A little-known evictions and rental deposit court case that threatens to ‘wipe out’ many letting agents will be heard in the Court of Appeal next week.
Northwood Solihull v Fearn & Ors first 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.
They said the attempted eviction was invalid and the case was then elevated to the High Court in December 2019. At this hearing, judges 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.
At the time, property lawyer David Smith of JMW (pictured) argued that: “The reality of this case is that, as things currently stand, if you as an agent have signed a proscribed [rental deposit] information certificate on behalf of a landlord and you’re a corporate agent, then if it has not been signed by a director and witnessed, then the certificate will be defective.
This means attempting to serve a Section 21 will not be possible, and a tenant could turn around, make a claim against you for up to three times the original deposit.”
He feared a raft of claims against agents because the High Court judgement is retrospective, going back six years, and suggested that a real solution is for the government to tweak regulations through the planned Renters’ Reform Bill.
The appeal case is being heard on 18th January.