Northwood Solihull Ltd v Fearn & Ors (2020) EWHC 3538 (QB)
There were two linked issues in this appeal. Where the landlord is a company, does i) a Section 8 Notice and ii) the deposit prescribed information confirmation certificate have to be signed in accordance with section 44 of the Companies Act 2006 (so signed either by two directors or a director and company secretary). The outcome has much wider significance. We’ve seen previous county court cases on both issues, here, and here.
At first instance on this possession claim, the county court had held section 44 of the CA 2006 did not apply to a notice seeking possession but did apply to a confirmatory certificate. A possession order had been made, and penalties for breach of s.214(4) Housing Act 2004 awarded to the tenants. The landlord appealed and the tenants crossed appealed, with possession order and penalties stayed.
In this case, the section 8 notice was signed by the claimants’ property manager (not a director of the company), and the prescribed information signed by a sole director of the company.
i) the section 8 Notice,
The prescribed section 8 notice set out in The Assured Tenancies and Agricultural Occupancies (Forms) (England) (Amendment No. 2) Regulations 2016 SI 2016/1118 has a signature section as follows:
“6 Name and address of landlord/licensor
To be signed and dated by the landlord or licensor or the landlord’s or licensor’s agent (someone acting for him). If there are joint landlords each landlord or the agent must sign unless one signs on behalf of the rest with their agreement.
Please specify whether: landlord/licensor/joint landlords/landlord’s agent
Name(s) (Block Capitals)…
Telephone: Daytime… Evening…
In this case, the landlord’s property manager had signed, but under the signature, has crossed out all other options except ‘landlord’. It was common ground that the notice would ave been valid if she had left ‘landlord’s agent’ instead. The tenant argued that in leaving ‘landlord’ the manager had taken on responsibility for the notice to comply with s.44 Companies Act .
Was a section 8 Notice a document that was required to be ‘executed’ by the company in terms of s.44?
A section 8 Notice is effectively a preliminary warning to the tenant and a precondition for the landlord (in particular for ground 8).
Purely as a matter of context and purpose of the Regulations and Section 8 of the 1988 Act, it is hard to identify a convincing reason why (when furthering these two purposes) the formality of execution complying with section 44 CA 2006 would be necessary as a condition of validity of a Notice. Why does it matter to a tenant that the corporate landlord has undertaken this technical step when serving this very preliminary (albeit important) notice? Although a Notice has important consequences it does share many characteristics with a letter before claim.
Further, the very fact that the Notice can be signed by a landlord’s agent like Ms Miles (where no section 44 requirement would apply), strongly suggests that less formal methods of verifying notification were considered as acceptable by the draftsman of the Regulations.
The conclusion that the High Court drew from Hilmi & Associates Ltd v 20 Pembridge Villas Freehold Ltd (2010) EWCA Civ 314 was that s.44 CA applied
if the legislation in issue and context expressly requires a signature by the relevant person itself, there is no other way of a corporate person satisfying this requirement other than by way of the general law (which requires execution under section 36A or its successor).
In terms of a section 8 notice, the judge at first instance was quite right to identify that a signature by the landlord was not statutorily required on a section 8 notice, as an agent could sign it. On that basis, the notice did not fall under what was taken to tbe the ipmort of Himli, even though the statutory formalities of a section 8 had to be met.
While the agent had crossed out the ‘wrong’ identifiers
In short, in the absence of any express statutory requirement that the Notice be signed “by” the landlord, it could be (and was) validly signed on behalf of the landlord by an authorised signatory without the need to comply with s. 44 of the 2006 Act. There was no other feature of the statutory context which persuaded me that this was not a determinative matter.
The section 8 notice was valid.
ii) The Prescribed information certification.
The prescribed information was given to the tenants in July 2014.
Before the Deregulation Act 2015 amendments, the Housing (Tenancy Deposits) (Prescribed Information) Order SI 2007/797, at Article 2(1)(g) provided:
(vii) confirmation (in the form of a certificate signed by the landlord) that—
(aa) the information he provides under this sub-paragraph is accurate to the best of his knowledge and belief; and
(bb) he has given the tenant the opportunity to sign any document containing the information provided by the landlord under this article by way of confirmation that the information is accurate to the best of his knowledge and belief.
The statute therefore prescribed signing by the landlord. It fell under Himli requirements and so must comply with s.44 CA, as it required a signature by the relevant person (in this case, the company).
This was the finding in Bali v Manaquel Company Limited (Central London County Court, 15 April 2016) (our note).
On the issue of ‘substantially to the same effect’, for which s.214(6) Housing Act 2004 provided:
(6) The information required by subsection (5) must be given to the tenant and any relevant person—
(a) in the prescribed form or in a form substantially to the same effect, (…)
This had been addressed in the judgment in Bali v Manaquel thoroughly:
It seems to me that the information required is about the compliance of the landlord with the initial requirements of the scheme in relation to the deposit, the authorised scheme, and the operation of the provisions of this Chapter in relation to the deposit by means of the information as has been prescribed. What has been prescribed is that there should be a certificate signed by the landlord. It seems to me very difficult to say that if there is not a certificate signed by the landlord then there has been the provision of information in a form substantially to the same effect. Either it is a certificate signed by the landlord or it is not.
The achievement of a signature by the landlord was not something that could be ‘substantially carried out, it either was or it wasn’t. In addition:
(1) The confirmatory certificate signed by the landlord (under Article 2(1)(g)(vii)), is not, in the context of this Article, something in the nature of “information” which must be given in the “prescribed form or in a form substantially to the same effect” (Section 213(6)(b) of the 2004 Act).
(2) The language of Article 2(1)(g)(vvi) strongly suggests that such a certificate is a freestanding document which confirms the accuracy of the actual “information” set out in the sub-paragraphs above. That actual “information” is matters such as details of the deposit and names and addresses of parties such as the landlord.
So the landlord’s signature requirement fell outside s.214(6)(a) ‘substantially to the same effect’.
Therefore the prescribed information certification did have to be signed in accordance with s.44 CA.
Appeal and Cross Appeal dismissed.
This presents some significant outcomes, with wider effects.
Section 8 notices from corporate landlords don’t need to be signed in accordance with s.44 Companies Act. The earlier County Court case of Ratcliffe & Ratcliffe v Patterson & Porter. County Court at Luton, 17 March 2020 (our note) was not right on this point. It can be signed by anyone authorised by the landlord to do so.
Deposit prescribed information certifying, prior to The Deregulation Act 2015 amendments (ie to 25 March 2015), could only be done by the landlord, and where that was a corporate landlord, the signature must comply with s.44 CA – by two directors or a director and company secretary, or if a sole director, then the director’s signature must be witnessed by another party. A failure to do so not only gives rise to a penalty for breach of s.214 Housing Act 2004, but would also invalidate a section 21 notice, if not rectified prior to service of a s.21.
[Edit – update. As has correctly been pointed out in the comments, the effect of section 30(3) Deregulation Act 2015 was to make the change to ‘landlord or initial agent’ retrospective to 6 April 2007, for all except penalty or s.21 cases that were extant when the amend came into force – 26 March 2015. So prescribed info signed by an ‘initial agent’ prior to 26 March 2015 was retrospectively validated. This also means that in this case, where the penalty claim post dated the Dereg Act, it should have been the amended form of the prescribed information order that should have been addressed. This does not seem to have been put to the court. ]
What of the position from 26 March 2015? The s.30 Deregulation Act 2015 amendment makes clear that ‘landlord’ in article 2(1)(g)(vii) is to be read as ‘the landlord or the initial agent’. There are two options here:
i) that the same conclusion as with section 8 notices must apply from that point – that the statute no longer expressly requires a signature from the landlord specifically; or
ii) That the ‘landlord or initial agent’ are specified, and are relevant people in the alternative, so following Himli, s.44 CA signatures required.
I’m leaning towards the second option. The Deregulation Act amends added a new article 2(3), which reads
(3) In a case where the initial requirements of an authorised scheme have been complied with in relation to the deposit by a person (“the initial agent”) acting on the landlord’s behalf in relation to the tenancy—
(a) references in paragraph (1)(b), (g)(iii) and (vii) to the landlord are to be read as references to either the landlord or the initial agent
(b) references in paragraphs (1)(d), (e), (g)(iv) and (vi) and (2) to the landlord are to be read as references to either the landlord or a person who acts on the landlord’s behalf in relation to the tenancy.
The relevant sub para is 1(3)(a). Now this applies only in a case where the ‘initial agent’ was the one who protected the tenancy deposit. So, there are two possible, but mutually exclusive signatories – the agent’s signature is only valid if they protected the deposit on the landlord’s behalf. if the landlord protected the deposit, the landlord must sign. The position is not the same as it is with the section 8 Notice.
Now if that is right, I think that the s.44 CA requirements would arguably still apply for a corporate landlord signing, but also arguably, for a corporate agent signing!
If nothing else, then, there are arguments to come….