Why Has the Financial Services Authority (FSA) Regulated the Sale and Rent Back Sector?

Sell and rent back has been in existence for many years. In the past, there have been a number of cases where companies or individuals have entered into a sale and rent back agreements, promising the owner the opportunity to remain in their property for as long as they wish.

However, the reality in a number of cases is that after a period of six months, the owners have been served notice, evicted from the property, and left homeless by unscrupulous landlords and the property sold at a large profit. In addition to this, there have also been cases where mortgage companies have repossessed the homes of these individuals as the landlords have been unable or unwilling to make mortgage payments on the homes in question.

In response to this, the FSA has taken the step to provide security to those wishing to sell their home whilst remaining in the property for the long term. The FSA have asked all companies and individuals that operate in the sector to apply for 'interim authorisation.' From the 1st of July 2009, all companies wishing to continue working in the sale and rent back sector had to apply for this authorisation by the 31st July 2009. Any company not submitting an application by this date is NOT permitted to conduct business in this sector from 1st August 2009.

As part of the application process, the FSA has requested information from each applicant relating to the whole of their business operations. This will allow the FSA to look at each individual and company within the sector, and decide whether or not to grant them interim authorisation. The FSA will pay particular attention to the financial workings of the sale and rent back provider to ensure they are in a position to meet any commitments in the long term. It will also look at the processes implemented by the provider to ensure that they deal with homeowners in an open, honest way, and ensure that the consumer is able to make a decision as to whether or not they wish to enter into a sale and rent back agreement.

The FSA has set a benchmark in the financial services sector to ensure that all consumers are treated fairly (Treating Customers Fairly)

The 6 Outcomes are detailed below

Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.

Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.

Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.

Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.

Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

If you are thinking about selling your home and renting it back, your first step should be to ensure that you are dealing with a company that has gained interim authorisation. This will provide you with a level of security, and the knowledge that you will be dealt with in line with the FSA's guidelines.

As a forward-thinking company, Quick Purchase Limited were one of the first companies to gain interim authorisation from the FSA. This means that if you consider selling and renting back your home through Quick Purchase Limited you will know that you are dealing with a professional company within the Sale and Rent Back sector.