The specified schema name either does not exist or you do not have permission to use it

Error Message

When creating a new table in the geodatabase from SQL Server Management Studio, the following error may be encountered:

The specified schema name either does not exist or you do not have permission to use it.

Cause

This issue can occur if the schema is owned by another user. In the image shown below, the schema owner for the 'sde' schema is owned by 'dbo'. 

Solution or Workaround

From SQL Server Management Studio:

1. Take a full backup of the database.
2.  Navigate to the database Security folder > Schemas.
3. Right-click the schema name and go to Properties.
4. Change the Schema owner to be the same as the Schema name, as shown in the following image.