The FSA has published further details about the steps that they will be taking to regulate the "Sale and rent back" sector.
Sale and rent back involves individuals selling their home 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.
The interim regime will run from 1 July 2009 and will be fully operational from 30 June 2010.
Firms that are involved in this sector will need to operate in accordance with the existing Treating Customers Fairly regime - and be seen to be clear, fair and not misleading in their marketing and sales processes.
Under the interim regime firms will need to meet FSA threshold conditions including the requirement to be run by fit and proper people, to adhere to the Principles for Businesses and to meet some systems and controls and conduct of business rules.
Firms that are currently unauthorised and that intend to carry on any of the new sale and rent back regulated activities after 1st July 2009 will need to apply for interim permission. Existing FSA Authorised businesses will need to apply for interim variation of permission.
The FSA has published information to help firms prepare for interim authorisation:
Help for sale and rent back firms
Firms looking to obtain interim permission must submit their application by 1 August 2009.
The FSA will issue further guidance and a Consultative paper in September. This may pose a challange for some unregulated businesses as they are applying for permission to undertake sale and rent back activities prior to the full regime rules being announced.
