Q. We are a letting agency trading through a limited company. Our staff have always signed all our paperwork as individuals on our behalf. However, I have read that documents may need to be signed differently under the Companies Act. Is this correct and what are the implications of failing to do this?
A. Section 44 of the Companies Act 2006 provides that for a document to be properly ‘executed’ it must be signed by:
- Two directors of the company, or
- A director of the company and the company secretary, or
- A director of the company in the presence of a witness who attests the signature
There has been a recent case, Northwood Solihull Ltd v Fearn, which looked at this in the context of section 8 eviction notices and tenancy deposit prescribed information notices where a landlord had not signed these in accordance with the Companies Act.
The court held that the section 8 notice could, notwithstanding this, be deemed validly served but not the prescribed information form.
Although this case concerned a landlord, letting agents are now authorised under the Deregulation Act to sign prescribed information forms. Under this case, any which have not been signed properly on behalf of corporate letting agents could be invalid – which would make the agent and landlord liable for the penalty of 3x the deposit sum and render section 21 notices invalid.