How to Sign Notices (and Other Section 8 Pitfalls)

Ratcliffe & Ratcliffe v Patterson & Porter, County Court at Luton, 17 March 2020 has been reported on the Nearly Legal website.

The case is a first instance judgment so not necessarily binding but can nevertheless be referred to. The landlords were the Ratcliffes, the tenant Ms Patterson and the guarantor was Mr Porter. The guarantor had no part in the possession claim.

There was an assured shorthold tenancy and the last fixed term began in Jun 2018.

There were rent arrears and a section 8 notice was served under the usual grounds 8,10 and 11 after which, a claim for possession was made. The claim was defended and counterclaimed on a number of grounds:

• the section 8 notice was invalid
• disrepair
• breach of tenancy deposit rules
• claim for breach of Equality Act 2010

The Section 8 Notice

The tenant said the section 8 notice was invalid because:

• the notice should have contained the name and address of landlord as it was a demand for rent (s.47 Landlord and Tenant Act 1987)
• the notice was signed by an agent who was a limited company and as such, should have been signed in accordance with section 44 Companies Act 2006.

Name and Address of Landlord

It was accepted that a section 8 notice was a demand for rent but the fact that the notice did not comply with section 47 did not invalid the notice itself. The penalty for failure to provide the name and address of a landlord on a demand for rent is that:

any part of the amount demanded which consists of a service charge or an administration charge (“the relevant amount”) shall be treated for all purposes as not being due from the tenant to the landlord at any time before that information is furnished by the landlord by notice given to the tenant

As the amount demanded in the section 8 notice was for rent only and there were no service nor administration charges, there was no applicable sanction under section 47 and as such the notice was valid under this defence.

Signed by a Company

The notice was signed by your-move.co.uk a limited company but was not signed in accordance with section 44 Companies Act 2006 and it was therefore held by the court that the notice was invalid for this reason.

This decision followed the earlier decision of Bali v Manaquel Company Limited, County Court at Central London (HHJ Hand QC), 15th April 2016 which held tenancy deposit prescribed information was invalid if given by a company but not signed in accordance with s.44.

The section 8 notice in this case only had one signature but if a company is signing a document which is to be executed (described in cases above as having some “formal legal purpose”) must be signed in one of the following ways (preferably use below as a hierarchy):

• two directors
• one director and company secretary
• one director and a witness who attests the signature

Under the section 8 procedure, the court has the power to dispense with the need for a section 8 notice except for ground 8. Therefore, notice was dispensed with but only for grounds 10 and 11 (the discretionary ret arrears grounds). The effect of this was to allow the claim to continue but only on grounds 10 and 11.

Disrepair

The tenant counterclaimed against rent owing due to alleged disrepair which were identified by a single joint expert as:

• cracked and holed plaster
• defective toilet flush
• broken light fitting
• leaking bath
• leaking boiler
• failing to repair flooring in toilet and bathroom.

It was claimed by the landlord that anything reported had been repaired.

Cracked and Holed Plaster

No damages were awarded as they were minimal.

Defective Toilet Flush

No damages awarded as no evidence of a problem was found by the expert.

Broken Light Fitting

There was no evidence that the tenant had reported the problem to the agents some years previously but nevertheless, it was held that the tenant probably did so with it being so dangerous. Damages were awarded at 10% of the rent for two years amounting to £1920.

Bath Leak

The expert noticed evidence of a leak which was likely historic. It was a fairly minor leak and damages at 3% of rent for 60 months amounting to £1440 were awarded.

Boiler Leak

The expert found evidence of a leak but was fairly minor. Damages of 2% of rent for one year totalling £192 were awarded.

Damage to Toilet and Bathroom Flooring

There was no covering on the floor but the expert found the floorboards to be sound and adequate. There was no obligation to replace coverings as did not fall under s.11 repairing (structure of building) and no damages awarded.

Total Disrepair Damages

The total disrepair damages awarded were £3552 plus a 10% uplift (Simmons v Castle) £3907.20 and the landlord was ordered to carry out the repairs.

Tenancy Deposit Requirements

The deposit was £950 and had been protected. However, the prescribed information had been given by the limited company agent and only contained one signature and following Bali v Manaquel Company Limited was therefore invalid. There was the initial breach for the first tenancy, another breach when the tenancy went statutory periodic in June 2015 (Superstrike) and then the renewal tenancy in June 2018. Because the deposit had been correctly protected and the failure was not substantial, the lowest penalty of one times deposit was awarded for each breach totalling £2850.

Disability Discrimination

The tenant also defended and counterclaimed for discrimination under the Equality Act 2010 of which, section 15 provides: 

It was held and accepted by the landlord that they were aware of the tenants disability. The court also accepted that on balance, the arrears were probably as a consequence of the disability. As it was accepted that the landlord was aware of the disability, the question was whether the section 8 notice and subsequent possession proceedings were a “proportionate means of achieving a legitimate aim”. In Akerman-Livingstone v Aster Communities Limited [2015] UKSC 15, it was held that:

The objective – to restart an income stream from the property – was sufficiently important to justify limiting a fundamental right.

However, it was held that the means chosen by the Ratcliffes’ were more than necessary:

The landlords should have requested direct payment of the housing element of Universal credit, and should have sought a meeting with the tenant to discuss bringing the rent account back into order. Proceedings at the earliest opportunity to possession proceedings on the mandatory ground was disproportionate without having taken those steps. Alternatively possession proceeding could have been commenced on the discretionary grounds only. This would not have been disproportionate as it would allow the court to exercise its discretion as appropriate.

The tenant had claimed compensation for the discrimination and injured feelings but there was no evidence that the discrimination was intentional. Furthermore, it was only the inclusion of the mandatory ground 8 which was disproportionate. Nevertheless, the court held that the there was significant stress being caused through a fear of loosing their home and the inclusion of ground 8 (being a mandatory ground) had made this worse. Damages were awarded to the tenant at the lower end of guidelines plus a Simmons v Castle uplift of 10% totalling £2200.

Claim Outcome Summary

The rent arrears as at 20 January 2020 were found to be £8017.98. The total counterclaim came to £8957.20 so the arrears were entirely cleared with £939.22 payable to the tenant by the landlord. Under grounds 10 and 11 (the remaining discretionary grounds), no possession order was made because that would have been unreasonable:

If there were any arrears remaining they were not significant. The rent could be recovered directly from Universal Credit and Ms P had a standing order in place for the remainder. There had been a long history of timely rent payments before the recent arrears.