Deposit Protection: The Rules and Mistakes That Cost Landlords

Today is 1 May 2026. The Renters Rights Act is now in force. Section 21 is abolished, fixed terms no longer exist, and every assured tenancy in England is periodic.

With no fixed end date built into any tenancy, the moment a dispute arises when a tenant eventually leaves is harder to predict. There is no natural break in the cycle when a landlord can reset the slate. Deposits must remain protected for however long the tenancy runs, whether that is 14 months or 7 years.

That makes getting deposit protection right from day one more important than before. The rules themselves have not changed under the Renters Rights Act. But one of the consequences of getting them wrong has: unprotected deposits now block landlords from using most Section 8 grounds to seek possession, regardless of what the tenant has done wrong.

Here is what the rules require, and the mistakes that regularly end up costing landlords in county court.

The 30-Day Rule

Under Section 213 of the Housing Act 2004, a landlord must do two things within 30 days of receiving a deposit:

1. Register the deposit with a government-authorised scheme.
2. Serve the prescribed information on the tenant.

Both deadlines are the same: 30 days from the date the deposit is received. Meeting one without the other does not put a landlord in compliance. Both steps must be completed within the window.

The 30-day clock starts on the date the deposit is actually received. If a landlord takes a holding deposit that converts into a tenancy deposit on the start of the tenancy, the 30-day window begins at the point it is held as a tenancy deposit.

The Three Approved Schemes

There are three government-authorised schemes in England and Wales:

• Tenancy Deposit Scheme (TDS): tenancydepositscheme.com
• Deposit Protection Service (DPS): depositprotection.com
• mydeposits: mydeposits.co.uk

All three are government-backed. Each operates in two forms: custodial and insured.

Custodial means the scheme holds the deposit money for the duration of the tenancy. It leaves the landlord's account on registration and sits with the scheme until the end of the tenancy, when the scheme pays out whatever has been agreed between landlord and tenant. Custodial protection is free to use.

Insured means the landlord holds the deposit themselves. The scheme insures it, guaranteeing the tenant can reclaim their money if the landlord defaults or fails to return it properly. Landlords pay a fee for insured cover, and the cash stays in their account during the tenancy.

Neither model is better for every situation. Custodial suits landlords who want a clean administrative separation between their money and the tenant's. Insured suits those who want to retain access to the funds during the tenancy, subject to scheme rules. Either way, the legal protection offered to the tenant is equivalent.