Property litigation weekly update - 14 January 2021
Happy New Year from the Trowers' property litigation team. Our bulletin returns with details of the latest changes to residential evictions, a reminder for developers to comply with their CIL obligations and a recent case on formalities for corporate entities who are a party to a residential tenancy agreement. All this along with insight from our colleagues around the firm and some uplifting positive news.
Extension of delay on residential evictions
The Public Health (Coronavirus) (Protection from Eviction) (England) Regulations 2021 (SI 2021/15) were laid before Parliament on 8 January 2021 and came into force on 11 January 2021. In essence, the Regulations extend the restrictions on residential evictions in England until 21 February 2021.
The Regulations prevent attendance at a dwelling house in England for the purposes of executing a writ or warrant of possession, or delivering a notice of eviction (save for a few exceptions) until 21 February 2021. Evictions can still be carried out where the court is satisfied that the notice, writ or warrant relates to an order for possession made:
- Against trespasses i.e. person unknown.
- Wholly or partly on the grounds of:
• anti-social behaviour;
• the mandatory ground for possession;
• a tenant knowingly or recklessly making a false statement which caused the tenancy to be granted;
• domestic violence;
• the death of an assured tenant (but the person attending has taken reasonable steps to satisfy themselves that the property is unoccupied).
- Wholly or partly on a ground involving rent arrears, where the amount unpaid is equivalent to at least six months rent.
There is therefore now a reduction from the previous requirement of nine months outstanding rent arrears. Furthermore, there is also now no requirement that this must be the amount outstanding at the date a possession order is made, or that arrears accrued after 23 March 2020 must be discounted.
The explanatory memorandum which accompanies the Regulations states that the Government has widened the rent arrears exemption in order to balance the impact of the extension on landlords, whilst continuing to protect tenants from eviction.
The amendment to the substantial rent arrears exemptions means that a greater number of landlords will be entitled to take enforcement action before 21 February 2021. However, it remains to be seen, under the current climate, whether or not the general ban on evictions is extended beyond this date.
Northwood Solihull Ltd v Fearn & Ors (2020) EWHC 3538 (QB) - signature requirements for corporate landlords of residential tenancies
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.
Insight from around the firm
- Leasehold reform update – the news leaseholders have been waiting to hear
- Travel team update - LoveHolidays to refund customers following CMA intervention
- Webinar – Trowers' Tuesdays – why is 2021 the year of employee culture?
Good News Stories
- Hero plumber James Anderson has spent over £57,000 during the pandemic by helping thousands of vulnerable families fix their heating and plumbing for free. Working in North West England and part of Scotland, James soon hopes he we will be able to help families all across the UK.
- In Cornwall, the UK's first-ever geothermal power plant has just opened on a 10 year deal to supply electricity to 10,000 local homes. In a bid to reduce our carbon footprint, the plant uses the heat generated by the Earth to power homes.
- Grandparents have been able to hug their grandchildren after 9 months by sharing a loving embrace with polar bear costumes! Wearing the 6 foot protective costumes, Barbara and Clive Walshaw were able to hug their loved ones for the first time since the pandemic began.