The Veterans Land Act Requires Special Consideration #13

By Gerry Neely
B.A. LL.B.

A listing given by a veteran who occupies land and improvements under an unregistered Agreement for Sale from the Director, The Veterans Land Act, requires special consideration on the part of the licencee who takes the listing. The reason for this is that the veteran does not have an unfettered right to sell his property. Section 11(5) of the Veterans Land Act provides that a veteran who has entered into a contract with the Director for the purchase of land and improvements may not during the term of that contract, sell, assign or otherwise dispose of the land and improvements, unless payment in full is made to the Director of the cost to the Director of the land and improvements, interest accruing on that sum to the date of payment, and all other amounts owed to the Director by the veteran which are secured by the contract.,

Upon the acceptance by the Veteran of an offer, the usual practice has been to persuade the local V.L.A. officials to requisition a Transfer, to be exchanged for the amount due from the veteran. The success of this practice depends upon a willing vendor and purchaser, because if either declines to proceed, specific performance of the Interim Agreement could not be granted. This is the effect of a decision of the Supreme Court of British Columbia, where a veteran who still owed monies to the Director at the time he accepted an offer for the sale of his property, refused to complete. The Court held that the prohibition against the sale by the veteran, where monies were still owed to the Director, meant that the agreement to sell was invalid. In reaching this decision, the Court followed earlier cases which also had held that similar agreements were invalid because they contravened the Statute.

What should you do, as licencee? Ask the veteran whether he still owes money to the Director, and if he does, try to have him pay in full that debt. However, the veteran may balk at that suggestion, because of his reluctance to lose the low interest rate in the event that the sale isn't made. If so, try and arrange with the veteran to consent to have the Director sell the lands and improvements in accordance with Section 13. If this is done, the validity of a contract entered into between the Director and a purchaser could not be challenged merely because the veteran was still indebted to the Director.

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