Deposit Protection DOs and DON’Ts for 2026

As soon as you receive a deposit on an Assured Shorthold Tenancy (AST) or equivalent, you must protect it in a government-approved scheme within 30 days of receipt. These schemes – like the Tenancy Deposit Scheme (TDS), MyDeposits, or DPS – are designed to safeguard tenants’ money and handle disputes if they arise.  

Why this matters:
Missing the deadline can lead to serious consequences, including financial penalties and restrictions on possession claims. Courts may order you to pay compensation of 1–3 times the deposit amount if you don’t comply.  

Protecting the deposit isn’t enough on its own. You must also give the tenant (and anyone who paid the deposit) the Required Prescribed Information and a scheme leaflet within the same 30-day window. This explains:

• Where the deposit is protected
• How to raise a dispute
• What to do at the end of the tenancy

Keeping dated evidence of how and when this information was served is good practice and protects you if compliance is challenged later.

The law sets a clear limit on how much you can ask for as a deposit. Under the Tenant Fees Act 2019, deposits in England are generally capped at five weeks’ rent (six weeks if annual rent exceeds £50,000).

This means:

• No “pet deposits” or additional compulsory upfront fees beyond the cap
• Holding more than the legal amount could be treated as a prohibited payment and affect your ability to regain possession

Keeping within the legal limit avoids unnecessary disputes and ensures you stay compliant.

A well-documented inventory is your best evidence if a deposit deduction is contested. Record the condition of rooms, fixtures, fittings, and appliances when tenants move in, using:

• Room-by-room notes
• Date-stamped photos or video walkthroughs
• Tenant acknowledgement

This makes disputes far easier to resolve fairly at the end of the tenancy.

Deposit protection isn’t just about paperwork. Good ongoing maintenance and communication during a tenancy can prevent issues from escalating into deposit disputes later. Periodic check-ins with proper notice help catch small problems early.

As the tenancy nears its end, remind your tenants what you expect regarding cleaning and property condition. A friendly email referencing your check-in inventory increases the chances of the property being returned in good shape – and the deposit being released without disagreement.

When claiming from the deposit:

• Only deduct for genuine tenant liabilities
• Always account for fair wear and tear
• Avoid using the full deposit for minor issues

Overly aggressive deductions are a common trigger for disputes. If tenants disagree, many schemes like the TDS offer online self-resolution tools to help both sides reach agreement.

Once you’ve agreed on any deductions, you should return the remainder within 10 days. If part of the deposit is disputed, release the undisputed amount promptly and communicate clearly about the rest.

If deductions are necessary, strengthen your case with:

• Check-in/check-out inventories
• Photos and videos
• Quotes or invoices
• Written communication

Claims without solid evidence are unlikely to succeed if challenged.

The rental landscape is changing in 2026, including:

• The shift to periodic tenancies under the Renters’ Rights Act 2025
• The end of Section 21 “no-fault” possession notices

Despite these reforms, the core requirements for deposit protection remain the same. Staying informed through trusted sources like the NRLA, TDS, and gov.uk ensures you remain compliant and confident as a landlord.