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FSA launches interim scheme to protect sale and rent back customers
02/07/09
The Financial Services Authority (FSA) has launched an interim scheme designed to protect owners of residential property who enter into agreements with sale and rent back (SRB) companies, it has been announced. In a statement, the FSA said firms will have to apply for authorisation to operate in the SRB market by June 30th 2010, when the full regulatory system will be introduced. If they fail to do so, they will be excluded from the sector and could face prosecution.
Under the regime, SRB companies will also be subject to the FSA's rules on treating customers fairly and consumers will have access to grievance channels such as the Financial Services Ombudsman.
The FSA said households should be "aware of the risks" involved in SRB schemes. The regulator warned that typically, they will not receive their property's full market value and may not be able to remain as a tenant in the long-term.
The National Landlords Association welcomed the new scheme. The organisation's vice-chairman John Socha said: "Only when sale and rent back operators are within a more regulated environment can we be confident that consumers will be treated fairly."
