Lawyers will argue in a Saskatchewan court Wednesday about whether a municipality went outside the law when it offered to buy up residents' homes without telling people it was the buyer.

Last summer, people in the tiny hamlet of Lone Rock, Sask., complained after it was revealed that the Rural Municipality of Wilton had formed a numbered company and hired a real estate agency to buy up homes in the hamlet, all the while withholding its identity as the buyer.

Lauren Wihak, a lawyer hired by current and former Lone Rock residents, says the municipality has no legal basis for its plan to redevelop the purchased land. The hamlet also wants a Battleford Court of Queen's Bench judge to put a stop to the redevelopment plan, which happened "with the mere stroke of a pen and without consultation," according a legal brief prepared by Wihak.

Wihak said the RM withheld its identity, "for the express and admitted purpose of keeping sale prices from inflating, lest the sellers became aware that the buyer was Wilton."

The municipality declined to comment going into Wednesday's court hearing.

Wihak says the case raises questions about the steps a municipality takes when it makes decisions that disrupt the lives of its residents.

One of Wihak's clients, Janis Lavois, claims she sold her house to the real estate company under pressure and that she now can't afford to buy a new home with the proceeds of her sale.

Wihak said The Municipalities Act gave the municipality no authority to take the steps it did, nor did the municipality draft any bylaw or resolution to legally bolster its plans.

'Decrepit properties to be cleaned up'

The municipality has called its plan the "Lone Rock Renewal Project."

As described on the municipality's website in August 2018, the plan called for the conversion of the hamlet into newly developed lots within a "country residential subdivision." Residents would pay to install their own water and sewer services, instead of the municipality continuing to fund existing water and services.

The RM told residents those services had become too costly to maintain and upgrade.

Glen Dow, the reeve of the Municipality of Wilton, said in a deposition given in preparation for the case that the home purchases would allow for "decrepit properties to be cleaned up and thereby improve the appearance of the town."

Dow also said it would reduce water and sewer infrastructure costs and allow the RM of Wilton to make future land sales.

The municipality now owns 62 lots in the hamlet, with services shut off at all but two of them, according to Dow's deposition.

The status of the conversion plan is unclear. CBC News has reached out to the Saskatchewan government, which approves such plans.

Wednesday's court hearing begins in the Battleford Court of Queen's Bench at 10 a.m. CST.