Letting agents managing nearly 70% of England’s protected tenancy deposits may face compliance issues following changes introduced under the Renters’ Rights Act, according to analysis by a property accounting specialist.
The Letting Partnership estimates that agents handled 2.98 million protected deposits in 2025, representing 69.5% of all deposits protected during the year. Changes that came into effect on 1st May now prevent agents from collecting rent before a tenancy agreement has been signed by all parties, though deposits can still be taken in advance.
Registration deadline concerns
The firm warns that this shift in timing could create problems for agencies where deposit registration processes remain linked to tenancy start dates rather than the date funds are received. Under existing regulations, deposits must be registered within 30 days of receipt, but some agency software systems may not have been updated to reflect the new sequence of events.
Chris Mason, Chief Operating Officer of The Letting Partnership, said: “Where agencies are now taking deposits before tenancy agreements are signed, there is a risk that deposit registration deadlines are being triggered earlier than some systems or workflows are designed for. If those triggers are linked to tenancy start dates rather than receipt of funds, agents could find themselves breaching registration requirements without immediately realising it.”
Operational adjustments required
The compliance risk is likely to increase in cases where significant delays occur between deposit receipt, agreement signing and tenant move-in under the new process. The company is advising agents to review their software workflows and accounting controls to ensure deposit registration deadlines are correctly linked to when funds are received.
The changes form part of broader reforms under the Renters’ Rights Act, which has introduced several operational changes for letting agents and landlords. The sector has also faced increased scrutiny around licensing requirements, with some agents challenging council licensing schemes in recent months.
With agents handling the majority of protected deposits in England, any widespread compliance failures could result in significant financial penalties and potential compensation claims from tenants. The 30-day registration requirement carries penalties of up to three times the deposit amount if breached.
