Scottish Borders Deposit Guarantee Scheme covers damages

Covering the rent deposit got a little easier beginning in 2007 for established residents of Scottish Borders. The Deposit Guarantee Scheme is the best way for lower income households to gain access to private housing.

Deposit Guarantee Scheme is a promise to landlords who will agree to relax the cash rent deposit requirement. When paying a deposit and advance rent creates a financial hardship or is otherwise impossible, this scheme can facilitate the move into a permanently affordable flat.

Limitations

One primary limitation of the scheme is the absence of arrears from the list of covered charges. Unlike some programmes where arrears of up to one month can be charged to the bond, Council has chosen to omit this from the plan. Landlords must understand that they would still have to pursue repayment of arrears from the tenant since Council cannot cover this amount.

Damages to the actual property as outlined in the tenancy agreement are covered. Any inventory items such as appliances could be included, though communal area damages would be excluded. Criminal acts would also be excluded.

Bonus coverage

The popularity of the scheme is partly due to the fact that the guarantee actually covers a maximum of two months of rent instead of the single month promise of other aid programmes. This actually increases the appeal to landlords since it allows for reimbursement of twice the damage amount that most schemes cover.

Built in savings component

Approved tenants will make small payments toward the scheme throughout their tenancy. Payments can be made according to a weekly or monthly plan. This money is held in trust on behalf of the tenant.

The great aspect of this arrangement is that it provides a secondary savings mechanism. When someone concludes the tenancy and wants to rent somewhere else, they may utilise the saved funds to put down as rent deposit on the new home. It makes sure they never need to use the scheme again.

How to apply

An interview is required to receive coverage by the bond. Council’s Homelessness Services is examining actual financial need. Documentation of all sources of income is necessary to establish eligibility. Eligibility for housing benefits may be required to be considered for the service.

An applicant does not necessarily have to be homeless to qualify. Someone who demonstrates that they are at risk of an eviction could also be considered.

The bond is not provided for those who have the savings necessary to pay rent deposit. It is intended for potential tenants who have been unable to save the money on their own.

Approved applicants must locate a suitable private home for let and arrange for an inspection. Council will sign an agreement with an approving landlord. Some clients will find that they need to discuss this need upfront with a landlord to gain approval for a bond guarantee in lieu of a cash deposit.

Enquiries may be made by calling Council’s Homelessness Services at 0800 376 1138 (freephone) or 01896 661 385. Appointments are available at Council’s office on Paton Street in Galashiels.