In the recent case of Northwood Solihull v Fearn & Ors the occupiers argued that a Section 8notice of possession and a prescribed information certificate confirming adherence with tenancy deposit regulations were not valid as they had not been signed by the landlord (a limited liability company) in accordance with the Companies Act 2006.
The Section 8 notice had been signed by the property manager, while the Prescribed Information Certificate had been signed by one company director without a witness.
It should be noted that the Companies Act requires documents that are executed on behalf of the company to be signed in accordance with three prescribed manners.
Through appeals, the case made its way from the County Court to the High Court, which held that the Section 8 notice was valid because the director that signed it could fairly claim to be signing as the agent on behalf of the landlord, not the company, therefore the Companies Act did not apply.
However, it decided that the Companies Act did apply to the prescribed information certificate, meaning the single signature could not suffice, and the occupiers were awarded a financial penalty against the landlord of up to three times the amount of their deposit. The case is now being decided by the Court of Appeal, where the landlord has appealed against the financial penalty and the occupiers against the Section 8 notice.
The High Court seems to have made a mistake in relation to tenancy deposits. The judge argued that the prescribed information certificate was issued at the time when the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 was in force, which required prescribed information to be signed in accordance with the Companies Act.
However, this Order was subsequently amended by the Deregulation Act 2015, which allows for prescribed information to be signed by agents on behalf of landlords. As the Act is backdated to apply from 6 April 2007, the company director’s signature could be argued to be legally admissible.
What this could mean for landlords
Though the judgement is still ongoing, this case suggests that agents or landlords operating as a corporate entity must sign prescribed information in accordance with the Companies Act. Those who do not risk a legal penalty of up to three times the deposit amount. If the decision is upheld by the Court of Appeal, this could throw the legality of many prescribed information certificates into doubt if they have not been signed in accordance with the Companies Act.
What are the requirements for signing prescribed information?
Prescribed information requires a signature to certify that the information provided is true. This must be signed by the landlord or on the landlord’s behalf by the agent. If the landlord is a company, this signing must at least for the moment be in accordance with the Companies Act 2006. This requires documents that are executed on behalf of the company to be signed by either:
two directors, or
a director and a company secretary, or
a director before a witness
The occupier must be given the opportunity to sign but is not obliged to do so.
If you are a Landlord and are concerned that your tenancy agreement and prescribed information may not have been signed correctly, please get in touch on 01722 580059 or email email@example.com for advice. We’d love to help make sure you don’t fall foul of the law!
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