RPS Chief Executive Peter Beaumont said: “It has become apparent from feedback we have received from intermediaries that they are only prepared to deal with truly ethical SRB firms. However, it is difficult for brokers to sort the wheat from the chaff, so we have drafted a Charter which we are suggesting all SRB firms should adhere to if they want to describe themselves as ‘ethical’.
“This is a market which has come of age and the truly professional operators need to be prepared to raise their game to a level which exceeds the proposed regulatory minimum. We believe that our Charter lays down a gold standard to which others can aspire.”
RPS’ Ethical Charter states that all homeowners must:
§ be informed, at the outset, what FSA permission the firm they are dealing with holds to undertake SRB business.
§ not be referred to any firm or funder which is not fully authorised to undertake SRB business i.e. an unauthorised ‘armchair’ investor.
§ have the option to take independent professional legal advice, at no cost to themselves, before being asked to sign on the dotted line.
§ be made aware of all the other options available to them, including benefits and government rescue schemes.
§ not be pressured into entering into an SRB agreement and be allowed to dictate the pace of completion, free from the pressure of short deadlines.
§ not have to pay up front fees and charges. All fees and charges must be fair and reasonable (i.e. justifiable in relation to the nature of the service being provided) and be clearly explained. Fees payable to brokers must also be disclosed and should be justifiable in relation to the service being provided by the broker.
§ be provided with information about the valuation of their property, which must be undertaken by a professional independent valuer.
§ be allowed to pull out of a ‘deal’ at any time before selling their property, at no cost to themselves.
§ have a legally binding tenancy agreement that can run for periods of up to 5 years.
§ have a legally binding option to buy back their property at any time during their tenancy agreement and be able to share in any increase in value. Any terms and conditions which apply to the buy back option must be clearly explained at the outset.
§ have the comfort of knowing that their landlord is financially secure and holds a minimum of £100,000 of capital and carries a minimum of £2 million of SRB specific professional indemnity insurance.
§ be given clear and fair information about the transaction in terms that are easily understandable by all customers.
§ have access to SRB experts to whom they can ask questions and request further information, at any time during the SRB transaction.
§ be looked after by staff who hold CEMAP, FPC or other appropriate qualifications.
§ feel confident that the SRB company is acting at all times with their best interest at heart, is not profiteering at their expense (i.e. imposing unjustifiable fees and charges) and is committed to upholding the highest possible standards.
RPS says it will publish the names of any firms which can prove they can adhere to the above terms and will endorse them as being ethical SRB operators.
Beaumont concluded: “We’re willing to play our part to help raise standards and encourage other SRB firms to sign-up to our ethical charter. It will cost them nothing, other than a commitment to provide their clients with the best possible service.”
