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Legal case

The High Court confirms whether a landlord can determine a fixed term (including flexible) tenancy during its fixed term

In a recent case, the High Court determined the preliminary issue of the correct manner in which to determine a secure flexible tenancy during the…

Executive Summary

In the case of Croydon LBC v Kalonga [2020] EWHC 1353 (QB) the High Court determined the preliminary issue of the correct manner in which to determine a secure flexible tenancy during the fixed term including whether, and if so how, any principles relating to forfeiture apply.

Facts

Ms Kalonga was granted a five-year term flexible tenancy by Croydon LBC who then sought possession during the fixed term. Croydon LBC served a Notice Seeking Possession relying on grounds 1 and 2 of Schedule 2 of the Housing Act 1985 (rent arrears and anti-social behaviour (“ASB”) were alleged). Croydon LBC also brought a claim for possession under section 82(1A)(a) Housing Act 1985. The claim was defended on the grounds that it was only possible to determine a flexible tenancy during its fixed term by way of forfeiture and the tenancy did not contain a forfeiture clause.

Due to the number of flexible tenancies in England, granted by local authorities that do not include a forfeiture clause, the matter was transferred to the High Court to determine the preliminary question: “How does a landlord under a secure flexible tenancy obtain possession during the fixed term?”.

Croydon LBC submitted that a forfeiture clause should be read into the tenancy agreement, relying on clauses detailing that they “may end a secure tenancy by a notice seeking possession”. It was also submitted that the tenancy agreement fell within section 82(1)(b) Housing Act 1985 and that it was not parliament’s intention to limit section 82(1)(b) to termination by forfeiture alone. Croydon LBC also argued that section 82(1A) provides three ways for a landlord to determine a (fixed-term) secure tenancy and the landlord is entitled to elect between any of these different options.

Ms Kalonga maintained that, while there were terms in the tenancy agreement providing that the landlord may “seek possession under the grounds set out in Schedule 1 of the 1985 Act”. These terms do not give the landlord a right to re-enter the property, nor do they amount to a right to forfeit the tenancy agreement. It was submitted that a possession claim in respect of a flexible tenancy requires that the fixed term be terminated by way of forfeiture proceedings.

High Court Decision

The High Court dismissed the claim for possession. It was held that a flexible tenancy is not “subject to termination” by the landlord for the purposes of s.82(1)(b) in the absence of a break clause or forfeiture clause.

Accordingly, for a landlord to determine a flexible tenancy before the end of the fixed term there must be an express forfeiture clause within the tenancy agreement. A landlord will then have the option to determine the tenancy in accordance with the forfeiture clause or to elect any of the three options available under section 82(1A).

Permission has been sought to appeal to the Court of Appeal.

This case will also be of interest to all social landlords granting fixed term tenancies and not just local authority landlords.

If the content of this update raises any issues for you, or you would like to discuss, please liaise with Sian Evans, Partner at sian.evans@weightmans.com.

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