Tenancy Deposit Rules UK — Protection, Caps and Returns

Deposit rules are where more landlords come unstuck than anywhere else — because the penalties bite twice: a compensation claim of up to three times the deposit, and the loss of Section 21 until the problem is fixed.

The 30-day rule

Within 30 days of receiving a deposit you must do two separate things: protect it in one of the government-approved schemes (DPS, TDS or mydeposits), and serve the prescribed information about the protection on the tenant. Landlords routinely do the first and forget the second — and the penalty applies either way.

The cap

Under the Tenant Fees Act 2019, deposits are capped at five weeks rent where the annual rent is below 50,000 pounds, and six weeks above. To calculate: multiply the monthly rent by 12, divide by 52, multiply by five. You cannot take a higher deposit for pets.

During the tenancy

Keep the deposit protected for the entire tenancy, including any renewal. If you renew onto a new fixed term, check your scheme’s rules — some require re-registration or fresh prescribed information.

At the end — deductions

You can deduct for unpaid rent, damage beyond fair wear and tear, and cleaning needed to return the property to its check-in condition. Fair wear and tear — carpets flattening, paint dulling — is not deductible. Every deduction should be evidenced: the signed check-in inventory, check-out photos, and invoices or quotes for the work. Betterment applies too: you cannot charge the full price of a new carpet for damage to a ten year old one.

Returning the deposit

Once the amount is agreed, return it within 10 days. Send the tenant a written statement itemising any deductions with the evidence for each — a clear statement resolves most disagreements before they become disputes.

Disputes

If the tenant disputes deductions, the scheme’s free alternative dispute resolution service decides. The burden of proof is on the landlord, and the single biggest factor in winning is a detailed, signed check-in inventory. Without one, expect to lose.