Can a property management company sign a lease as a company?

Question

My lease does not have a physical name where it says landlord but rather the company name. It's also signed as the company name. Is that legal ?

Answer 1

My lease does not have a physical name where it says landlord but rather the company name. It's also signed as the company name. Is that legal?

Yes.

Corporations and other entities are allowed to own and lease property in their own name (there are some narrow exceptions for farm property in some jurisdictions, Alberta's rules are in the footnote of this answer). Corporations and other entities act through their authorized officers and agents, which can themselves be corporations or other entities, such as property management companies.

A typical signature block for a corporate landlord with a corporate property manager looks something like this:

1600 Pennsylvania Avenue NW, Inc., Landlord

By Acme Property Management, Inc., Authorized Leasing Agent

By James Fogworth, Vice President of Leasing

In the alternative, Acme Property Management, Inc. might affix its corporate seal in lieu of a signature by a corporate officer, although that would be very old school and uncommon in the U.S. and Canada, although this would be the norm in East Asia and Southeast Asia.

Also, it wouldn't be terribly uncommon for a lease to be signed by the tenant and not by the landlord at all, on a form tendered to the tenant by the landlord.

Footnote Re Farm Property

Canadian corporations can own farm property in Alberta, but:

Non-residents and foreign entities cannot own more than 20 acres of agricultural land in the aggregate. The penalties can be significant, including a judicial sale of the land.

Answer 2

england-and-wales

There is nothing to prevent a company from owning or renting property. More generally, in most cases where the word "person" appears in an Act of Parliament, the definition of the word includes companies thanks to Section 5 and Schedule 1 of the Interpretation Act 1978. This means that laws which apply to natural persons also apply to companies in the general case.

The way that a company legally enters into a contract depends on whether or not the contract is executed as a deed. In the case of property rental contracts, whether it is a deed will typically depend on whether it is a tenancy agreement (duration of up to 3 years) or a lease (duration of more than 3 years).

Tenancy agreements (duration <= 3 years)

Tenancy agreements do not need to be deeds and are therefore typically drafted as simple contracts (although note that the parties to a contract are always free to draft it as a deed even when it is not required). The requirements for companies entering into simple contracts are set out in Section 43 of the Companies Act 2006:

(1) Under the law of England and Wales or Northern Ireland a contract may be made — (a) by a company, by writing under its common seal, or (b) on behalf of a company, by a person acting under its authority, express or implied.

(2) Any formalities required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of a company.

There are no formalities required by law for tenancy agreements.

This means that a company can directly enter into the contract, provided that the contract is in writing, by using its common seal. Alternatively, any person authorised by the company to do so can enter into the contract (which in this case doesn't need to be in writing) on the company's behalf e.g. a director, an employee, or an agent. The way that the document is signed is irrelevant provided that the person doing the signing is authorised to do so and intends by doing so to bind the company into the contract. They can write their own name, the company name, an "X", or anything else provided that those conditions are met. Alternatively they can simply say to the tenant "I agree to the contents of this written contract" or even just say "I agree to rent you the property" without anything in writing.

Leases (duration > 3 years)

Leases are required to be entered into by deed under Section 52(1) of the Law of Property Act 1925. The requirements for a deed executed by a company are set out in Section 1(2) of the Law of Property (Miscellaneous Provisions) Act 1989 and Sections 44 and 46 of the Companies Act 2006:

1(2) An instrument shall not be a deed unless—

(a)it makes it clear on its face that it is intended to be a deed by the person making it or, as the case may be, by the parties to it (whether by describing itself as a deed or expressing itself to be executed or signed as a deed or otherwise); and (b) it is validly executed as a deed by that person or, as the case may be, one or more of those parties.

46(1) A document is validly executed by a company as a deed for the purposes of section 1(2)(b) of the Law of Property (Miscellaneous Provisions) Act 1989 (c. 34) and for the purposes of the law of Northern Ireland if, and only if — (a) it is duly executed by the company, and (b) it is delivered as a deed.

44(1) Under the law of England and Wales or Northern Ireland a document is executed by a company — (a) by the affixing of its common seal, or (b) by signature in accordance with the following provisions.

(2) A document is validly executed by a company if it is signed on behalf of the company — (a) by two authorised signatories, or (b) by a director of the company in the presence of a witness who attests the signature.

(3) The following are “authorised signatories” for the purposes of subsection (2) — (a) every director of the company, and (b) in the case of a private company with a secretary or a public company, the secretary (or any joint secretary) of the company.

As with tenancy agreements, the form of the signature doesn't matter. What matters is that the document contains the right words (so that it is a deed) and that the people signing it on behalf of the company are the correct combination of directors / secretary / witness.