Judges are deliberating whether to allow an appeal in an evictions and rental deposit case that threatens to wipe out many letting agents.
The Northwood Solihull v Fearn & Ors case surfaced when the Solihull branch of letting and estate agency Northwood tried to evict a couple who had stopped paying their rent in 2019, and served a Section 8 eviction notice.
Tenants Mr Fearn and Ms Cooke argued during an initial County Court hearing that under section 44 of the Companies Act 2006 their eviction notice had not been signed by two authorised signatories or by a company director in the presence of a witness and that the section 44 requirements also applied to the confirmatory certificate for their original deposit.
High Court judges then ruled that this law did not apply to eviction notices, but they did uphold the couple’s claim that it applied to a confirmatory certificate for a rental deposit.
Court of Appeal
At a Court of Appeal hearing, the tenants’ lawyer said the signature on the notice was not obviously the signature of an individual. He explained: “The tenant who receives the notice is going to look at it and see the squiggle and conclude that it was the signature of the company.”
However, the landlord’s lawyer said there was nothing wrong with the section 8 notice and that it made much more sense for a property manager to deal with it than the property owner. He told the court: “The company can appoint someone to sign. It’s very odd that you can grant a tenancy with a single signature but you need two signatures to serve a notice.”
He added that regarding the deposit, a signature could include anyone acting on a landlord’s behalf. “Nothing would have improved the tenants’ position by having a second signature added.”
According to property lawyer David Smith of JMW, as things currently stand, if a corporate agent has signed a proscribed [rental deposit] information certificate on behalf of a landlord, then if it has not been signed by a director and witnessed, the certificate will be defective. He believes this could prompt a raft of claims against agents.