UPDATE on signing of possession notices and deposit certificates!
31st January 2022
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31st January 2022
In our Legal Update from January 2020 (here), we reported on the High Court’s decision in Northwood Solihull Ltd -v- Fearn & Ors .
The question in that case was where the landlord of tenanted property is a corporation (as distinct from an individual), the Section 8 notice and/or the prescribed information certificate had to be signed in accordance with Section 44 Companies Act 2006. Earlier County Court decisions, which are persuasive but not binding, had decided that Section 44 would apply in these circumstances and thus the notice and prescribed information (in this instance signed by the landlord’s agent who was not an officer of the landlord company) were valid.
This first appeal had held that while signing a Section 8 Notice did not have to comply with the requirements of section 44 of the Companies Act 2006, the signing of the prescribed information certificate (relating to the deposit paid by the tenant) did. The result being that in order to comply with Section 44 the certificate needed to be signed either by:-
two directors; or
a director and company secretary; or
a director and a witness.
Accordingly, it would not be valid if it was signed by someone who was not an officer of the landlord company or only a sole director (other than before a witness who must also sign).
The decision in the High Court appealed was in fact appealed by both parties and thus has now come before the Court of Appeal (Northwood (Solihull) Ltd v Fearn & Ors (2022) EWCA Civ 40).
The common position was that notices signed by a person on behalf of the person who should give the notice were good notice, so long as the person giving the notice was authorised to do so on the other's behalf.
The prescribed information certificate relating to the tenancy deposits
On the prescribed information certificate, s.212(9) HA 2004 at the time provided:
(9) In this Chapter–
(a) references to a landlord or landlords in relation to any shorthold tenancy or tenancies include references to a person or persons acting on his or their behalf in relation to the tenancy or tenancies…”
The Court of Appeal found:
The certificate was given on 25 July 2014. The amendments made by the Deregulation Act 2015 were not then in force. The 2007 Order (as it then stood) required the certificate under paragraph (g) (vii) to be “signed by the landlord”. But section 11 of the Interpretation Act 1978 requires expressions used in subordinate legislation to be given the same meaning as in the primary legislation, unless the contrary intention appears. On 25 July 2014 there was no contrary intention. It follows that “landlord” in the 2007 Order had at that time the meaning given by section 212 (9) of the Housing Act 2004. It therefore included a person acting on behalf of the landlord in relation to the tenancy. Accordingly, interpreting article 2 (1)(g)(vii) of the 2007 Order in conformity with section 212 (9), the certificate was valid at the time it was given if signed by a person acting on behalf of the landlord in relation to the tenancy. Ms Brown was such a person. On the face of it, therefore, the certificate was valid at the time it was given. In addition, what the landlord is to certify is that certain information “is accurate to the best of his knowledge and belief”. In the case of a company, that knowledge and belief can only be that of a human being, whose knowledge and belief is attributable to the company under the rules of attribution.
The signature of a director of the landlord, clearly as a person authorised to sign on the company's behalf, was acceptable.
The above position was arguably changed by the Deregulation Act 2015 though, which retrospectively dis-applied s.212(9) of the Housing (Tenancy Deposits) (Prescribed Information) Order 2007. While that would potentially mean that a signature validated by s.212(9) on a notice prior to the Deregulation Act amendment could become invalid, this was not something that should be found unless obliged to.
Given that the amendment provided that
Article 2 (3) (a) allows references in paragraph (g) (vii) to “the landlord” to be read as including a person who acts on the landlord’s behalf. That extension applies where the initial requirements of an authorised scheme have been complied with in relation to the deposit by a person acting on the landlord's behalf. In the present case the certificate was given in the name of the landlord: Northwood Solihull Ltd. But it was signed by Ms Brown. Ms Brown is self-evidently not personally the landlord. The only rational conclusion is that she was a person acting on behalf of the landlord.
The notice remained valid and the landlord’s appeal was allowed!
The Section 8 Notice
The Court of Appeal decision states that
The primary legislation governing notice given under section 8 of the Housing Act 1988 does not require signature of anything. It merely requires “service” by the landlord of a notice in a particular form.
It follows, in my judgment, from Newbold that on the face of it a landlord complies with section 8 if an agent serves notice on his behalf, even if the agent signs the notice in the landlord’s name. In addition, the form prescribed by the relevant regulations explicitly allows notice to be given by and signed by an agent for the landlord.
This was an obvious error that did not affect the validity of the notice and the tenant's cross appeal was dismissed!
So Section 8 Notices, Section 21 Notices and prescribed information certificates do not need to be signed in accordance with Section 44 Companies Act 2006! This is very welcome news, as it makes things much easier in an administrative sense bearing in mind that possession notices are regularly issued by agents on behalf of landlords. It also removes a technical defence to Section 21 proceedings!
This legal update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole.
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