What Happens if Landlord Doesn't Protect Deposit?
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If you don't protect a deposit, you cannot use Section 21 to evict the tenant. The tenant can claim compensation of 1-3 times the deposit amount through the courts. You must also return the deposit in full at the end of the tenancy.
What happens if I don't protect the deposit?
Three main consequences: you lose the ability to serve Section 21, the tenant can sue for compensation, and you must return the full deposit regardless of any damage.
Can I still evict without protected deposit?
Not with Section 21. You'd need to use Section 8, which requires specific grounds like rent arrears or breach of tenancy. And you still face the compensation claim risk.
How much can the tenant claim?
Between 1 and 3 times the deposit amount. The court decides the multiplier based on how serious the breach was and your reasons for not protecting.
Can I protect it late?
You can, but it doesn't fix the historic breach. The tenant can still claim compensation for the period it was unprotected. And Section 21 issues depend on complex case law—get legal advice.
What if the tenancy has already ended?
The tenant can still bring a claim. The limitation period for deposit claims is 6 years from when the cause of action arose.
Managing this yourself?
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LandlordOS tip
If you've inherited a tenancy with an unprotected deposit, get legal advice immediately. The rules are complex and depend on when the tenancy started and when you became the landlord.