The High Court recently considered this appeal on the signature requirements for Notices and prescribed tenancy deposit information certificates (deposit certificates), where these are served by or on behalf of corporate landlords in residential possession proceedings.
Previous first instance decisions on this point have conflicted, so many landlords and managing agents would welcome some clarity. This appeal provides some, at least in relation to section 8 Notices Seeking Possession.
The landlord had served a section 8 Notice Seeking Possession on its tenants, which had been signed by the landlord's property manager. The tenants argued that the notice did not comply with the section 44 Companies Act 2006 signature requirements and was therefore invalid. The Companies Act requires two authorised signatories or a director to sign in the presence of a witness, whenever a company executes a document by signing.
The Court upheld the first instance decision that the section 44 signature requirements did not apply in the case of the section 8 Notice. The section 8 Notice was held to be valid. There was no statutory requirement for a section 8 Notice to be signed by the landlord and it could be validly signed, on behalf of the landlord, by an authorised agent. This strongly suggested that formal execution was not necessary.
However, the tenants also challenged the signature on the deposit certificate. This certificate was only signed by one director of the landlord company and so not in accordance with section 44. The Court again upheld the first instance decision that the deposit certificate did have to be signed in accordance with section 44 and therefore found that the certificate, with only one signature, was not valid. This gave rise to a penalty claim.
Unfortunately, this appeal was decided by reference to the wrong version of the Prescribed Information Order. In 2014, when the certificate was served, the relevant statute required that such certificates be signed "by the landlord". Subsequent amendments to the Prescribed Information Order by the Deregulation Act 2015 now permit signature by the landlord or "the initial agent" (much like the signing of a Section 8 Notice). Those amendments are treated as having had effect since 6th April 2007, and had the High Court considered the amended version of the Order, it may have reached a different conclusion. Alternatively, it may have held that the section 44 requirements apply whether the deposit certificate is served by landlord or agent. It will take a further appeal to clarify this point.
This case will have wide implications for corporate landlords. We have clarity that section 8 Notices need not be signed in accordance with the Companies Act.
In the case of deposit certificates however, there is less clarity for now. We would advise any landlord or agent signing a deposit certificate to comply with the section 44 requirements. Failure to serve a valid deposit certificate is a breach of the Housing Act 2004 and attracts a penalty. Furthermore, it would also invalidate a section 21 notice, if the faulty signature is not rectified prior to the service of that notice.
