Elizabeth Dwomoh takes a look at a case in which residential landlord and tenant law and company law collide.
Key points
- A section 8 notice is not required to be executed by a corporate landlord in accordance with section 44 of the Companies Act 2006
- A confirmatory certificate when given by a corporate landlord must be executed in accordance with section 44
Residential landlords are commonly required to serve statutory notices on tenants. If the landlord is a company, are any statutory notices served by the company only valid if executed in accordance with section 44 of the Companies Act 2006? This was the key issue on appeal in Northwood Solihull Ltd v Fearn and others [2020] EWHC 3538 (QB); [2020] PLSCS 236.
The notices and signatures
Northwood was a corporate residential landlord. On 25 July 2014, it granted Darren Fearn and Vicky Cooke an assured shorthold tenancy of a property situated in Shirley, Solihull, West Midlands.
A tenancy deposit was paid by Fearn and Cooke and protected by Northwood in an authorised scheme. Sections 213(5) and 213(6) of the Housing Act 2004 required Northwood to give them certain prescribed information. It was mandatory for the information to be in the prescribed form as set out in article 2 of the Housing (Tenancy Deposits) (Prescribed Information) Order 2007 or in a form substantially to the same effect.
Prior to 26 March 2015, article 2(1)(g)(vii) of the 2007 Order required the landlord to give the tenant a signed certificate confirming service of the required information. The confirmatory certificate formed part of the prescribed information. On 26 March 2015, section 30(3) of the Deregulation Act 2015 came into force. It retrospectively inserted article 2(3) into the 2007 Order so that, as of 6 April 2007, either the landlord or the initial agent (who first received the deposit on behalf of the landlord) could sign the confirmatory certificate.
On 26 July 2014, a director of Northwood signed the confirmatory certificate without it being witnessed. By virtue of section 44 of the 2006 Act, a company can only execute documents by either affixing a common seal or by signature. If by signature, the document must be signed by two authorised signatories or a director in the presence of a witness.
Section 8 of the Housing Act 1988 provides that a residential landlord cannot seek possession against an assured tenant on “fault grounds” without first serving a notice. The section 8 notice must be in the prescribed form or a form substantially to the same effect.
Fearn and Cooke fell into rent arrears and Northwood sought to recover possession of the property. In March 2017, Marie Miles, a property manager acting on behalf of Northwood, served a section 8 notice on Fearn and Cooke using the prescribed form. Miles indicated on the section 8 notice that it was signed by the “landlord”.
The dispute
Fearn and Cooke defended the possession proceedings. They argued that Northwood, as a corporate landlord, was required to execute the section 8 notice in accordance with section 44 of the 2006 Act. Additionally, they counterclaimed for Northwood to pay a penalty under section 214 of the 2004 Act. They argued that they had not been given the prescribed information due to Northwood’s failure to formally execute the confirmatory certificate.
Northwood was granted a possession order at trial. The judge found that section 8 of the 1988 Act did not require a section 8 notice to be signed by the landlord. Accordingly, a corporate landlord did not have to formally execute the same.
In respect of the counterclaim, the judge found that there was an express statutory requirement for the confirmatory certificate to be signed by the landlord. As a company, Northwood could only do so in accordance with section 44. It failed to do so.
The parties appealed and cross appealed.
The outcome
Relying on Hilmi & Associates Ltd v 20 Pembridge Villas Freehold Ltd [2010] EWCA Civ 314; [2010] 2 EGLR 41, Saini J accepted the general proposition that, if a statutory provision and context expressly required a signature by the relevant person itself, there was no other way for a company to satisfy that requirement other than in accordance with the law.
In the present case, section 8 of the 1988 Act did not specify that the landlord must sign the section 8 notice. Further, the prescribed form expressly permitted the section 8 notice to be signed by someone other than the landlord. Accordingly, Northwood was not required to sign the section 8 notice in accordance with section 44 of the 2006 Act.
In respect of the confirmatory certificate, the judge found that the 2007 Order specifically required it to be signed by the landlord. As a company, Northwood could only do so in accordance with section 44. A submission by Northwood that the certificate was substantially to the same effect was rejected. It was simply a binary question whether the confirmatory certificate was validly executed by Northwood or not. It was not.
The appeal and cross appeal were both dismissed.
Curiously, the confirmatory certificate issue was decided on the basis of the unamended 2007 Order when it should have been decided on the amended version that was in force. Ultimately, this did not materially alter the outcome of the appeal. The deposit was received by Northwood. A sole director of Northwood had signed the confirmatory certificate without it being witnessed. As such it was not executed in accordance with section 44 of the 2006 Act.
Elizabeth Dwomoh is a barrister at Lamb Chambers
