Croydon London Borough Council v Kalonga

A fixed-term secure tenancy retains the contractual and proprietary security conferred by its terms. The Housing Act 1985 does not itself create a right for the landlord to terminate the tenancy early.

A tenancy is “subject to termination by the landlord” under section 82(1)(b) only when a contractual right of early termination has become exercisable and any required steps have been taken. Where the available right is forfeiture for tenant default, the landlord must obtain a termination order under section 82(3), preserving the tenant’s opportunity to seek relief. An exercisable non-default break right may instead support possession on an available statutory ground.

A local authority granted a tenant a five-year flexible secure tenancy. During the fixed term, it sought possession for alleged rent arrears and anti-social behaviour but expressly declined to rely on forfeiture. The tenancy expired while the preliminary issue was awaiting judgment, producing a statutory periodic tenancy.

The High Court dismissed the possession claim: [2020] EWHC 1353 (QB). The Court of Appeal dismissed the authority’s appeal: [2021] EWCA Civ 77. It held that a fixed-term secure tenancy could be ended early only through termination in lieu of forfeiture under section 82(3) of the Housing Act 1985.

The Supreme Court considered when a fixed-term secure tenancy is “subject to termination by the landlord” under section 82(1)(b), whether forfeiture is the only route to early termination, and whether the particular tenancy contained forfeiture provisions.

1. Appeal allowed in part. The possession claim was properly dismissed, but the courts below had incorrectly concluded that the tenancy agreement contained no forfeiture provision. The declarations required reformulation.
2. Section 82 of the Housing Act 1985 supplements rather than removes the contractual and proprietary security of a fixed-term tenant. Parliament had not used clear words or necessary implication to deprive tenants of that existing security. Section 82(1) is prohibitory, not enabling: it restricts a landlord’s otherwise existing right to terminate and does not create a new right of early termination.
3. A fixed-term tenancy is “subject to termination by the landlord” under section 82(1)(b) only when a right of early termination contained in the agreement has become exercisable. A break clause therefore permits use of the statutory possession grounds only once its conditions have been satisfied and any necessary notice or other procedural step has been completed. If the right expires or is waived, the statutory termination options cease to be available.
4. Where the only available contractual route is forfeiture, the landlord must seek a termination order in lieu of forfeiture under section 82(3), before or together with possession on a statutory ground. Section 82(4) applies section 146 of the Law of Property Act 1925, preserving the tenant’s opportunity to seek relief. If termination is ordered and relief is not granted, section 86 of the Housing Act 1985 creates a follow-on periodic tenancy.
5. Forfeiture is determined by substance, not drafting form. A right is a forfeiture right where its exercise ends the lease earlier than its natural termination and it is exercisable upon tenant default. The agreement’s provisions permitting possession at any time for rent arrears, anti-social behaviour or other tenant breaches were therefore forfeiture provisions. By contrast, its non-default possession provisions operated as a break clause and did not attract relief from forfeiture.
6. The authority relied only on default grounds but had expressly declined to seek termination in lieu of forfeiture. Its possession claim was therefore bound to fail. The fixed term had subsequently expired by effluxion of time, and the tenant occupied under a separate follow-on periodic tenancy.

1. United Kingdom Supreme Court: Allowed the authority’s appeal in part. It upheld dismissal of the possession claim but rejected the conclusion that the agreement contained no forfeiture provision and invited submissions on revised declaratory relief.
2. Court of Appeal: Dismissed the authority’s appeal in [2021] EWCA Civ 77. It held that early termination of a fixed-term secure tenancy required termination in lieu of forfeiture under section 82(3) of the Housing Act 1985, and agreed that the agreement lacked a forfeiture provision.
3. High Court: Dismissed the possession claim in [2020] EWHC 1353 (QB). It held that the agreement lacked a forfeiture provision and therefore was not “subject to termination by the landlord” under section 82(1)(b).