This website uses cookies to improve user experience. By using our website you consent to all cookies in accordance with our Cookie Policy. Read more

Tenant Deposit Compensation Claims

By Brad Askew on 05/11/2014 with comments

Answer: Yes, a monetary remedy is possible where a landlord has not followed the legal procedures in place regarding the protection of a tenant’s deposit.


It is an obligation for landlords in England and Wales to put the deposits received by their tenants in a government authorised tenancy deposit protection scheme within 30 days of receipt. Failure to do this will mean a Section 21 Notice cannot be legally relied upon later. They must also provide tenants with prescribed information giving the details of their chosen scheme in which the funds are held, including contact details.

If after 30 days of paying the deposit to the landlord the tenant has not received any of this information, they should first contact the landlord to raise their concern. If there is no response on the matter from the landlord, it is recommended that tenants check with the 3 leading deposit protection schemes whose contact details can be found on the government’s website.

If the deposit is protected, tenants should make sure they have details of how much they have paid, what they need to do to get it back at the end of the tenancy and how to contact the dispute resolution service in place should they need to.

If it seems that after the 30 day period the landlord has not put the deposit into a protection scheme, the tenant now has the right to visit their local county court (see process here) and bring an action against the landlord of who will then be informed. If the court agrees that the landlord has failed to satisfy the obligation of protecting the deposit, it may order the landlord to return the deposit to the tenant or to a protection scheme on behalf of the tenant within 14 days. For example if a tenants deposit is £500 then the court would order the landlord to repay £500 with 14 days.

In terms of compensation, the court may order the landlord to pay the tenant up to 3 times the amount of the deposit, which is often the case in order to encourage landlords to follow tenancy procedures correctly and avoid leaving tenants in a vulnerable position. Therefore because the tenants deposit was £500, if their claim for compensation succeeds they will receive a further £500 minimum up to a further £1500 maximum.

Unlike the claim for a deposit this is a part 8 claim and therefore does not fall under the small claims category.  A tenant taking this route would of course incur court costs and perhaps legal fees if they seek representation, however given the court decides in the tenants favour it will hold the landlord accountable for these. 


Section 21 of the Housing Act 1988 allows a landlord to repossess a property of a shorthold tenancy once the fixed term has ended by giving the tenant a notice of 2 months. However where the landlord has failed to protect the tenants deposit this will not apply, meaning the landlord will need to return the deposit in order to regain possession of the property.

The courts acknowledge the importance of tenancy deposit schemes hence the heavy sanctions in place aimed at ensuring the compliance of landlords. A landlord who avoids using a scheme loses rights they hold in the property and incur significant costs as a result. This shows that where there are tenancy disputes and it is found that a landlord has not protected a tenants deposit correctly, the courts will favour the tenant from the first instance.


This article was written by Josh McFarlane who is a UWE law undergraduate.