Deposit Protection: The Cap, the 30 Days, and Why It Sinks Claims
A deposit handled wrongly is not just a fine waiting to happen. It is a statutory bar that can stop a possession claim dead, no matter how strong the arrears behind it.
The deposit rules read like admin, which is exactly why they catch people out. Get the cap, the scheme, or the paperwork wrong and you have handed a tenant’s solicitor the defence to your next possession claim.
How much you can take
Under the Tenant Fees Act 2019, the security deposit is capped at five weeks’ rent where the annual rent is under £50,000, and six weeks’ rent where annual rent is £50,000 or more. The five-week figure is calculated from the annual rent, not the monthly:
Monthly rent £900 → annual £10,800 → weekly £207.69 → maximum deposit £1,038.46(£207.69 × 5).
Our deposit cap calculator does this for any rent and flags the six-week tier automatically.
Holding deposits are separate
A holding deposit, taken while referencing runs, is capped at one week’s rent. It must be returned within 15 calendar days unless otherwise agreed, or put towards the tenancy deposit or first month’s rent once the tenancy begins.
Protect it within 30 days
The deposit must go into one of three government-approved schemes, DPS, TDS, or MyDeposits, within 30 days of receipt. This is the deadline that quietly decides possession claims.
Late protection is a statutory bar. Protect more than 30 days late and you cannot serve a valid Section 8 notice until you have paid the tenant a penalty of one to three times the deposit, and even then the court retains discretion.
Prescribed information matters as much as the money
Prescribed information is the set of documents served on the tenant within 30 days of receiving the deposit: the scheme details, how the deposit is protected, and how disputes are resolved. Failing to serve it is treated as seriously as failing to protect the deposit at all; both are statutory bars on Section 8 proceedings. Move a deposit between schemes and you must re-serve the prescribed information within 30 days of the transfer, even if nothing else about the tenancy changed.
Where it goes wrong
- Protecting the deposit but never serving the prescribed information
- Missing the 30-day window by a few days and assuming it can be fixed later
- Transferring schemes without re-serving the information
- Taking more than the five or six-week cap and treating the excess as a "fee"
Each of these is recoverable in principle, but only by paying a penalty first, and each stops a possession claim until it is put right.
Never the gap that blocks a claim
Compliance tracked, evidence ready
STEMHQ keeps certificates, arrears, and the court paper trail in one place, so the next rule change is a checklist, not a scramble.