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Posted by Ellie Dreisenstock on February 1, 2022
A landmark case that questioned whether letting agents are permitted to sign eviction notices on behalf of their landlords has been answered following the Court of Appeal’s final verdict in the Northwood Solihull vs Fearn/Cooke/Ors dispute.
The ruling has resolved what were serious implications for landlords and agents in England and Wales, with judgement handed down after more than two years of legal quarrels.
Here, we provide an overview of the case and its impact on the practices of letting agents and landlords going forward.
The case arose as a result of the letting agency Northwood’s Solihull branch using a Section 8 notice to evict a couple who had stopped paying rent in 2019.
Both the Section 8 notice and the deposit certificate were signed by the landlord company but through the property manager of Northwood Solihull.
The tenants, Mr Fearn and Ms Cooke argued that the notice was invalid, because the landlord was a company, and under Section 44 of the Companies Act 2006, the notice had not been signed by two authorised people or a company director with a witness – also affecting the validity of the deposit certificate.
If right, this proposed position would cause practical and logistical challenges to agents and landlords with national operations who need to authenticate hundreds of these documents every day.
During the first hearing, the judge ruled that Section 44 didn’t apply to the eviction notices, but it did to the deposit certificate.
The couple then appealed against the eviction ruling, and the landlord cross-appealed against the deposit certificate ruling, claiming that even having a second signature would have done nothing to improve the tenants’ position.
After months of back-and-forth, the case was elevated to the High Court at a hearing held on December 21 2019, and later to the Civil Division of the Court of Appeal.
January 26 2022 saw judges give their final verdict on the case. They ruled that the deposit certificate could be signed by a person acting on behalf of the landlord. As the certificate was signed by the property manager who was authorised to sign these documents, the document was properly executed.
In addition, the Court of Appeal considered the implications of non-compliance for both the certificate and notice, and it was held that non-compliance would not invalidate the documents.
The Court of Appeal’s decision addressed a number of legal principles for agents and landlords, all of which have direct practical implications for the way both parties operate their business on a daily basis.
The verdict means that a single authorised employee of a company landlord or letting agent can sign a Section 8 notice, Section 21 notice or a tenancy deposit certificate without fear of legal repercussions.
Had the judgment not gone in the landlord’s favour, it would have had a catastrophic impact on any notices and deposit certificates executed in this way.
Will Eastman, Head of Legal and Claims at Let Alliance, said the case has been closely followed by landlords and lettings professionals for months ‘with good reason’.
“The points in dispute boiled down to whether Section 44 of the Companies Act 2006 applied to signing a Section 8 notice and a Deposit Certificate. If it did, it was argued the documents were invalid,” he stated.
“Thankfully, the Court dismissed the tenants’ appeal and allowed the landlord’s cross-appeal. If the Court found in the tenants’ favour, there would have been far-reaching consequences for tens of thousands of landlords.”
Will Eastman claimed the decision will be ‘somewhat reassuring’ for landlords across England and Wales, many of whom will still be recovering from the ‘legislative whirlwind’ of the past two years.
For now, landlords and letting agents can continue to operate as normal, so long as all the required information is provided to tenants on a notice and the deposit certificates.