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Termination of flexible tenancies in the fixed term

A Supreme Court judgment will have a significant impact on secure tenancies, writes Justin Bates.

On 9 March 2022 the Supreme Court handed down judgment in Croydon LBC v Kalonga [2022] UKSC 7, concerning terminating a flexible tenancy in the fixed term.

With the Housing Act 1980, Parliament conferred security of tenure on local authority tenants by creating the “secure tenancy”. The vast majority of local authorities have, since 1980, granted periodic secure tenancies. A landlord who wishes to obtain possession against a periodic secure tenant simply serves notice in the prescribed form and then issues possession proceedings. In those proceedings, the court will (usually) have to decide whether a statutory ground for possession is made out, whether it is reasonable to make an order for possession and whether the order should be immediately enforceable or should be suspended on terms.

In 2011, however, the coalition government introduced the “flexible tenancy” (Localism Act 2011). This is a form of fixed-term secure tenancy with a bespoke provision for the landlord to recover possession at the end of the fixed term (see s.107D, Housing Act 1985). But how does a landlord recover possession during the fixed term?

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That was the question for the Supreme Court in Croydon LBC v Kalonga. It has held that there are two ways in which a landlord under a fixed term tenancy can recover possession during the fixed term. The first is where the tenancy contains a contractual break clause. The landlord can exercise that clause and then seek possession under the usual statutory grounds for possession in a similar way to that applicable to periodic tenancies (i.e. ground, reasonableness, suspension etc). The second is where the tenancy contains a forfeiture clause. In that case, the 1985 Act has provision (ss.82(1A), (3), (4), 86) for a special form of forfeiture to apply. If the tenancy contains neither type of clause then it cannot be terminated during the fixed term.

On the facts of the case, the claim for possession failed. Whilst the terms of tenancy did contain a forfeiture clause, Croydon LBC had pleaded that they did not rely on that power. The claim for possession was therefore doomed.

There are thought to be around 30,000 fixed term secure tenancies in England. Landlords and tenants now understand the position as regards possession proceedings. Whether a particular secure tenancy agreement includes a break clause or forfeiture clause remains to be considered on the facts of each case.

Justin Bates is a barrister at Landmark Chambers. He appeared for Ms Kalonga in the Supreme Court, Court of Appeal and High Court. He led Anneli Robins (4-5 Grays Inn Square) throughout the proceedings. They were instructed by GT Stewart solicitors.

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