The Regulation of Financial Services Act 2005 is one of the most important pieces of regulation that sell and rent back providers will have to deal with. This is a law that works to help with getting all providers to be sure that they report their processes correctly. This is so all providers in the United Kingdom can be interpreted as legal ones that work with security and fairness in mind for customers. It also works in order to make all activities and processes that a provider can work with ones that are fair for everyone.
The RFSA 2005 was created as a law that works for the Financial Services Authority. It works to help with regulating the processes that are involved with a variety of different UK financial services. The sell and rent back processes that have become popular in the UK over the years are among the processes that are covered here and are going to need to be well protected in order for them to be used properly be people around the UK.
The RFSA 2005 officially defines a sell and rent back plan as a plan where a provider will work as a group that buys a property and the homeowner who will continue to live in that property as a renter will be identified as the seller of the sell and rent back agreement. This agreement will work with a proper payment schedule where the seller pays rent to the provider.
An important regulation factor here deals with how all sell and rent back firms should be business transactions only. No personal or political transactions in the sell and rent back industry are allowed. Only things that are used with the intention of allowing a person to avoid being foreclosed upon can be handled in a sell and rent back plan.
All standards that are used by providers should also be current. They should be ones that match FSA standards that were passed on 1 July 2009 as a means of extending the RFSA 2005 in order to recognise the use of these plans in the UK. Only providers that are going to be able to work with these standards will be allowed to legally handle sell and rent back agreements.
The next standard listed by the RFSA 2005 states that the sell and rent back agreements that can be used are ones that can only be handled for properties that are actually located in the UK. Illegal firms will be identified in particular as ones that try to offer sell and rent back plans for properties that are located outside of the UK.
The last and most vital part of this act involves working to help with promoting the fairness of a transaction. A sell and rent back agreement is required to be one that is clear in nature and will be easy for a seller to understand so that the seller will not be tricked into anything that person does not want to be in. The agreement should also be laid out to the seller to where both the benefits and risks that can come with an agreement can be listed so that the seller will be more educated on what can happen here.
The use of the Regulation of Financial Services Act 2005 is a valuable thing to see. This act is one that will work to help with definite sell and rent back processes while helping to see that processes are followed correctly so that sellers in these agreements can be protected when it comes to their plans.
Steven Martin is a FSA interim authorised provider of sell and rent back and also provides Quick property sale service. He works at http://www.quickpurchase.co.uk