In a previous post we discussed the case of Bali v Manaquel. However, this issue continues to raise its head in the county courts and appears to be a common defence for a number of tenants facing possession proceedings.
In Bali v Manaquel the tenant argued that the Prescribed Information served on him pursuant to the terms and conditions of the deposit scheme was defective for 2 reasons. We will only discuss the second reason in this post. A full summary of the case can be read here.
The second reason raised by the tenant was that the certificate provided was ‘signed’ with Manaquel’s name written in manuscript as Manaquel Co. Ltd, and signed PP with illegible initials. The tenant succeeded in his argument that this did not comply with the requirements of s.44 Companies Act 2006 which provides:
(2) A document is validly executed by a company if it is signed on behalf of the company– (a) by two authorised signatories, or
(b) by a director of the company in the presence of a witness who attests the signature
Having found that the prescribed information had not been signed in the correct manner the court held that the prescribed information had not been given in full making the section 21 notice served, invalid.
We continue to receive helpline calls from agents who have fallen foul of this issue with Croydon and Hastings County Court being mentioned quite often.
Since the case of Bali v Manaquel the Deregulation Act 2015 has made some changes to who can sign the Prescribed Information. Section 30 of the Act provides that it is acceptable for the initial agent who protected the deposit to provide their details and sign the prescribed information instead of the landlord.
However, the same issues are being raised regarding the signature of Prescribed Information as were raised in relation to Section 21 notices i.e. the application of the Companies Act. We would therefore suggest a similar approach to the one recommended there.
A landlord could in theory give a specific individual at the lettings agency company permission to act as their agent for a limited purpose. This purpose would of course be the signing of the prescribed information. That individual would then sign the prescribed information in their personal capacity as the landlord’s agent satisfying the Bali v Manaquel ‘defence.’ The agency for the rest of the tenancy would then revert to the letting’s agency company operating in the normal way. This relies on the fact that a landlord can appoint any individual or company as their agent for any purpose whatsoever without preventing them appointing a totally different individual or company as their agent for other purposes. This method has not been tested by the courts so caution should be exercised.
However, where the agent is not an individual the advice is that they along with company landlords ensure that when they sign the prescribed information, they do so in compliance with the Companies Act 2006. Technical points such as these are important and companies are advised to check the requirements to ensure compliance. At court having to defend cases on grounds such as these takes time and costs money. Therefore until the matter is brought before a senior court who can make a binding decision the advice is to comply with the Companies Act and save not only on costs but also time.