A recent, important landlord & tenant case has addressed technical issues about the correct way for a corporate landlord or their corporate managing agents to sign and execute notices served pursuant to section 8 Housing Act 1988 (terminating a tenancy), as well as the signatures required for the prescribed deposit information.
Section 44 of the Companies Act 2006 states that a limited company may execute a document either by affixing its seal, by a director of the company signing it in the presence of a witness or by the signature of both a director and a company secretary.
In the case of Northwood Solihull Ltd v Fearn & Cook which was heard on 21st December 2020, the landlord was a corporate entity. The tenant sought to challenge the validity of the section 8 notice served on them because it had not been executed in the above manner; and argued that the prescribed deposit certification had also not been properly signed.
The two issues in question were;
- Whether the section 8 notice was correctly executed as it had been signed by a property manager used by the corporate landlord.
- Whether the deposit prescribed information was correct as it had been signed by just one director of the landlord company without a witness.
The Court of Appeal ultimately confirmed that the section 8 notice was valid, but that the prescribed information certificate had not been correctly signed.
In respect of the section 8 notice, the court concluded that the statutory provisions for such notices allows them to be signed by either a landlord or an agent. It had indeed been signed by an agent, and the notice was therefore correct and valid.
In contrast, the prescribed information was (at that point in time) required to be signed by the actual landlord. This rule changed on 26 March 2015 and since that date, it has been possible for a landlord’s agent to sign the deposit prescribed information. The issue regarding the validity of the deposit prescribed information in this case therefore is only relevant to prescribed information given before that date.
As the deposit prescribed information had not been served correctly within 30 days of receipt of the deposit (as required under the provisions of the Housing Act 2004) the court awarded the tenant compensation for the failure of the landlord to properly deal with the prescribed deposit information.
Those in the property management business will need to be aware of this case, as many lettings agencies are corporate entities themselves.
- Corporate landlords and their agents should therefore check their key documentation dated before 26 March 2015 have been properly executed. If the documents have not been executed correctly, consideration should be given to reissuing the prescribed information as a failure to do so would render any notice served pursuant to Section 21 Housing Act 1988 invalid and may give rise to a claim by a tenant for failing to comply with the provisions of the Housing Act 2004.
- Should corporate landlords and letting agents execute documents in accordance with the provisions of the Companies Act? The barrister who represented the landlord in the above case has said that this issue was not specifically addressed in the judgement, but they are of the view that the execution requirements under the Companies Act only apply to documents that the landlord alone is required to sign. However, to ensure that they do not fall foul of any subsequent case law in this area, it is suggested that agencies may wish to ensure their contracts list a named individual as the agent rather than the company itself.
Corporate landlords and their agents therefore need to be meticulous in their approach to notices and other important documentation in respect of their tenancies, to avoid potential pitfalls further down the line.
If you require advice and assistance on this or any other landlord and tenant issues then please contact Fiona Hannaford or call on 01803 403403.
The content of this article is correct as at the date of posting and is for information purposes only. Whilst we try and ensure it is accurate we do not warrant or guarantee that this is the case, nor do we accept any responsibility in the event that it is relied on. The information is not intended to be a substitute for legal advice which you are recommended to obtain.Back to News