Corporate Body Landlord Notices… who signs?
Posted Wednesday 23 December 2020 - 13:14pm by Trust Audit
S.44 Companies Act 2006 sets out that a limited company may execute a document either by affixing its common seal to that document, or else by a director of the company signing the document in the presence of a witness or by two “authorised signatories” – which is defined to mean any director and the company secretary.
In Hilmi & Associates v 20 Pembridge Villas Freehold Ltd, the Court of Appeal held that, where a landlord was required to sign a document for some “formal legal purpose” and was a corporate entity, then this engaged the provisions of s.44 of the Companies Act 2006.
In Northwood v Fearn & Cooke, the tenant fell into rent arrears and was served a s.8 Housing Act 1988 notice seeking possession. The notice was in the correct form and was signed by a property manager employed by the landlord. The tenant defended the claim for possession, arguing that the notice was invalid as the landlord was a corporate body and as the notice being required for a formal legal purpose, should have been executed in accordance with the Companies Act 2006.
The tenant brought a counterclaim for a penalty award under s.214(4) Housing Act 2004 on the grounds that the prescribed form for the provision of prescribed information about the security deposit demanded a signature by the landlord, had only been signed by one director of the landlord company, without a witness.
Principles from the Appeal judgment:
1. The requirement for a corporate landlord to execute a document only applies where the relevant statutory provision requires the landlord and only the landlord to sign. Section 8 notices may be signed by the landlord or an agent, so there is no requirement for execution.
2. The confirmatory certificate was (at the relevant time) required to be signed by the landlord alone and consequently the trial judge was correct to hold that it was not valid.
1. Since 26 March 2015 a landlord’s agent or the landlord themselves can sign the Confirmatory Certificate. Therefore the decision on the cross-appeal is only relevant to prescribed information given before that date.
2. If lettings agencies set up as corporate entities sign such documents, must they execute them? This might be an issue for another case. In the meantime, concerned agencies might wish to ensure their contracts list a named individual as the agent, rather than the employer company.
3. Section 21 notices. It is considered that, because the prescribed form (form 6A) permits either a landlord or agent to sign, the requirement for execution will not apply.
4. Corporate landlords and lettings agencies which act on their behalf should check all prescribed information documents given before 26 March 2015. Where they have not been executed in accordance with s.44 Companies Act 2006, new versions should now be given to the tenant as failure to do so would render any subsequent notice under s.21 Housing Act 1988 invalid.
See Lyon Chambers news page for full article.