RPS chief executive, Peter Beaumont, explained: “Our research has revealed that landlords have been using buy to let mortgages to acquire properties which they then manage under sale and rent back agreements without informing the lender.
“This potentially fraudulent activity may be putting lenders in a position where they are unknowingly committing a sanctionable offence, because they do not hold the appropriate FSA authorisation to administer SRB agreements. We believe there are thousands of buy to let mortgages affected in this way and it’s therefore a problem which lenders cannot afford to ignore.”
RPS is offering to buy from lenders either individual properties or portfolios of tenanted properties which may be subject to SRB agreements. RPS will work with lenders’ appointed LPA receivers (who also need to be authorised by the FSA to administer SRB agreements), to resolve this growing issue.
Beaumont concluded: “A recent landmark ruling in the Birmingham Crown Court has highlighted the serious consequences of SRB landlords changing tenancy agreements without informing lenders. The judge awarded a family the right to remain in their home for life and for the tenancy to pass to their children in the event of the tenant’s death. This is every lender’s nightmare and acts as a salutary reminder of the need for lenders to monitor the use of buy to let mortgages very carefully.”
