The State may acquire a legal assumption about the assets of its debtor, either for amounts due under tax law (without the need to legislate to that effect) or for other claims if a particular law grants it that right. The legal hypothesis may benefit legal persons governed by public law if the special laws governing them establish or confer this right. The mortgage is acquired only by entering a notice in the appropriate land or movable register. It may concern movable or immovable property. The notice must be served on the debtor. The assumption prevails from the date of its entry in the relevant register in accordance with the general rule of article 2945 of the Civil Code of Québec. The Collection of Comments on the Civil Code of Québec (DCQ): a formula appreciated by lawyers who find relevant answers to a variety of questions on a particular legal subject. It should be noted that under the provisions of article 1069 of the Civil Code of Québec, the hypothecary creditor or any person who intends to acquire a fraction of the shared co-ownership is required to bear all the common costs due at the time of the acquisition of this part. The creditor or potential owner, on the other hand, can ask the syndicate of co-owners to pay the common costs due for the fraction. He is only required to pay these common taxes if the declaration is made available to him by the union within fifteen (15) days of the request. Unless the legal hypothesis is that of the Crown, the court may, at the request of the owner of the property encumbered by a legal hypothec, determine the assets that may encumber the hypothec, reduce the number of such assets or permit the replacement of other security sufficient to secure payment of the hypothec. The court can then order the cancellation of the registration of the legal hypothesis.
This is provided for by the provisions of article 2731 of the Civil Code of Québec. Mortgages cannot encumber unseizable property, according to art. 2668 (1) C.C.Q. Unseizable property is described in articles 694-697 and 700 of the Code of Civil Procedure of Québec. There are also limits to the use of the mortgage in matrimonial property regimes, in accordance with art. 401 C.C.Q. The mortgage guarantees the capital gain granted to the building through the work carried out or the services provided. It exists automatically, but must be retained by posting a notice in the land registry before the expiry of the 30-day period for completion of the work, in which the encumbered asset is designated and the amount of the claim is indicated. The notice must comply with article 2981(1) of the Civil Code of Québec and be notified to the owner of the property.
The Civil Code of Québec provides that the court may order the replacement of the legal hypothesis by another security if the owner proves the need, especially if a sale of the property is planned and the buyer needs an open title. This mortgage may affect movable or immovable property, or both. The property must obviously belong to the debtor of the decision and be the subject of a decision indicating, among other things, the assets and the act of the decision (in the case of maintenance or maintenance, the amount of payments and, where applicable, the indexation index). A copy of the judgment shall be attached to the communication. It must be served on the debtor. The legal hypothesis resulting from a judgment prevails under the general rule provided for in article 2945 of the Civil Code of Québec, namely the date of its registration. The waiver of the right to the mortgage set out in a contract protects the owner against the registration of a legal hypothesis against his property. However, this waiver must not be a waiver of the right to “publish” a mortgage, as this is illegal within the meaning of article 2936 of the Civil Code of Québec. Article 2726 of the Civil Code of Québec (“C.C.Q. “) establishes the legal hypothesis of construction as follows: In Quebec law, a hypothec is defined in article 2660 of the Civil Code of Québec: “A hypothec is a real right in movable or immovable property intended to perform an obligation; it confers on the creditor the right to follow the immovable property in any hands whatsoever, to take possession of it or to charge for it, to sell it or to have it sold, and then to prefer the proceeds of such sale according to the rank provided for in this Code. For their part, stakeholders in the construction industry have every interest in mastering this valuable tool offered by the Civil Code of Québec, since judicious use of the rights derived from it can make the difference between the labour and materials that are paid for and others that do not.
The fourth part of the series, devoted to security interests, rigorously and in detail analyzes articles 2724 to 2747 of the Civil Code of Québec. It is a real estate law. It strengthens and influences the building in which the work was carried out for the added value that this work brings. Claims are secured by the mortgage, as it ultimately allows the sale of the property on which the mortgage is registered in court. The legal sale price is then allocated in whole or in part to the payment of the claim of the manufacturer, reconditioner or supplier of materials. In this context, the courts have already recognized that an irrevocable bank guarantee letter constitutes a security right that could replace the legal hypothesis. An obligation may also be considered a sufficient guarantee if certain conditions are met. The mortgage covers the capital gain transferred to the building or, in exceptional cases, to the business unit, to the various lots concerned by the project. The legal hypothesis confers a real right that encumbers the property of a certain hand. Since the mortgage is an activity ancillary to an obligation, the termination of the obligation entails the termination of the hypothec.
It also confers the right to be privileged over the sale price in the event of a legal sale. Finally, it makes it possible to exercise the mortgage remedy at its discretion, namely the taking of possession for administrative purposes, the sale by the creditor, the sale under judicial control or the repossession of the pledged property. In general, the beneficiaries of the legal hypothesis are the contractor (general or specialized), the worker, the architect, the engineer and the material supplier. 2726. A legal hypothesis in favour of persons who have been involved in the construction or renovation of a property can only weigh down the property. It is acquired only for the benefit of architects, engineers, material suppliers, workers, contractors or subcontractors, in connection with the work requested by the owner of the property or in connection with the materials or services they have provided or prepared for such work. It exists without the need to publish it. Since the mortgage is a right in rem registered with the registrar, it remains in force even if the property to which it relates is sold one or more times. This is called a “resale right”. 5) Finally, the guarantees offered to the owner must be aware that a simple procedural error can be fatal with regard to the legal hypothesis, which is why it is important to respect each of the conditions of validity. For more information on the legal construction hypothec and its application under Canadian law, do not hesitate to contact one of our professionals.
This rule, interpreted restrictively1, constitutes a particularly effective guarantee because, whatever its date of registration in the land register, it prevails over any other mortgage on the capital gain transferred to the property2. Me Jasmin Lefebvre, Lawyer, Miller Thomson, Montreal It must also be a guarantee as secure as the mortgage itself. If the holder of the published mortgage does not exercise his right to the property, the mortgage expires within six (6) months of the completion of the work.