Have you forgotten to protect the tenancy deposit?

The guide is currently being updated. Please come back later.

Note that the legal system for renting property changed in Wales on 1 December 2022 with the coming into force of the Renting Homes (Wales) Act 2016. The basic deposit protection requirements in England and Wales remain similar. However, the rules about recovering possession are different, and this guide explains the position separately where necessary.

Before we start – the Tenant Fees Act 2019

Under the Tenant Fees Act 2019, there is a strict limit (in England) on the amount of deposit you can take – you can find out all about this and use our handy calculation on the FAQ here.

If you have taken more than the allowed deposit, you should refund the excess as it will be a prohibited payment. Although some deposits held under agreements predating 1 June 2019 benefit from transitional protection. We look at this later.

Alternative schemes

There are now ‘alternative’ schemes where the tenant essentially pays a modest non-refundable fee which provides a guarantee to the landlord that he will receive up to a certain sum if the tenant vacates having caused damage or owing money. The protection for the landlord will depend on the terms of the specific scheme used.

The rules set out in this guide do not apply to these alternative schemes. However, note that tenants cannot be forced to use an alternative scheme and a ‘traditional’ deposit option must always be provided to them.

Members will find a FAQ on alternative schemes here.

The Renters Rights Act

Stage 1 of the Act came into effect on 1 May 2026, so (subject to transitional rules for possession proceedings already started) no-fault evictions in England are now abolished. However, the Act provides that most possession orders based on the Section 8 procedure will be conditional upon the landlord or his agent having dealt with deposits correctly. The deposit protection restrictions though do not apply to possession orders made on Grounds 7A or 14.

Deposit problems can prevent you recovering possession

In England, failing to deal with the deposit correctly can prevent the court from making a possession order on most grounds.
In Wales, deposit failures can prevent you from serving certain notices, including a section 173 notice.

The steps needed to put matters right depend on where the property is and what has happened.

What can you do?

There are a number of solutions, which depend on the precise circumstances of your case.

Which is why I have developed :

The Tenancy Deposit Compliance Checker

This is a special section of Landlord Law designed to help you with this problem. It guides you by a series of questions, to the answer which applies to YOUR tenancy situation.

Then, if necessary, you can regularise your position. Although note that this will not necessarily protect you from a financial penalty (more on this later in this guide).

The Tenancy Deposit Compliance Checker is a members-only service – so if you are not a Landlord Law member, you’ll need to join before you can use it.

Members – you will see some links under the trail icon. Only use these if you have already followed the full trail, or you may miss something important.

Please now select one of the following buttons:

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