Q: Twelve years ago I sold my farm but did not get all my money for it. I have been told that I cannot collect money owing after
six years. What are my rights in this kind of
situation? I write from Manitoba.
A: In Manitoba, as in many other provinces, there is a 10-year limit on collecting money owing under an agreement for sale of land. The limitation period runs from when the last payment was made or when the purchaser last
Read Also
Ask tough questions to determine if business still works
Across the country, a hard conversation is unfolding. Many producers are starting to ask a tougher question: can we keep doing this the way we always have?
acknowledged in writing that money is owing.
What happens to the land? It will depend on the arrangement between purchaser and vendor. Assume the vendor transferred title to the land, and only retained a caveat or vendor’s lien against the land. As the vendor’s claim is not
enforceable, I suggest it could be struck off at the request of the purchaser.
In a more common arrangement, the vendor retains title and the purchaser files a caveat to protect his interest. What happens then?
A recent Saskatchewan case, Arndt vs. First Galesburg National Bank, dealt with a similar
situation. In approximately 1930, A purchased land under an agreement for sale from S, who lived in the United States.
The agreement was never found and it was unclear if all the payments had been made. S assigned his interest to the First Galesburg Bank, which filed a caveat to protect its interest. A and his successors had been farming the land since 1930 and paying taxes, but no caveat was ever filed on their behalf to protect their interest until 1999, after a caveat was filed by the neighbours.
The neighbours were interested in buying the land and a search of the title disclosed that it was registered in S’s name. They found some of S’s successors and entered into a lease including a right of first refusal to match any offer on the land. A’s successors applied to the court for an order vesting title in their names.
In Saskatchewan, as in other jurisdictions, courts have a discretionary power to place title in another individual’s name in certain limited
situations.
The court granted title to A’s successor. It found that S had abandoned his interest in the land and that the only feasible remedy was to
put the title into A’s name. The lease to the neighbour was found ineffective.
The court found that the successors who
purported to sign the lease didn’t even know about the land; it was not listed in the assets of S’s estate and that they had no legal authority to enter into an agreement.
As best as I can determine, the law is similar in Manitoba and the Saskatchewan case would be a precedent.
In your case, the important question is who is farming the land and paying taxes? If the purchaser or his successor is farming, using the above precedent – even though title is in your name – he could argue that your interest has been abandoned and that your name should be cleared off the title. I have been able to find no Manitoba case dealing with this point and I can say that these kinds of cases are rare.
In some provinces, Alberta and Ontario for example, a person who has been in continuous
occupation of land can assert title on the basis of adverse possession. So a purchaser, who has farmed the land for 20 years under an agreement and the vendor has vanished, can ask the court to put title in his name even if the agreement has not been fully paid. Saskatchewan and Manitoba law specifically bar claims for adverse possession.
Don Purich is a former practising lawyer who is now involved in publishing, teaching and writing about legal issues. His columns are intended as general advice only. Individuals are encouraged to seek other opinions and/or personal counsel when dealing with legal matters.
