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The 2004 Housing Act (amended by the 2011 Localism Act) introduced the requirement that all AST tenancy deposits be protected in a government approved scheme. 

The following only applies if you
  • live in a different property from your landlord,
  • your rent is less than £100,000 per year,
  • you have not been granted a non-shorthold assured tenancy
The first thing to do is confirm if any of the 4 schemes do hold your deposit, but the landlord has failed to advise you.
Deposit Protection Service My|Deposits
The Dispute Service
If you discover that your deposit is not protected, send this letter (keeping a copy and obtaining a free certificate of posting from the Post Office). It should be sent to the LANDLORD, not the agent, at the address specified for the service of documents on your tenancy agreement. This may be the agents address, but still address the letter to the landlord.
letter before action


RE: 123 High Street, Anytown, AT1 2AA

On the XXX of XXX 20XX I/We paid you a tenancy deposit of £XXX in respect of the above property.

The Housing Act 2004 (as amended by the 2011 Localism Act) introduced the concept of "Tenancy Deposit Protection" with regard to AST tenancies and obliges landlords to protect/register all tenancy deposits with one of 4 approved schemes.

I/We have verified with all four schemes that the deposit you hold was NOT protected by any scheme. This is unlawful.

You must provide proof of valid protection OR refund the outstanding balance of my/our deposit IN FULL within 14 days. If you fail to do so, I/we shall sue you for the balance due PLUS the statutory penalty for non-protection of deposits, (between one and three times the value of the deposit) plus my/our court fees and legal costs.

Yours sincerely

This letter applies to tenancies that end after 6th April 2012
Suing for the statutory penalty under section 214 of the 2004 Housing Act (as amended) is not allocated to the 'small claims track' and this means that it will cost over £1000 to get the claim to hearing http://tenancyanswers.ucoz.com/index/claiming_for_deposit_non_protection/0-60.  Whilst it is highly likely that those court costs would be awarded against your landlord, they have to be paid by the claimant (tenant) before any judgement is made.  When the 2004 Housing Act was implemented, a number of 'no-win-no-fee' firms promoted their services - it is likely that the 2011 Act will result in a resurgence of such offerings.
The above penalty also applies if the landlord protected the deposit but didn't provide certain paperwork (called 'prescribed information), however the penalty awarded is likely to be lower for this.

Alternatively, if you haven't been repaid within 14 days, you can commence a claim for the deposit only at http://www.moneyclaim.gov.uk. There are fees, but if you are on a low income, you may be able to reclaim them. HOWEVER, if you are entitled to have your court fees waived, moneyclaim will charge you and then expect you to claim it back. If you do it off-line and fill in a form N1 and an EX160 (both from http://hmctsformfinder.justice.gov.uk/HMCTS/FormFinder.do) and send them by mail, you won't have to pay any fees upfront.  If you do have to pay, presuming you win your case, the landlord will be ordered to refund any fees you have paid.

The small claims process is quite simple and doesn't require the services of a solicitor. However, you might find it useful to obtain a book on the process - a number are available from your local library or Amazon.

If the landlord doesn't pay, you may have to take enforcement action which could include freezing his bank account or having a charge put on the rental property.