Protecting a tenant’s deposit correctly is fundamental for landlords in England and Wales, especially if needing to use Section 21.

The Rules:

1. Protect the deposit in a government-approved scheme (DPS, MyDeposits, TDS) within 30 days of receiving it.
2. Provide the tenant with the scheme’s ‘Prescribed Information’ (details about the protection, scheme leaflet, etc.) within that same 30-day window.

Consequences of Failure for Section 21:

• You cannot serve a valid Section 21 notice if you haven’t complied with both rules above.
• To regain the ability to serve S21, you generally must first return the deposit to the tenant in full, or agree deductions with the tenant. Re-protecting late doesn’t automatically fix the S21 issue.
• You may also face a financial penalty claim from the tenant (1-3 times the deposit amount).

Takeaway: Deposit protection compliance is absolutely critical before considering a Section 21 notice. Check your dates and documentation rigorously.

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