The short version
- Protect the deposit in a government-approved scheme within the legal time limit.
- Serve the "prescribed information" to the tenant, missing this is the classic error.
- Deposits are capped, taking too much is itself a breach.
- The penalty for getting protection wrong can be one to three times the deposit.
- A dated inventory is what makes a deduction defensible.
Deposit protection is one of the few areas of lettings where a small administrative slip carries an outsized financial penalty. The rules are not complicated, but they are strict, and the courts apply them strictly. The good news is that all five common mistakes are entirely avoidable with a simple routine.
00 · RecapThe basics, briefly
When you take a deposit on an assured shorthold tenancy in England, you must place it in one of the government-approved tenancy deposit protection schemes, do so within the legal time limit, and give the tenant the required information about where and how it is held. Get those three things right and you have avoided the large majority of deposit disputes before they start.
01 · TimingMissing the deadline
The deposit must be protected within a fixed window from the day you receive it. It is short, and "I was going to get to it" is not a defence. Protect the deposit the moment it lands, before keys change hands, and the clock is never a problem. Check the current time limit on gov.uk and treat same-day protection as your standard.
02 · PaperworkForgetting the prescribed information
This is the single most common, and most painful, mistake. Protecting the deposit is only half the duty. You must also give the tenant the prescribed information: a specific set of details about the deposit, the scheme and the tenant's rights. Protecting the money but failing to serve this information still counts as non-compliance.
Many landlords genuinely protect the deposit on time, then forget the prescribed information, and are surprised to find they are still exposed. Treat the two steps as one task that is not finished until both are done.
Where protection or prescribed information is not handled correctly, a tenant can bring a claim, and the court can order a penalty of between one and three times the deposit, on top of returning it. That is the figure that turns a clerical slip into a serious cost.
03 · AmountTaking too large a deposit
Under the Tenant Fees Act 2019, deposits are capped. For most tenancies the cap is five weeks' rent, with a higher cap for high-value tenancies above an annual rent threshold. Taking more than the cap is itself a breach, so work the figure out from the rent rather than rounding to a convenient number, and confirm the current cap on gov.uk.
04 · EvidenceNo inventory
A deposit only does its job if you can justify any deduction at the end. That requires a clear, dated inventory and condition report at the start of the tenancy, ideally with photographs, signed or acknowledged by the tenant. Without it, a deduction for damage becomes your word against theirs, and the scheme's adjudicator will favour the tenant where evidence is missing.
"You cannot deduct for a mark you cannot prove was not there on day one. The inventory is the deposit's insurance policy."
City Flats property team05 · ReturnMishandling the return
At the end of the tenancy, return the deposit promptly, and where you propose deductions, set them out clearly with the evidence behind each one. Disputed amounts can go to the scheme's free adjudication service. Slow, vague or unevidenced handling of the return is how an otherwise compliant tenancy still ends in a complaint.
- Protect on the day the deposit is received.
- Serve the prescribed information at the same time.
- Keep the deposit within the legal cap.
- Take a dated, photographed inventory signed by the tenant.
- Return promptly, with evidence for any deduction.
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