Termination of fixed-term secure flexible tenancy: Whether a tenancy agreement could be terminated (Croydon London Borough Council v Kalonga – 2022)
The Supreme Court issued its recent judgment addressing the circumstances where a grant of a possession order for a fixed-term, secure tenancy may be made. In particular, the judgment decides whether a contractual provision must be contained within the agreement to end the term prior to the contractual expiry of the tenancy.
The background
In Croydon London Borough Council v Kalonga [2022], the respondent was granted a 5-year, fixed-term, secure flexible tenancy by the appellant local authority landlord. Following allegations of anti-social behaviour and with arrears of rent, the landlord served notice to terminate the tenancy and regain possession of the property. Possession was ordered under s.82(1A)(a) of the Housing Act 1985 and the tenant’s subsequent appeal was also allowed.
The tenant’s defence and counterclaim sought relief from forfeiture, stating that the landlord had failed to apply or rely on forfeiture; the landlord’s reply stated that it did not rely on forfeiture. The question then arose as to how a secure tenancy could be terminated during its fixed term, and the matter proceeded through the appeal courts to the Supreme Court.
The decision
The possession claim was dismissed by the Supreme Court, but the landlord’s appeal allowed in part. The Court addressed the following issues:
- Whether the only way a secure fixed term tenancy can be terminated during its term is by the existence of forfeiture provisions contained in the tenancy agreement and grant of a termination order under s.82(3) of the Housing Act 1985; and
- Whether the tenant’s tenancy agreement in this case contained a forfeiture provision.
The Supreme Court held that both parties’ arguments carried weight, but that neither was wholly correct. The Housing Acts 1980 and 1985 were intended to improve tenants’ security of tenure, and therefore a lessening of tenants’ rights could not be implied lightly.
The statutory provision prevent a landlord seeking possession during a tenancy’s fixed term where no contractual provision is contained to allow for early termination. Where such a provision is included in the tenancy agreement, any conditions attached to the provision must be satisfied and s.82(3) of the Housing Act 1985 used to obtain possession by way of a termination order. Fixed term tenancies which do not contain contractual provision allowing for early termination cannot be terminated or possession ordered before the end of the contractual term.
The tenant’s tenancy agreement was found to contain a forfeiture clause. However, the possession claim was dismissed because the landlord had not relied on the forfeiture clause contained in the tenancy agreement and had not complied with s.82 of the Housing Act 1985.
Advice and action for landlords
This important decision by the Supreme Court will guide landlords to ensure that, where required, tenancy agreements contain contractual provisions permitting the tenancy to be terminated early. Where a landlord wishes to exercise this provision, conditions attached to it must be shown to have been complied with.
Tenant default leading to termination will be interpreted as a right of forfeiture, whereby s.82 of the Housing Act 1985 will apply. A s.146 notice must be served under the Law of Property Act 1925 and a termination order under the Housing Act sought to end the tenancy. A possession order may then be obtained.
The tenancy agreement was found to contain a forfeiture clause. However, the possession claim was dismissed because the landlord had not relied on the forfeiture clause and had not complied with s.82 of the Housing Act 1985.
