent is under £50,000 (England), or 6 weeks' rent where annual rent is £50,000 or more. Any excess is a prohibited payment that must be returned.

Does deposit protection still matter now Section 21 is abolished? Yes — very much so. The 1–3× deposit compensation award still applies, deposit failures still damage Section 8 claims, and PRS Database registration requires evidence of compliant deposit handling. Don't treat deposit rules as optional.

Can I refuse to return the deposit at the end? Only for evidenced, fair-wear-and-tear-adjusted deductions. The scheme's free Alternative Dispute Resolution (ADR) decides any deduction the tenant disputes. Inventories with date-stamped photos are the single biggest factor in winning ADR.

References: - GOV.UK — Tenancy deposit protection — https://www.gov.uk/tenancy-deposit-protection