Deposit Protection Law

The Law applies to Assured Shorthold Tenancies (ASTs) (including renewal contracts), created on or after 6th April 2007 in England and Wales. Scotland has a different Law regarding deposits.

If the tenancy started on or after 6 April 2007 the Tenant’s deposit must be protected in one of the government-approved schemes within 30 days of the deposits being paid by the Tenant(s).

There are 2 types of schemes:

  • Insurance-based schemes are where the Landlord holds onto the deposit and pays a fee to the scheme. The fee ensures that the deposit is always returned to the tenant (minus any legitimate deductions).
  • In custodial schemes, the Landlord hands the deposit over to the scheme. Interest earned on the deposit is used to fund the scheme.


If a deposit is not protected, the Landlord will be breaking the law. They will be unable to regain possession of the property using notice-only grounds for possession under Section 21 of the Housing Act 1988.

The Tenant can apply for a court order requiring the deposit to be protected, or for the Prescribed information to be given to them. If the court finds that the Landlord has failed to comply with these requirements, or that the deposit is not being held in accordance with an authorised scheme, the court must either:

  • Order the landlord to repay the deposit within 14 days of the issuing of the court order, or
  • Order the landlord to pay the deposit into the designated account held by the custodial scheme administrator.

The court can also order the Landlord to pay to the Tenant (or person who paid the deposit on his/her behalf) an amount equivalent to three times the deposit amount within 14 days of the making of the order.