Deposit Disputes

Rental Deposits

A landlord who takes a tenancy deposit must protect it in one of three government-authorised schemes — the Deposit Protection Service, MyDeposits, or the Tenancy Deposit Scheme — within 30 days of receipt, and serve the tenant with the scheme's prescribed information in the same window. The deposit is capped at five weeks' rent (six weeks where annual rent is £50,000 or more), under the Tenant Fees Act 2019. These obligations under the Housing Act 2004 are unaffected by the Renters' Rights Act 2025, which converted tenancies to periodic agreements from 1 May 2026 but left deposit protection rules unchanged.

Where a landlord fails to protect the deposit or fails to serve the prescribed information within 30 days, the tenant can claim a penalty of between one and three times the deposit amount through the county court, in addition to recovering the deposit itself. The claim is evidenced by the tenancy agreement, proof of the deposit payment, the check-in and check-out inventories, and — where protection failed — the absence of any protection certificate from the three schemes, which a tenant can verify directly with each scheme.

Landlords typically respond by producing a protection certificate to show compliance, or by asserting deductions for damage, cleaning, or arrears — deductions that must be evidenced by the inventory and are usually tested through the scheme's own alternative dispute resolution service before reaching court. Outcomes for the deposit return itself typically track the deposit value, commonly £500–£2,000. Where the protection penalty applies, awards commonly range from the deposit value up to three times that amount.

Contractor Deposits

A deposit paid to a tradesperson or contractor is not covered by a statutory protection scheme — it is governed by ordinary contract law and, where the customer is a consumer, by the Consumer Rights Act 2015 requirement that services be carried out with reasonable care and skill and within a reasonable time. Where a trader takes a deposit and then fails to start the work, abandons it, or performs it so poorly that the contract is repudiated, the customer can claim the deposit back as a debt or as damages for breach of contract.

This claim is evidenced by the written quote or contract, proof of the deposit payment, correspondence chasing progress, and — where relevant — photographs or an independent assessment of any work that was carried out. Common defendant responses include asserting that work had already started or materials were ordered before the customer withdrew, that the contract terms make the deposit non-refundable, or that delay was caused by the customer. Outcomes typically track the deposit paid, most commonly £200–£3,000 for small trade jobs, though the claim can extend to any additional loss the customer can evidence, such as the cost of engaging a replacement contractor.