When you pay a security deposit to your landlord or letting agent, they can't simply keep the money in their own bank account. Under the Housing Act 2004, they are legally required to protect it in one of three government-approved tenancy deposit schemes within 30 days of receiving it. The three schemes operating in England are the Deposit Protection Service (DPS), the Tenancy Deposit Scheme (TDS), and MyDeposits.
There are two types of scheme. In a custodial scheme (the DPS free service), the scheme holds the deposit money directly for the duration of the tenancy. In an insured scheme (offered by all three providers), the landlord keeps the deposit but pays a fee to the scheme, which insures it. Either way, the deposit is protected and can only be released at the end of the tenancy when both parties agree on how it should be split, or after a dispute is resolved through the scheme's adjudication process.
Within the same 30-day window, your landlord must also provide you with prescribed information: written details about which scheme holds the deposit, how the dispute process works, and the circumstances under which deductions may be made. Protecting the deposit and serving the prescribed information are two separate legal obligations, and failing on either one means that you could have a claim for compensation.
If your landlord doesn't protect your deposit or serve the prescribed information within 30 days, you can apply to the county court for compensation of between one and three times the deposit value. Under the Renters' Rights Act 2025, an unprotected deposit also blocks the landlord from using most Section 8 grounds for eviction, making it almost impossible for them to regain possession of the property until they fix the breach.
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