Almost all tenancies involve the tenant giving the landlord a security deposit, which is intended to cover unpaid rent or damage to the property or furnishings at the end of the tenancy. But the deposit doesn’t belong to your landlord to do with as they please – there are legal requirements for how the money must be handled and protected. And if the landlord fails to meet those requirements, tenants may have grounds for a claim.  

How must a deposit be protected? 

Landlords can’t just hold onto the funds themselves; they must place the deposit in a government-approved deposit protection scheme. Three such schemes currently exist:

• the Deposit Protection Service 
• the Tenancy Deposit Scheme 
• MyDeposits‍

Consequences of non-compliance

Tenants can apply to the county court for compensation of between one and three times the deposit amount, and the deposit itself must still be returned or otherwise accounted for. Since the Renters' Rights Act 2025 abolished section 21 "no-fault" evictions, non-compliance can also prevent a landlord from obtaining a possession order altogether, other than on limited grounds such as serious criminal or anti-social behaviour, until the breach is remedied.

What are the most common grounds for a claim?

Your deposit was never protected

If the landlord never placed the deposit in an approved scheme, tenants have grounds for a claim. This is probably the simplest breach to prove, as tenants or their solicitors can check with the three approved providers to quickly ascertain if the deposit is registered.

Your deposit was protected, but late

If the landlord protected the deposit correctly, but waited longer than 30 days after receiving it to do so, this also constitutes a breach of their obligations. Again, the date the deposit was protected can be obtained through the schemes themselves relatively easily. 

Prescribed information was missing or incorrect

Even a correctly protected deposit can give rise to a claim if tenants weren’t provided with the full information required by law: what scheme was used, how it works, and how disputes are handled. The same deadline applies here; the landlord must provide this information to a tenant within 30 days of receiving their deposit. 

The landlord made unfair deductions

At the end of a tenancy, landlords must be able to justify any deductions with evidence – typically a comparison between check-in and check-out inventories, invoices, or receipts. Deductions that go beyond fair wear and tear, or that aren't properly evidenced, can be challenged.

Delayed return

If your landlord delays the return of your deposit without a good reason – for example, there’s no dispute over the amount to be returned, but they simply take their time in transferring you the money – this can also be grounds for a claim.

How are deposit disputes resolved?

If the dispute is only about the amount of money to be returned (for example, disagreement over a specific deduction), the deposit scheme's free Alternative Dispute Resolution service can adjudicate. Both parties agree to be bound by the outcome, and no court fee is required. If the matter can’t be resolved via the scheme’s own dispute process, then court action may be necessary. 

Small claims court

As the majority of tenancy deposit claims involve relatively small amounts of money, if they can’t be settled through the deposit protection scheme’s own dispute resolution service, they are usually dealt with in the small claims court. This keeps costs proportionate to the amounts at stake. However, it can be worth seeking legal advice to ensure your claim is correctly framed, and you have the right evidence to support it.

County Court claims

Where the dispute concerns a landlord's failure to protect the deposit or serve prescribed information, or where a landlord refuses to engage with ADR, a claim can be issued in the County Court. The court can order the return of the deposit and award compensation.

What does the law say about tenancy deposits?

Tenancy deposit protection is governed by Chapter 4 of Part 6 of the Housing Act 2004, as amended over time by the Localism Act 2011, the Deregulation Act 2015 and, most recently, the Renters' Rights Act 2025. Among other things, these provisions require that landlords protect deposits in a government-approved scheme and supply their tenant with prescribed information within 30 calendar days of receiving the deposit. Failing to comply leaves them open to legal action and potentially a compensation claim of one to three times the deposit amount.

Landlords who are in breach of their obligations to correctly protect tenancy deposits may also be barred from being granted a possession order under Section 8 of the Housing Act 1988 until the situation is remedied (although limited exceptions apply, such as possession on the grounds of serious criminal or anti-social behaviour).

When should tenants seek legal advice?

As soon as you suspect there’s an issue with your deposit – it wasn’t protected correctly, you weren’t properly informed about the protection scheme, or you’re facing unfair deductions – it’s worth seeking legal advice. The sooner you understand whether a legal breach has occurred, the sooner you can take action to protect your rights. Speak to Complex Law for plain-English advice on tenancy deposit disputes.

‍