Landlord and tenant – Flexible tenancy – Possession – Appellant landlord seeking possession of property against respondent tenant with flexible tenancy for fixed term of five years – High Court dismissing claim – Appellant appealing – Whether flexible fixed-term tenancy with no express forfeiture clause capable of determination before expiry of fixed term – Appeal dismissed
The respondent was the flexible tenant of 61 The Crescent, Croydon, Surrey, for a fixed term of five years from 2015. The agreement contained no express provision for re-entry or forfeiture but the agreement stated that the appellant landlord could end the tenancy by serving notice seeking possession and applying for a possession order. It also stated that the landlord might seek possession if the tenant broke any of the clauses of the agreement or for a breach of any of the grounds in schedule 2 of the Housing Act 1985. The booklet accompanying the tenancy agreement stated that action would be taken against tenants who broke the terms of the agreement, including seeking possession.
In 2017, the appellant served notice on the respondent seeking to terminate the tenancy and recover possession of the property for rent arrears and antisocial behaviour. It then brought proceedings for possession in the county court under section 82(1A)(a) of the 1985 Act.
The appellant argued that, in the event of default by the tenant, a flexible tenancy could be determined by a landlord before the end of the fixed term under section 82(1A) and the flexible tenancy need not contain a forfeiture clause.
The respondent considered that, in the event of default, a flexible tenancy could only be determined before the end of the fixed term by forfeiture if it contained a proviso for re-entry; and there was no such provision in her tenancy agreement.
The High Court dismissed the claim, holding that the tenancy agreement did not fall within section 82(1)(b) of the 1985 Act and could not be determined under section 82(1A). The tenancy agreement did not include a forfeiture clause so that the appellant had no right to determine the tenancy agreement prior to the expiry of the fixed term: [2020] EWHC 1353 (QB); [2020] PLSCS 107. The appellant appealed.
Held: The appeal was dismissed.
(1) Section 82(1) of the Housing Act 1985 provided that a secure tenancy which was either: (a) a weekly or other periodic tenancy, or (b) a tenancy for a term certain but subject to termination by the landlord, could not be brought to an end except by one of the three methods specified in section 82(1A) by: (i) obtaining and executing an order for possession; (ii) obtaining an order for demotion of the tenancy; or (iii) where a tenancy was for a term certain but with a provision for re-entry or forfeiture, obtaining an order for the termination of the fixed-term tenancy and its replacement with a periodic tenancy.
Broadly stated, the purpose of section 82 was to protect tenants by providing them with security of tenure. The section had to be interpreted in the manner which best gave effect to that purpose. “A term certain” simply meant a fixed period. It was only if a tenancy for a fixed period was “subject to termination by the landlord” that it could be determined in accordance with section 82(1A).
The words “subject to termination by the landlord” in section 82(1) meant termination by any lawful means available to the landlord as a matter of contract. That was the natural interpretation of the words and was supported by the difference in wording between section 82(1) and section 82(3) and (4). If the expression was more narrowly interpreted, the tenant would not have full security of tenure. However, the key question was the availability of an order for possession under section 82(1A)(a).
(2) The appellant contended that the landlord of either a periodic tenancy or a fixed-term tenancy which could be terminated had each of the three options in section 82(1A). Seen more clearly in the context of section 32 of the Housing Act 1980, the legislative intention was that a periodic tenancy could only be brought to an end by obtaining an order for possession, while a fixed-term tenancy could only be brought to an end by obtaining an order for termination pursuant to a forfeiture clause (whereupon a periodic tenancy would come into effect pursuant to section 29). That was not affected by the changes to the statutory wording in section 82 of the 1985 Act.
The appellant’s interpretation of section 82 would render section 82(3) and (4) largely redundant. Landlords of fixed-term tenancies terminable by the landlord would simply apply for and obtain orders for possession under section 82(1A) relying upon one of the grounds in schedule 2. They could then avoid tenants invoking non-compliance with section 146 of the Landlord and Tenant Act 1925 as a defence or seeking equitable relief from forfeiture. That reading was also supported by section 86 which, on the appellant’s case, would only apply to a small proportion of fixed-term tenancies.
(3) The introduction of demotion orders in section 82(1A)(c) did not change the position. Demotion was a new and different remedy for antisocial behaviour by tenants. There was no reason why one should not be able to demote a fixed-term tenancy as well as a periodic tenancy. The judge was right to hold that a fixed-term flexible tenancy could only be terminated by the landlord if the tenancy agreement contained a forfeiture clause. Just as a landlord could not bring a fixed-term secure tenancy to an end by rescission, the landlord could not do so by exercising a landlord’s break clause or by forfeiting for breach of condition. The only way to do so, which was only available if the tenancy agreement contained a forfeiture clause, was to obtain a termination order under section 82(3): Islington London Borough Council v Uckac [2006] EWCA Civ 340; [2006] PLSCS 78 applied. Livewest Homes Ltd v Bamber [1019] EWCA Civ 1174; [2019] EGLR 40 considered.
(4) Accordingly, a fixed-term secure tenancy could only be terminated during the fixed term if the tenancy agreement contained a forfeiture clause and by obtaining an order for termination under section 82(1A)(c). As the appellant’s agreement did not have a such a clause, the claim for possession had to be dismissed.
Kelvin Rutledge QC and Riccardo Calzavara (instructed by Croydon London Borough Council) appeared for the appellant; Justin Bates and Anneli Robins (instructed by GT Stewart Solicitors & Advocates) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Croydon London Borough Council v Kalonga
