Deposit Protected Only in Part? Here's What I'd Do

A reader sent me this exact situation last week: £650 of a £1000 deposit sitting in a protection scheme, and £350 nowhere to be found on the certificate. The agent said it was probably a paperwork error. It isn't.

I'm writing from an England and Wales perspective; the rules differ in Scotland and Northern Ireland.

What the law actually requires

In England and Wales, any deposit taken for an assured shorthold tenancy has had to be protected in a government-approved scheme since 6 April 2007. The Housing Act 2004 (sections 212–215) sets this out. The landlord or letting agent must protect the entire deposit within 30 days of receiving it. They also have to give the tenant prescribed information: the scheme's name and how to get your money back if there's a dispute.

The certificate from the scheme will show the exact amount held. That certificate is your starting point. If the amount on the certificate is lower than the amount you paid, the landlord has a problem.

If they protect only £650 of a £1000 deposit, they have not complied with section 213. The deposit is the whole £1000, not a portion of it. 'Partial protection' isn't a thing under the legislation. A court would likely treat this as an unprotected deposit, even though some money sits in a scheme.

Why a partial deposit is still a breach

The sanction for non-compliance sits in section 214. A tenant can apply to the county court for an order that the landlord either return the deposit or protect it properly, and pay compensation. Compensation is between one and three times the deposit amount. Courts have generally treated 'the deposit' as the full sum handed over, not just the missing £350. A judge might set the multiplier at the lower end because the landlord protected most of it, but the statutory range is based on the whole £1000.

I've seen landlords try to argue that the unprotected bit was just an admin slip. Courts don't accept that. The duty is strict. I'm not a lawyer, but the case law leans heavily in favour of tenants on this point. If you never received the prescribed information either, that's a separate breach with the same compensation range.

The 2019 cap doesn't fix this

The Tenant Fees Act 2019 capped deposits at five weeks' rent for most new tenancies (six weeks if the annual rent is £50,000 or more). This cap applies to tenancies starting on or after 1 June 2019. Older tenancies have different rules, and if your deposit was taken before that date, the cap doesn't apply, but the full protection duty does.

Some agents misunderstood that rule. The cap didn't allow them to protect part of a deposit and keep the rest unprotected. If the original £1000 exceeded five weeks' rent, the agent had to refund the excess at the start of the tenancy, then protect the remaining amount. Leaving £350 unprotected was never the correct move.

What I'd do next

Start with the deposit protection certificate. Check the amount shown. If it says £650 and your lease says £1000, that's your evidence.

Then send a letter before action to the landlord or agent. Keep it short and factual. Say the full deposit was £1000, only £650 was protected, and you are requesting the return of the unprotected £350 plus compensation under section 214. Give them 14 days to respond.

If they don't fix it, apply to the county court. You can do this yourself online for a small fee. You'll need the tenancy agreement, proof of payment, the certificate, and your letter before action. The court can order the landlord to pay compensation and may also order repayment of the unprotected amount.

Don't chase the scheme directly for the missing £350. The scheme can only deal with the money it actually holds. Your claim for the unprotected portion is against the landlord or agent.

In my experience, most agents fold at the letter before action stage. They know a partial protection claim is easy to prove. The ones that don't tend to pay the full penalty after a court order.

Send the letter. Keep it factual. The compensation provisions exist for exactly this situation.