Categories: East Lothian

ELC Rent Deposit Guarantee Scheme

Lower income East Lothian residents often find it difficult to gain entry to the private rented sector because of the high upfront cash requirements. To address these concerns and make it easier for citizens to gain access to the housing that they need, East Lothian Council sponsors a rent guarantee scheme that can facilitate new tenancies.

Council’s emphasis on reducing homelessness is one of the driving forces of the scheme. It is actually one of the best ways to reduce homelessness because it does not require the use of temporary accommodation which can be quite costly.

What the scheme does is to replace the normal cash deposit with a certificate that guarantees repayment of damages that result from the tenancy. If the landlord is stuck with damages that were caused by the tenants they can still be reimbursed for those damages even if the tenant is unable to pay. They simply file for reimbursement through the Council and is up to Council staff to pursue repayment of those damages from the former tenant.

The guarantee covers approved receipts up to the amount listed in the bond agreement. The amount is typically capped at one months rent.

The resident is still responsible for repayment of any damages, but that amount may be repaid directly to the Council through affordable installments when necessary. The guarantee ensures that landlords are repaid without delay.

Not everyone will qualify for this scheme. It is intended to help those who would be unable to initiate a tenancy without the assistance. This is due to a lack of savings, though it is generally allowable to have up to £500 in savings on top of the first month’s rent payment.

Someone with a history of arrears may not qualify. Council is vouching for each tenant, and it is ultimately the taxpayers that could foot the bill whenever a resident fails to honour their agreement. The home itself should be priced within the Local Housing Allowance. This ensures that the recurring monthly costs will be affordable for the tenant even on their reduced income.

There are two options with the scheme.

  1. A bond certificate can take the place of the cash deposit. In this situation no money actually changes hands. It merely guarantees the payment of approved charges if the resident causes damages to the property.
  2. The landlord could approve the tenancy based on a guarantee that includes eventual placement of a deposit. This could be provided by the Council when the landlord requires a cash deposit. The client could agree to save for a rent deposit over the course of a few months. Those savings could eventually be used to place a cash deposit and release the Council from its bond.

There is no requirement that any landlord agree to accept the terms of the scheme. Many do agree in order to get their properties rented out faster.

Anyone who earns low income and has established local resident status may apply for inclusion in the scheme. They will need to supply all documentation and submit an application.

The Homelessness Team in Musselburgh will evaluate the merits of the case and can ultimately authorise participation by a resident. Residents may drop in at the offices on Ladywell Way, though a call on 01620 827536 is recommended to set an appointment.

The Team will visit any home not already approved for the scheme to inspect the property and to document the appliances and any other items that would be guaranteed through the scheme. The property must be managed by a registered landlord and can include housing associations. It may be also be physically located in Musselburgh, Haddington or any other region within the Council area.

The ELC rent deposit scheme is a service of East Lothian Council. It reduces vacancies and homelessness and helps residents get established in new tenancies.


Kenneth Long

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Kenneth Long

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