Very Quick House Sale

WHAT IS SELL AND RENT BACK?

This is the process of selling your house and renting it back from the company that has bought it. Typically a company will buy your home 65% to 75% of market value. In most cases the firm will pay all legal costs, valuation fees, and rent the property back at market rent values. Some companies offer the options of buying the back at market value at a later date.

COMPANIES THAT OPERATE SELL AND RENT BACK

Sell and Rent back (SRB) companies are presently interim regulated by the FSA. There are only 82 companies in the UK. These companies have been heavily vetted and offer variations on what they can offer these are:

• Entering into a regulated SRB agreement
• Administering a regulated SRB agreement
• Advising on a regulated SRB agreement
• Arranging (bringing about) a regulated SRB agreement
• Making arrangements with a view to a regulated SRB agreement

Companies that operate sell and rent back must comply with a number of conditions to protect the seller.

• Firms which offer advice, will be required to have professional indemnity insurance.
• All SRB sales must be assessed for affordability and appropriateness, whether advised or not.
• Firms must ensure the seller (customer) has checked if the SRB will affect their ongoing entitlement to benefits.
• A 14-day cooling off period is given to allow customers time to make a decision.
• Pre-offer and offer stage disclosure requirements must both be connected to the cooling off period.
• The SRB firm must ensure that the property valuer owes a duty of care to the seller.
• Firms offering incentives such as a delayed payment to the SRB seller will need to provide protection for this payment and must keep in touch with the seller about how they receive the incentive.
• Additional disclosure requirements will apply to both SRB Intermediaries (Advisers) and SRB Providers.
• The FSA have banned exploitative advertising and high-pressure sales techniques; banned cold calling and leaflet drops through letter boxes; and prohibited the use of emotive terms like ‘fast sale’, ‘mortgage rescue’ and ‘cash quickly’ in promotional literature.
• Put in place measures to ensure all risks are clearly signposted to the customer, via FSA literature and during the sales process.
• In order to ensure security of tenure:
• The tenancy agreement must be for a fixed term of no less than five years; and
• Where the provider mortgages the property, the mortgage lender must agree to the letting and terms of the tenancy.

And Finally

All firms who are active in the Sale and Rent Back market have to obtain authorisation to trade. The FSA have announced that they are proactively monitoring the SRB market for unauthorised activity and those found trading without authorisation will face potential fines or imprisonment.

To find out more information and processes go to Sell and Rent Back.

Baggy Tiwana

http://www.thepropertybuyers.co.uk

Article Source: http://EzineArticles.com/?expert=Baggy_Tiwana