Maximum Tenancy Deposit Scotland: The Two Months' Rent Cap

The maximum tenancy deposit a landlord can legally collect in Scotland is two months' rent. This cap is set by Section 90(3) of the Rent (Scotland) Act 1984, and it applies to every Private Residential Tenancy regardless of the property's value, condition, or number of tenants. Exceeding it — even by a small amount — is an illegal premium.

How to Calculate the Cap

For monthly rent, the calculation is straightforward: multiply the monthly rent by two.

If rent is £850 per month, the maximum deposit is £1,700.

For weekly rent, you need to derive the monthly equivalent first. Multiply the weekly rent by 52 (weeks in a year), then divide by 12 (months):

Monthly equivalent = (Weekly rent × 52) ÷ 12

So if weekly rent is £200, the monthly equivalent is £866.67, and the maximum deposit is £1,733.33.

For four-weekly rent cycles, multiply the four-weekly figure by 13 and divide by 12 to get the monthly equivalent, then double it.

The calculation is based on the contract rent under the tenancy agreement.

What Counts Toward the Cap

The two-month figure is the total refundable security deposit. Everything collected as a deposit — regardless of what you call it — counts toward this single cap:

• A standard security deposit: counts
• An additional "pet deposit": counts toward the same cap
• A "damage deposit" or "key deposit": counts
• Any refundable sum described as being held against potential damage, unpaid rent, or cleaning: counts

You cannot collect a £1,700 security deposit plus a separate £300 "pet deposit" on a property with £850/month rent. The total would be £2,000, which exceeds the two-month cap of £1,700 by £300. That £300 is an illegal premium.

What Does Not Count as a Deposit

Advance rent — the first month's rent paid before the tenancy starts — is not a deposit. It is a rent payment. It does not count toward the cap, and it does not need to be lodged with a deposit scheme.

However, any advance payment described as a deposit, held as security, or stated to be refundable at the end of the tenancy is a deposit regardless of what the landlord calls it. The substance of the payment determines its legal character, not its label.

Holding Deposits and Admin Fees

Section 82 of the Rent (Scotland) Act 1984 goes further than capping the deposit. It prohibits landlords from demanding or accepting any premium, key money, administration fee, or non-refundable holding fee as a condition of granting, renewing, or continuing a tenancy.

This means:

• No non-refundable holding fees to take a property off the market
• No credit-check charges passed to the applicant
• No administration fees for processing the tenancy agreement
• No separate key deposit above the cap; any refundable key deposit held as security counts toward the same two-month cap

A landlord may accept a refundable advance payment before the tenancy starts, but only if it is explicitly designated as either a pre-payment of rent or an advance on the security deposit. If designated as deposit money, it must be credited against the total deposit and lodged with an approved scheme within 30 working days of the tenancy start date.

What Happens If You Exceed the Cap

Any amount collected above the two-month cap constitutes an unlawful premium under Section 82 of the 1984 Act.

In addition, exceeding the cap can factor into a tribunal's assessment if the tenant applies for a penalty under the Tenancy Deposit Schemes (Scotland) Regulations 2011. An overly large deposit that wasn't fully lodged with an approved scheme creates two compliance failures: the illegal premium and the unprotected deposit.

When the Rent Increases

If you lawfully increase the rent during the tenancy (using the statutory Rent Increase Notice process under the Private Housing (Tenancies) (Scotland) Act 2016), the deposit cap recalculates based on the new rent. If rent rises from £850 to £900, the new cap is £1,800.

You may request a top-up from the tenant to bring the deposit up to the new cap. Any additional deposit money received must be lodged with the existing scheme within 30 working days of receipt, and you must issue an updated Regulation 42 prescribed information notice reflecting the new total.

You cannot request a top-up more frequently than once per 12-month period, because that is how often rent may be increased under a PRT.

For a full walkthrough of deposit calculations, lodging deadlines, and compliance checklists, the Tenancy Deposits in Scotland guide covers every step in one place.

See more Scotland guides →