A landmark Court of Appeal case with potentially calamitous consequences has cleared up uncertainty about who has the authority to sign section eight notices and deposit protection certificates, explains the lawyer representing the winning landlord company.

David Smith (pictured) of legal firm JMW says if the firm had lost the critical case earlier this week, it would have made business largely impractical and led to tenants making huge numbers of deposit claims against their landlord or letting agent.

“Recent possession orders obtained and not enforced could have been appealed, existing possession orders would have collapsed – it would have had a big impact on landlords across the country…with potentially widespread bankruptcies as a result,” says Smith.

Instead, it was a significant victory as Appeal Court judges found in favour of the landlord in Northwood Solihull v Fearn & Ors, which centred on the Solihull branch of letting and estate agency Northwood.

It had served a Section 8 eviction notice on tenants Mr Fearn and Ms Cooke who argued that this, as well as a certificate for their deposit, had not been signed by two authorised signatories or by a company director in the presence of a witness, but by another company employee instead.

Smith says the ruling means that if you’re a corporate landlord or agent acting in a corporate capacity, your employees can continue to sign documents on your behalf.

Tea maker

“As long as the employee has the authority to do so, for example, a property manager – however, if your job is to make tea then you probably don’t.”

He adds that the Court of Appeal has effectively ruled that it’s up to Parliament to protect tenants with laws: “It’s not for lawyers to come up with tricks to make it more difficult for landlords.”

The tenants have now sought permission to appeal to the Supreme Court although Smith doesn’t think the Appeal judges will give permission and expects that a section 21 will be served.

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rent arrears

Timothy Douglas, (pictured) Head of Policy and Campaigns, at trade body Propertymark says: “The decision by the Court of Appeal brings much needed clarity to a long-disputed area of the law and is a victory for common sense, which agents will welcome.

“The retrospective judgement from the High Court dangled the possibility for ramifications for the sector with a significant number of claims against agents. Due to the potential implications, Propertymark was pleased to contribute to the costs of the appeal by the landlord.

“The judgement does however go much wider and the same rational will surely apply to virtually every notice prepared for a corporate landlord, from Section 21 Notices to rent increase notices and even notices to quit.”

Watch David Smith talking more about the case.

Read the judgement in full.

3 COMMENTS

  1. Yet again tenants are being given presumption that they can evade the spirit of the law and indeed the letter.

    Preventing LL from obtaining easy repossession wil just cause LL to sell up.

    We already have the ridiculous SNP Scottish Govt removing ALL mandatory grounds for repossession.

    What sane Scottish LL would remain in business if that business is at a very real risk of being bankrupted by some feckless probably rent defaulting tenant.

    Wild horses couldn’t drag me to become a Scottish LL!!!

    When mandatory grounds for repossession are removed the business is no longer viable.

    BTL lenders in particular could well just stop lending!

    Lenders to have the confidence to lend always need to know that a property may be easily repossessed if deemed necessary.

    The new stupid Scottish tenancy regulations prevent this easily happening.

    The big problem for English LL is that where the Scottish Govt goes the English Govt follows!!

    Removal of mandatory grounds effectively wipes out the PRS and will cause a massive property price crash.

    Inability to recover investment assets when required wipes out the INVESTMENT viability.

    LL selling off will cause mass bankruptcies and negative equity across the whole property market.

    It would effectively enshrine in law tenant fecklessness.

    Why would anyone wish to risk their capital when some feckless scroat tenant could deprive them of their asset!!??

    This dopey Scottish regulation ISN’T CURRENTLY in England.

    But it is not a stretch of the imagination to see it introduced in England.

    No way would I even consider investing in the Scottish PRS.

    You couldn’t even give me a Scottish letting property!!

    To have letting property viability based on what a feckless tenant might do is no viable investment.

    .

  2. One wonders who is funding the tenants. Is it Legal Aid? Or is it no-win no-fee. If the latter can’t see it getting as far as Supreme Court as having lost at Appeal Court it would be a risky bet for the tenants legal team. The legal costs so far must exceed by far any penalties/rent repayments the tenants are ever likely to be awarded by the court.

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