The specialist arm was launched to aid SARB firms, many of whom have never previously been regulated, deal with the often complex and time-consuming requirements of achieving and maintaining FSA authorisation. The launch comes amidst a recent flurry of activity in the sale and rent back market as a number of recent complaints regarding financial promotions activity have been upheld by The Advertising Standards Authority and The Office of Fair Trading.
The recent deadline of 1 August 2009 saw SARB landlords and companies having to submit a complete application for interim permission to continue their SARB business activities. Under the new rules, SARB has become a regulated activity and applicants had to demonstrate they meet minimum standards and are ‘fit and proper’ persons.
The regime will require that businesses continue to treat customers fairly, making clear important details, such as the length of time they can stay in the property, before they make their final decision on whether to sell. Another important requirement of the new rules is that a vendor must be given details of the market value as assessed by an independent and competent valuer i.e. RICS qualified.
Compliancy Services warns that all firms operating in the sale and rent back sector should expect to have to meet tough standards of business conduct in order to achieve full authorisation and a good quality compliance support package will go a long way to gaining and maintaining these standards.
Ben Mason, director at Compliancy Services, commented:
“The sale and rent back market provides an exciting opportunity for firms operating in or looking towards this sector but inevitably this will involve making some substantial changes to their current business practices for firms who are not fully up-to-speed on FSA requirements.
"The FSA is likely to insist on a much more transparent sales processes and full disclosure. There are not many detailed rules at present, but firms should not underestimate the FSA's determination to ensure customers are treated fairly.
“Firms that have been granted interim authorisation are subject to reduced rules and requirements during this period. However, they should now be working towards implementing the procedures, systems and controls that will be required of any other authorised firm.
"This will need to be in place by the time they submit their application for full authorisation next year. Whilst this may seem some time away it is greatly beneficial to ensure a firms house is firmly in order sooner rather than later.”
