Sale and Rent Back (SARB)

Discuss any aspect of Property - Renting, Buying, Selling, Investing, Developing, Building

Sale and Rent Back (SARB)

Postby Nick » Fri Jan 31, 2014 12:25 pm

I had thought that SARB has been legislated out of existence by the FSC (later FCA), but a solicitor has stated that it is OK between 2 consenting adults. Are they right?
Image
Image
User avatar
Nick
Site Admin
 
Posts: 19411
Joined: Tue Apr 07, 2009 4:35 pm
Location: London

Re: Sale and Rent Back (SARB)

Postby Nick » Fri Jan 31, 2014 4:58 pm

The FCA have confirmed that individuals can do SARB, it's only limited companies who can't.
Image
Image
User avatar
Nick
Site Admin
 
Posts: 19411
Joined: Tue Apr 07, 2009 4:35 pm
Location: London

Re: Sale and Rent Back (SARB)

Postby LisaOrme » Sat Feb 01, 2014 9:44 pm

Not quite!

An individual may assist another person (think rich relative) but there absolutely must be no commercial desire or gain.

Its much like lenders accept non refundable non recourse gifts as deposits whereas they'd refuse if there were any sort of charge, repayment, loan.
User avatar
LisaOrme
 
Posts: 3863
Joined: Thu May 27, 2010 8:59 pm

Re: Sale and Rent Back (SARB)

Postby Nick » Sun Feb 02, 2014 8:03 am

That's not the impression Tessa Saunderson gives in her blog on which contracts to use. Poor girl probably didn't expect the blog to be contentious!
Image
Image
User avatar
Nick
Site Admin
 
Posts: 19411
Joined: Tue Apr 07, 2009 4:35 pm
Location: London

Re: Sale and Rent Back (SARB)

Postby LisaOrme » Sun Feb 02, 2014 12:45 pm

I've left the following post:-

To be clear:-

My comments apply to SARB post 2009 not before.

The opening post clearly refers to a sale and rent back situation; the talk of what type of tenancy it is is muddies the waters and is secondary to SARB issues.

SARB is not outlawed either commercially or between individuals.

However to operate commercially you must be regulated by the FCA.

There are currently NO companies that hold FCA regulation for SARB.

The FCA brought in interim regulation then full regulation and were very unhappy about the practices of the regulated firms so they shut it down completely. They have since reopened but no firm has applied again for regulation hence no firm currently regulated to do so.

A SARB between individuals is allowed BUT there must be absolutely NO commercial motive or gain for the buyer (rental profits, capital gain etc). Think rich relative helping out. To do so with commercial gain in mind or any such agreement as such would require FCA regulation. Not doing so is a criminal act.

Lending is a separate issue; no lender would knowingly agree to fund a SARB arrangement even a non commercial one so it would have to be a non commercial cash purchase - again think rich relative. To have obtained a mortgage on a SARB would be considered deception and a lender will take action to repossess should they discover this.

It is unlikely the FCA will give a clear yes/no on any regulated activity; they will simply state they produce the regulations and its up to individuals to interpret them.
User avatar
LisaOrme
 
Posts: 3863
Joined: Thu May 27, 2010 8:59 pm

Re: Sale and Rent Back (SARB)

Postby Nick » Sun Feb 02, 2014 7:00 pm

ROFL
Image
Image
User avatar
Nick
Site Admin
 
Posts: 19411
Joined: Tue Apr 07, 2009 4:35 pm
Location: London


Return to Property

Who is online

Users browsing this forum: No registered users and 1 guest

cron