What is tenancy deposit protection?
Deposits taken for assured tenancies must be protected in a government-approved scheme within 30 days, with the prescribed information given to the tenant. When a tenanted property is sold, arrangements must be made to transfer each deposit and its protection to the buyer.
Read more in our guide: Selling a portfolio with tenants
Key facts at a glance
| Item | Detail |
|---|---|
| Deadline to protect | Within 30 days of receiving the deposit |
| Prescribed information | Must be given to the tenant within the same 30 days |
| Maximum deposit | 5 weeks' rent if annual rent is under £50,000; 6 weeks' rent if £50,000 to £100,000 |
| Holding deposit | Up to 1 week's rent |
| Approved schemes in England | Deposit Protection Service, mydeposits and Tenancy Deposit Scheme |
| Penalty for failing to protect | 1 to 3 times the deposit, and most possession grounds become unavailable until it is resolved |
How Deposit Protection Works
Since 6 April 2007, landlords in England and Wales who take a deposit for an assured shorthold tenancy, and now an assured periodic tenancy, must protect it in a government-approved scheme. There are two types:
- Custodial, where the scheme holds the money free of charge until the end of the tenancy.
- Insured, where the landlord or agent keeps the money and pays a fee to the scheme, which guarantees repayment.
At the end of the tenancy, the deposit must be returned within 10 days of agreement. If there is a dispute, the scheme's free adjudication service decides how it is split.
Transferring Deposits When You Sell
When a tenanted property is sold, the deposits belong to the tenants, so they have to move with the tenancies to the new landlord.
- List every deposit, the scheme, the certificate number and the date protected in the sale pack.
- Agree in the contract how deposits will be dealt with. Custodial deposits can usually be transferred between landlords within the scheme; insured deposits held by you are normally credited to the buyer on the completion statement.
- The buyer protects the deposits in their chosen scheme where needed and gives the tenants new prescribed information.
- Tell the tenants in writing who now holds their deposit.
Unprotected or late-protected deposits are a red flag in due diligence. Buyers may ask for an indemnity or a retention from the price, because the penalty and the restriction on possession pass to whoever is the landlord.
Common Problems Found in Due Diligence
- Deposits taken years ago, before 2007 or by a previous agent, that were never protected.
- Prescribed information not served, or not re-served when tenancies renewed.
- Deposits above the five-week cap taken after June 2019.
- Records that do not match the scheme, for example a tenant who has since left.
Fix these before marketing where possible. A clean deposit schedule makes a tenanted sale faster.
Official Sources and Further Reading
General information for landlords in England, checked against official sources in October 2026. It is not tax, legal or financial advice: speak to a qualified accountant or solicitor about your own circumstances.
Frequently Asked Questions
Deposits taken for assured tenancies must be protected in a government-approved scheme within 30 days, with the prescribed information given to the tenant. When a tenanted property is sold, arrangements must be made to transfer each deposit and its protection to the buyer.
Thirty days from receiving it, and the prescribed information must be given to the tenant within the same period.
Five weeks' rent where the annual rent is below £50,000, and six weeks' rent where it is £50,000 or more, under the Tenant Fees Act 2019.
They pass to the buyer, who becomes responsible for protecting them and returning them at the end of the tenancy. The arrangements are agreed in the sale contract and shown on the completion statement.
A court can order the landlord to pay the tenant between one and three times the deposit, and the landlord cannot use most possession grounds until the problem is resolved.
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