What are your obligations as a landlord?

Prescribed information

Tenancy deposit protection legislation under Section 212-215C Housing Act 2004 requires landlords to provide tenants with specific details about their protected deposit within 30 days of receiving it. This prescribed information is detailed in The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 and includes:

• The name and contact details of the deposit protection scheme used.
• The scheme’s dispute resolution process.
• The landlord’s name and contact details.
• Information on how the tenant can apply to get the deposit back.
• The circumstances under which some or all of the deposit may be withheld.
• Confirmation of the amount paid and the property address.
• A deposit protection certificate that shows proof of the deposit being entered into a relevant scheme.

Landlords frequently breach these rules without realising. Common errors include:

• Providing the prescribed information too early, before the deposit is paid, makes it legally invalid.
• Delivering the prescribed information late or failing to provide it at all.
• Omitting required details, such as tenancy agreement clauses outlining when deductions can be made.
• Failing to sign the prescribed information.
• Not updating prescribed information when changes occur, such as a landlord’s name change due to marriage.

Deposit protection

Under the Housing Act 2004, landlords must protect tenancy deposits in a government-approved authorised tenancy deposit scheme within 30 days of receiving them. There are three approved schemes for keeping a deposit paid:

• Deposit Protection Service (DPS)
• MyDeposits
• Tenancy Deposit Scheme (TDS)

A common mistake landlords make is assuming that setting aside the money in a separate account - such as a ring-fenced business account or even a locked safe - is sufficient. This is incorrect. The deposit must be registered with one of the official schemes to comply with the law.

Other common breaches include:

• Protecting the deposit after the 30-day deadline.
• Accepting a deposit amount that exceeds the legal limit (five weeks’ rent for tenancies under £50,000 per year).
• Not transferring a deposit into a new protection scheme when buying a property with sitting tenants. In this case, the new landlord is deemed to have received the deposit on the completion date and must protect it within 30 days.

What are the risks if you don’t meet these obligations?

Failure to comply with deposit protection regulations can lead to serious financial and legal repercussions for landlords.

Financial penalties

The penalties for non-compliance are severe. If a landlord fails to protect a deposit or provide valid prescribed information, the tenant can claim compensation of up to three times the deposit amount per breach. Each renewal or transition to a periodic tenancy is treated as a separate tenancy, meaning multiple breaches can quickly accumulate large penalties.

For example:

• A £1,000 deposit, if unprotected, could result in a penalty of up to £3,000 per breach.
• If a tenancy was renewed twice and the landlord failed to provide prescribed information on each occasion, the total penalty could reach £9,000.

There have been cases where tenants have been awarded tens of thousands of pounds in compensation due to repeated breaches across multiple tenancies.

Possession and eviction complications

Landlords who fail to meet deposit protection obligations may find it difficult to recover possession of their property.

• If the deposit has not been properly protected, a landlord cannot serve a valid Section 21 notice to end the tenancy.
• By incorrectly handling prescribed information, Section 21 notices cannot be served and tenants can raise counterclaims in rent arrears cases.
• In disputes over deposit deductions, protection schemes are unlikely to rule in favour of the landlord if any part of the deposit was mishandled.

These legal barriers can lead to costly delays, missed rental income and prolonged disputes with tenants.

How can we help?

Understanding and complying with deposit protection laws can be challenging, especially given the strict deadlines and technical requirements. Many landlords unintentionally breach these rules, exposing themselves to financial risks and legal disputes.

At AST Assistance, we can help landlords to understand their obligations for supplying the correct prescribed information to tenants and remain compliant with deposit regulations.

Expert guidance can help landlords:

• Review and correct their deposit protection processes.
• Ensure prescribed information is served correctly and on time.
• Address compliance issues before tenants raise claims.
• Resolve disputes efficiently, reducing financial and legal exposure.

By staying informed and seeking professional advice from experts such as AST Assistance, landlords can protect their interests and avoid costly mistakes should a tenant dispute arise. Contact us by calling 01706 619 954 or by using our contact form.