The recent High Court decision in Hoggarth v Bowler [2025] EWHC 1077 (Ch) highlights the importance for charity trustees to comply with their statutory requirements when disposing of charity land. This case concerns the requirements for non-exempt charities to obtain a Designated Adviser’s Report and offers welcome reassurance to charities and their trustees involved property transactions.
The Charities Act 2011 sets out the duties of trustees of non-exempt charities in relation to the disposal – including the sale and letting – of charity land. These requirements are set out in Part 7 to that Act and must be complied with strictly by all non-exempt charities on a disposal of land. Failure to comply can render transaction void or voidable and can leave trustees personally liable for any losses suffered by the charity.
In this case the High Court struck out a claim brought against charity trustees of the Bridlington Charities (the ‘Charity’) by H Lount & Son Limited (the ‘Company’), finding the Charity’s trustees had complied with their statutory duty in relation to the disposal of charity-owned land.
The Case
The Charity’s trustees made a decision to sell land owned by the Charity, and in compliance with their obligations under Part 7 of the Charities Act obtained a report as required from a charted surveyor. The sale was then opened to bids, with all bids having to comply with a set of requirements.
The Company made two bids to purchase the land, neither of which complied with the bidding process and were rejected. The Charity’s trustees accepted another, compliant, bid and proceed to enter into an exclusivity agreement.
The Company sought to block the sale claiming that the sale to the successful bidder would be in breach of the Charity’s trustees’ duties. The Company alleged that the Charity’s trustees had failed to obtain a Designated Adviser’s Report pursuant to section 119 of the Charies Act and applied for an interim injunction to prevent the transaction from proceeding. The High Court dismissed both the claim and the injunction application, concluding there was no realistic prospect of success.
Importantly, the Court confirmed that the Charity’s trustees had acted properly and complied with their obligations under section 119 of the Charities Act 2011 and the Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023. The advice obtained from the chartered surveyor was deemed compliant with the statutory requirements, and the Charity’s trustees’ rejection of non-compliant bids was held to be entirely reasonable.
Conclusion
This decision stands as a rare and instructive review of the formal requirements governing the sale of charitable land. It reinforces the principle that trustees are entitled to exercise informed judgment and rely on professional advice without undue interference, provided they have otherwise complied with their statutory duties. Had the trustees not complied with the requirements of the Charities Act, the impact to the Charity and its trustees, financially and reputationally, could have been substantial.
Charities and their trustees should not forget that they must ,in addition to their statutory duties, ensure compliance with their own governing documents which may place additional restrictions and requirements on disposing of charity land.
If you have any queries in relation to the above or would like to discuss the disposal of charitable land, please contact Nishita.Gudka@lbmw.com.