• If you do not 'protect' the deposit correctly or at all, you are liable to pay the tenant 3 times the deposit value.  All they have to do is inform the Court. (£1000 deposit = £3000 fine).
• Returning the deposit makes no difference to your liability to the Tenant.
• You will be unable to utilise the Section 21 if you have failed to protect a qualified deposit.
• If evicting for rent arrears, the Judge WILL take into account the fine when calculating rent arrears. 
• Any fines will also be used to establish legality of the Notices, so if you have £4000 arrears and have failed to protect the deposit, the Judge will reduce that arrear to £1000 and throw your claim out of Court.
• Always prepare an inventory to provide proof of Commencement condition, so that the proper representations can be made to your TDS.
• There is an alternative to taking a deposit, where the lnadlord charges an advanced rent instead, however, this needs to be correctly scheduled to show the rent due dates etc.  This has been discussed and suggested by Landlord bodies, but could be rejected by a difficult Judge.

click here for more info  or select a topic from the menu on the left