There have been some new developments with this pending interim Sale and Rent Back (SARB) regulation

The interim regime is due to commence on 1 July 2009 and firms will be required to submit applications for interim authorisation within one month of the starting date (i.e/ by 1 August 2009).

The FSA distinguish between what it calls ‘authorised persons’ and ‘unauthorised persons.’ Without going into detail which would send you to sleep, it is a reasonably safe assumption that if you are a ‘typical’ Landlord who has engaged in Sale and Rent Back previously then you will be an ‘unauthorised person’. Therefore, you will need to apply for the interim authorisation.

The FSA have now shed some light about the type of information that applicants will need to submit.

Criteria to apply

1. You must have conducted Sale and Rent back prior to 1 July 2009.

If you can satisfy this – proceed to 2 below?
If you cannot satisfy this – you cannot conduct SARB until you have been authorised under the full regulatory regime authorisation (rather than interim) which is expected in the second quarter of 2010.

2. You will need to complete the following FSA Forms:

Application Form : – this include details about the applicant, systems and controls, processes and documentation etc. Anyone with a 10% or more interest in the applicant must also provide full details. This information will be used by the FSA to conduct ‘fit and proper persons’ test.

3. Submission of various ownership, compliance, management, processing, and structural details.

The FSA have three months to assess the application. During this consideration period, the applicant will be deemed to have interim permission to continue carrying on SARB. If you decide not to make an application to the FSA then you must cease all SARB activity from the 1 July 2009.

Hot Tip: Be careful of claims of methods to circumvent the need for authorisation by use of Trust Deeds and various other devices as the regulation may still cover these scenarios.

Even Hotter tip: People leaving the market may create more opportunities for those remaining. We are offering assistance with guidance with submission of applications to the FSA. Contact: info@ms-law.co.uk

http://www.ms-law.co.uk.

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• FSA to regulate ’sale and rent back’ (telegraph.co.uk)

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Tagged as: FSA, MS-Law, Sale and Rent Back, SARB