Since 06 April 2007, landlords of assured shorthold tenancies in England and Wales have been legally required to protect their tenants’ deposits in an authorised tenancy deposit scheme within 14 days of receipt of the deposit monies. Landlords must also provide tenants with prescribed information about the scheme (which contains a confirmatory certificate from the landlord) within 30 days of the deposit being received. If the legislation is not complied with the landlord may be prevented from serving a valid section 21 notice to recover possession of the property and/or the landlord may have to pay a fine.
The case of Northwood Solihull v Fearn & Ors called into question the signing of prescribed information by a corporate landlord or agent. The prescribed information had been certified by the property manager who was authorised to sign this document. The tenants argued that the prescribed information had not been validly executed which in turn invalidated their eviction notice. This case also looked at the execution of section 8 possession notices, but that is beyond the scope of this post.
In January 2020, the High Court ruled that where the landlord is a corporate landlord, they must sign the prescribed information in accordance with s44 of the Companies Act 2006 which requires signatures from two directors, or a director and company secretary, or a director who signs in the presence of a witness. The High Court held that the prescribed information had not been signed in accordance with s44 of the Companies Act 2006 and was therefore not valid.
The Court of Appeal overturned this decision (which will be welcomed by landlords and letting agents) and held that the prescribed information can be validly signed by an authorised individual on behalf of a corporate landlord or agent. It can also be signed in accordance with s44 of the Companies Act 2006. The Court of Appeal also confirmed that if the prescribed information had not been signed by an authorised individual on behalf of a corporate landlord or agent, nor signed in accordance with s44 of the Companies Act 2006, it wouldn’t necessarily invalidate the document. Each case would be considered on its own merits, taking into consideration the specific facts of that case.
Note that it has now been announced that the Renting Homes (Wales) Act 2016 (which will change all aspects of renting residential property in Wales), is due to come into force 15 July 2022. This Act will introduce a new tenancy deposit scheme in Wales. We will be producing further content on the new rules for Wales in due course.