A group of tenants who sought to acquire the freehold of the property they occupy met with failure recently, after the Court of Appeal found that the notice served on their landlord was invalid because it was not correctly signed by one of the tenants.
The tenants wished to exercise their right of collective enfranchisement, under the Leasehold Reform, Housing and Urban Development Act 1993, and in 2007 they served a notice on their landlord under Section 13 of the Act. Such a notice must be signed by ‘not less than half’ of the tenants. In this case, there were seven tenants, and the notice had been signed by three individual tenants and one limited company tenant. The subject of the court case was whether or not the signature of one of the directors of the limited company, a Mr Hickey, amounted to a signature of the company.
Notices under Section 13 must be signed ‘by each of the tenants, or […] by the tenant’, unlike most other notices under the Act which can be signed ‘by or on behalf of’ the tenants. As the company’s Articles of Association were not referred to by either party, the court considered the position under general law. The Companies Act 1989, which applied when the notice was served, states that a company can sign via the signature of either two directors or those of one director and the company secretary, or by affixing the company seal.
Overturning the decision of the lower court, the Court of Appeal held that, as the notice had been signed by just one director, the requirements of the Companies Act had not been complied with and the company’s signature was therefore invalid. This meant, in effect, that the notice served on the landlord was itself invalid, as it had not been signed by the requisite number of tenants.
Partner Note
Hilmi & Associates Ltd. v 20 Pembridge Villas Freehold Ltd. [2010] EWCA Civ 314. See http://www.bailii.org/ew/cases/EWCA/Civ/2010/314.html.