SRA Update

Sale and rent back agreements: Be on your guard

SRA Update Issue 22 – December 2011

Recent changes made by the Government relating to sale and rent back (SRB) agreements have been designed to close loopholes and protect the public, but the Financial Services Authority (FSA) warns that consumers still need to be on their guard. We are highlighting the issue to solicitors about the potential risks of becoming involved in transactions of this nature.

Since 16 September, anyone who conducts SRB business—even a single transaction—must be authorised by the FSA, unless they are related to the customer. To read the legislation in full go to

In addition, the FSA has issued a warning to the public about rogue firms who think they can avoid regulation, by offering products that pay off consumers' debts, allow them to stay in their own homes, with the actual sale of the property delayed. These products are often called "Lease Options", or "Exchange with Delayed Completion" arrangements, but are in fact regulated sale and rent back agreements, even if the sale of a property is not fully completed. Firms offering them therefore need to be authorised by the FSA for SRB activities and are subject to regulatory requirements.

Read the FSA's warning in full

To contact the FSA, call 0845 606 1234.


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