Tenancy Deposit Protection 2026: The 5-Week Cap and Prescribed Information Explained

The deposit cap: how much can you take?

Under the Tenant Fees Act 2019, the security deposit you can take from a tenant is capped at 5 weeks' rent. This is calculated as:

(Weekly rent) x 5 = Maximum deposit

For monthly rent, you convert it first: (Monthly rent x 12) / 52 x 5

For example, if the monthly rent is £900:

• Annual rent = £10,800
• Weekly rent = £10,800 / 52 = £207.69
• Maximum deposit = £207.69 x 5 = £1,038.46

Taking more than this is a criminal offence under the Tenant Fees Act. STEMHQ calculates the cap automatically when you enter the rent amount.

The holding deposit cap

A holding deposit (taken while referencing is completed) is capped at 1 week's rent. This must be returned within 15 calendar days unless agreed otherwise, or put towards the tenancy deposit or first month's rent when the tenancy starts.

The 30-day protection rule

You must protect the deposit in one of three government-approved schemes within 30 days of receiving it:

• Deposit Protection Service (DPS)
• Tenancy Deposit Scheme (TDS)
• MyDeposits

There are two types of scheme:

• Custodial - the scheme holds the money until the end of the tenancy
• Insured - you hold the money and pay a protection premium

Late protection is a statutory bar. If you protect the deposit more than 30 days after receiving it, you cannot serve a valid Section 8 notice until you have paid the tenant a penalty of 1x to 3x the deposit amount - and even then, courts have discretion.

Prescribed Information: what it is and when it must be served

Prescribed Information is a set of documents that must be served on the tenant within 30 days of receiving the deposit. It includes:

1. A certificate of protection from the scheme (the scheme issues this)
2. The scheme's leaflet explaining tenant rights
3. Details of how to dispute deductions at the end of the tenancy

Failure to serve Prescribed Information is treated as serious as failing to protect the deposit. Both are statutory bars on Section 8 possession proceedings.

How to serve Prescribed Information:

• Email it to the tenant (keep a delivery record)
• Hand it to them personally (get a signature)
• Post it to the property address (use recorded delivery)

STEMHQ records the Prescribed Information service date and can flag non-compliance before you attempt to open the Form 3A wizard.

Changing deposit scheme during the tenancy

If you move from one scheme to another (for example, from TDS to DPS), you must re-serve the Prescribed Information within 30 days of the transfer. This applies even if the tenancy has not changed.

Deducting from the deposit at the end of the tenancy

You can only deduct from the deposit for:

• Unpaid rent
• Damage beyond fair wear and tear (documented in a check-in/check-out inventory)
• Cleaning costs where the property was left below the standard it was let in
• Costs to replace items the tenant has lost or damaged

You cannot deduct for:

• Fair wear and tear (gradual deterioration through normal use)
• Damage you caused yourself or that pre-dated the tenancy (must be documented in the check-in report)
• Costs not incurred within a reasonable time after the tenancy ended

Penalties for deposit non-compliance

• Failure to protect or serve Prescribed Information: The court must order you to pay the tenant 1x to 3x the deposit amount as a penalty. This is in addition to returning the deposit itself.
• Late protection: You cannot serve a valid Section 8 notice until the penalty has been paid.
• Exceeding the cap: Criminal offence under the Tenant Fees Act 2019.

STEMHQ's deposit tracking module records the protection date, scheme reference number, and Prescribed Information service date for every tenancy. The compliance checklist in the Form 3A wizard will warn you before you serve a notice if deposit compliance is incomplete.