There are legal consequences of failing to protect a deposit according to the law. Tenants can check with the three Tenancy Deposit Schemes to see if their deposit has been protected.
There are three main consequences to failing to comply:
The tenant can make an application to the county court, which can either order the deposit to be repaid or paid into an authorised scheme (if the tenancy is ongoing). The court can order “statutory compensation” be paid of up to three times the deposit amount within 14 days, plus the deposit itself.
Landlords cannot serve a valid Section 21 notice to evict a tenant if the deposit is not protected, unless it has been returned to the tenant (with any agreed deductions).
If there are rent arrears, tenants can ask a court to offset their penalty award against the value owed.
If you have forgotten to protect the deposit, it’s best to do so as soon as you can, even though you will still be in breach of the 30-day legislated limit.