Unprotected deposit
An unprotected deposit is a tenancy deposit that a landlord has failed to place in a government-approved protection scheme within 30 days of receiving it, or for which the landlord has not served the prescribed information in that time. Under section 214 of the Housing Act 2004, a court must order the landlord to repay the deposit and to pay the tenant a penalty of between one and three times its value.
The penalty for failing to protect a deposit
Where a court finds that a deposit was not protected or that the prescribed information was not served in time, the penalty is not discretionary in principle: the court must order the landlord to pay the tenant a sum of between one and three times the deposit, on top of returning the deposit itself. The multiple is at the court's discretion, judged on the seriousness of the breach. The exposure can also stack, because each renewal or move into a periodic tenancy with the deposit still unprotected can count as a fresh breach.
Late protection still counts as a breach
Protecting the deposit late, before any court hearing, does not erase the breach. From working with landlords who discover a missed deposit after the fact, the practical effect is that a court will usually award a lower penalty for late protection, often one times the deposit rather than three, but the tenant's right to claim remains. Returning the deposit in full has the same mitigating effect on the penalty without removing the underlying liability.
How long a tenant has to claim
A tenant can bring a claim for up to six years after the breach, and the right survives the end of the tenancy. A deposit that was never protected therefore remains a live liability long after the tenant has moved out, which is why landlords using August are prompted to confirm protection and prescribed information at the start of every tenancy rather than treating it as a one-off task.
How a landlord can put it right
The remedy is to protect the deposit in an approved scheme and serve the prescribed information without delay, or to return the deposit to the tenant in full. Either step limits the exposure and is viewed favourably by a court, but neither removes the penalty already incurred. A landlord who finds an unprotected deposit should act immediately and take advice before serving any notice that depends on deposit compliance. Our guide on how to protect a tenancy deposit sets out the steps.
Unprotected deposits and possession in 2026
An unprotected deposit now blocks possession itself, not just the old no-fault route. Until 1 May 2026 the bar applied only to Section 21 notices. The Renters' Rights Act 2025 abolished Section 21 and, by amending section 215 of the Housing Act 2004, made deposit protection a gateway condition for possession on assured tenancies. A court can now make a possession order on a Section 8 ground only if the deposit is held in an authorised scheme, with the anti-social behaviour grounds the main exception. Unlike the old Section 21 rules, this bar can be cured: a landlord who protects the deposit late, or returns it, and serves the prescribed information before serving the Section 8 notice can still rely on the grounds. The separate compensation penalty under section 214 applies regardless of any of this. This position is correct as of June 2026.
Frequently asked questions
What happens if a landlord does not protect a deposit?
A court can order the landlord to repay the deposit and to pay the tenant a penalty of one to three times its value under section 214 of the Housing Act 2004. The court fee for the tenant to bring the claim is currently £377, which they can recover if they win.
Can a landlord fix an unprotected deposit by protecting it late?
Protecting late reduces the likely penalty, often to one times the deposit, and is better than not acting. It does not remove the breach or the tenant's right to claim compensation.
Can a tenant claim after they have moved out?
Yes. A tenant can bring a claim for up to six years from the date of the breach, whether or not the tenancy has ended.
