There is now clarity in the requirements when corporate landlords and agents are signing notices and prescribed information. The judgment in the second appeal of Northwood (Solihull) Ltd v Fearn & Ors (2022) EWCA Civ 40 has been handed down by Lord Justice Lewison in the Court of Appeal with the decision unanimously in favour of the landlord.
Facts of the Case
The case originated as a simple possession claim. The landlord served a section 8 notice and issued possession proceedings.
The tenant initially raised a defence on the basis of defective prescribed information. Northwood Solihull is a limited company. It operated the tenancy under a guaranteed rent agreement where it rented the property and rented it on to its own tenants.
The original prescribed information was signed by a director but without identifying herself as such and not following section 44 Companies Act 2006. The Section 8 was also not signed in accordance with Companies Act but by an employee of the landlord who was acting as the property manager.
Tenant’s Case
The tenants argued that where the landlord or agent is a company all documents should be required to be executed in accordance with Section 44 Companies Act 2006. This being signed by a Director and a Witness, by 2 Directors or by affixing the company’s common seal to the document.
Consequently the notice served by the landlord and prescribed information would not have been valid.
Landlord’s Case
The landlord put forward that the law of agency is clear and well understood. Just as an agent can sign for a landlord, an employee of a company is its agent and can sign on its behalf.
There is nothing about a notice or deposit prescribed information which requires special signatures, in fact both are clearly permitted to be signed by an agent on behalf of the landlord. The S8 notice itself does not determine a tenancy. It tells the tenant that the landlord is seeking possession of the property because of a breach. The Landlord is still required to obtain a possession order.
In any event the necessary information was provided to the tenant in the notice and prescribed information. The notices were substantially to the same effect as required by law. For these purposes, they were compliant with the relevant legislation and fulfilled their existence.
Outcome
The Judgement is clear and unambiguous. An employee or agent acting on behalf of the landlord can sign notices and the prescribed information on their behalf provided the individual is authorised to do so, this authorisation can be express or arguably implied by law.
PainSmith do note that ensuring the individual signing the notice is authorised to do so remains a key point. We would therefore recommend that both corporate landlords and lettings agencies have a clear structure dictating who is authorised to sign documents on behalf of the landlord. Not all employees will have authority. The office cleaner would clearly not. However a person with the correct role and job description, for example a property manager will be able to sign notices and prescribed information as an individual.
The documents can still be signed in accordance with the Companies Act, however it is not a requirement.
For sole landlords and agents the position remains unchanged, notices can continue to be personally signed.
This applies to section 21 notices, section 8 notices and the prescribed information.
The Judge made clear that a tenant is not to be protected by legal trickery. If a defence to a claim can only be made on an excessively technical point it is at its very nature flawed. The Judge went on to confirm that notices with technical errors would not be automatically invalid, as long as the notice is substantially to the same effect as the requirements and gives the tenant all of the required information, it will likely be valid.
Published 1 February 2022
