Protecting a tenant's deposit correctly is fundamental for landlords in England and Wales, especially if needing to use Section 21.
The Rules:
- Protect the deposit in a government-approved scheme (DPS, MyDeposits, TDS) within 30 days of receiving it.
- 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.
