Deposit not protected: what it means and how a landlord can fix it

If a landlord does not protect a tenant’s deposit in an approved scheme within 30 days, the consequences are serious: a court can order the landlord to pay the tenant between one and three times the deposit, and an unprotected deposit makes it harder to regain possession of the property. The good news is that it is usually fixable. This guide explains what happens when a deposit is not protected, how much it can cost, the effect on eviction, and how to protect a deposit correctly so it does not happen in the first place.

What happens if a deposit is not protected?

A landlord taking a deposit on an assured tenancy must protect it in a government-approved scheme within 30 days of receiving it and serve the tenant with the prescribed information in the same window, as set out on gov.uk. Where that does not happen, the tenant can apply to the county court, which can order the deposit to be repaid or protected and can award the tenant a financial penalty on top. This applies even where the deposit was eventually returned, because the breach is the failure to protect it in time, not the loss of the money. Across the landlords using August, an unprotected deposit is rarely deliberate; it is almost always a missed 30-day deadline, which is exactly the kind of date worth automating.

How much compensation for a deposit not protected?

The penalty is between one and three times the value of the deposit, paid to the tenant, and it is in addition to returning the deposit itself. The court decides where in that range the award falls based on how serious the breach was, and a tenant can bring a claim both during the tenancy and after it has ended. Because the award is a multiple of the deposit, the cost of getting this wrong is often far larger than the deposit, which is why it is treated as a hard compliance matter rather than paperwork. The landlords who get caught are usually the ones who took the deposit, got busy, and only discovered the problem when they tried to regain possession.

Can you evict a tenant if the deposit is not protected?

This is the area where the law has changed, so old advice is now wrong. Section 21 no-fault evictions have been abolished, which means the previous rule that an unprotected deposit invalidated a Section 21 notice no longer applies, simply because Section 21 no longer exists. Possession is now sought through the Section 8 grounds, set out in our guide to the grounds for possession. An unprotected deposit does not erase your ability to seek possession, but it leaves you exposed to the one-to-three-times penalty and to a counterclaim from the tenant, which can complicate and delay the process. The practical answer is to put the deposit right before you pursue possession: either return the deposit to the tenant or protect it properly and serve the prescribed information, then proceed on the appropriate ground.

How to protect a tenancy deposit correctly

Avoiding all of this is straightforward. Protect the deposit in one of the approved schemes within 30 days of receiving it, and within the same 30 days serve the tenant with the prescribed information, which tells them which scheme holds the deposit and how to get it back. Make sure the deposit itself is within the cap of five weeks’ rent for most tenancies, as covered in our guide to the tenancy deposit rules, and keep a record of the protection certificate and the date you served the prescribed information. Our guide to the tenancy deposit scheme explains how the schemes work and the choice between them. The single thing that prevents almost every unprotected-deposit problem is tracking the 30-day deadline from the day the money arrives, which is what the compliance checklist is for.

What to do if you have already missed the deadline

If the 30 days have passed, act quickly, because the position only gets worse the longer it is left. Protecting the deposit late does not remove the tenant’s right to claim for the period it was unprotected, but it limits further exposure and is better than leaving it unprotected. Returning the deposit to the tenant is the other route, and it is often the cleaner one where you are about to seek possession. Either way, serve the prescribed information once the deposit is protected, keep a record of what you did and when, and where a tenant has already raised a claim or the amounts are significant, take legal advice before you respond. A late fix handled openly is almost always better than hoping the breach goes unnoticed.

Frequently asked questions

What happens if my deposit is not protected?

The landlord can be ordered by a court to repay or protect the deposit and to pay the tenant a penalty of one to three times its value, and this applies even if the deposit was later returned. It also makes regaining possession more difficult.

How much compensation can a tenant claim for an unprotected deposit?

Between one and three times the deposit, decided by the court, on top of the return of the deposit itself. A claim can be brought during the tenancy or after it has ended.

Can a landlord evict a tenant if the deposit is not protected?

Section 21 has been abolished, so the old rule that an unprotected deposit blocked a Section 21 notice no longer applies, but an unprotected deposit still exposes a landlord to the penalty and to a counterclaim. The safe course is to return or properly protect the deposit before seeking possession.

How long does a landlord have to protect a deposit?

Thirty days from receiving it, within which the landlord must also serve the prescribed information. You can start for free and track that deadline against every tenancy so a deposit is never left unprotected.

This article is intended for general informational purposes only and does not constitute legal, financial, or professional advice. Landlord and tenant law is subject to change, and the information in this article reflects the position at the time of writing. You should always seek independent legal or professional advice before taking any action in relation to your property or tenancy.