Sale and Rent Back
Regulatory Compliance for Sale and Rent Back Schemes
June 2009
On 3 June, FSA published the details of the regulation regime that it aims to introduce on 1 July to tackle immediate problems for customers in the sale and rent back (SRB) market.
Sale and rent back schemes involve individuals selling their home, usually at a discount, and
obtaining an agreement to remain in the property for a set period - typically through an assured shorthold tenancy of six to 12 months.
This follows HM Treasury's announcement the previous day that it is extending the scope of FSA regulation to include SRB, as it considers Regulatory Compliance to be the mostappropriate way of ensuring consumer protection in this market.
The FSA is taking a two stage approach to regulating the Sale and Rent Back market. An interim regime will be brought in as soon as any statutory changes come into force (expected on 1 July) in order to address the most immediate problems for consumers, followed by a more comprehensive
Regulatory Compliance regime which will start on 30 June 2010.
Under the interim regime firms will need to meet FSA threshold conditions including the requirement to have adequate resources and to be run by fit and proper people.
Firms will also have to comply with the Principles for Businesses and meet a number of systems and controls and conduct of business rules.
Firms currently authorised for other activities will need to apply for interim variation of permission. Firms are encouraged to start preparing now for Regulatory Compliance authorisation and to apply as soon as the interim regime starts. The following link provides you access to the appropriate section of the FSA website:
The Key dates
1 July 2009: interim regulation expected to begin and firms can start to submit applications
for interim permission or interim variation of permission;
1 August 2009: the closing date for interim permission applications;
September 2009: expected publication of Consultation Paper on full regime for sale and
rent back; and 30 June 2010: regulation under the full regime
will begin.
Submitted by {Source: FSA} on Tuesday 7th July 2009