Legal hypothecs (articles 2724 à 2732)
| Written by Me Sébastien Fiset , LL.B., B.A.A. |
| Friday, 11 June 2010 08:00 |
(Last update May 27, 2010)
CHAPTER III
LEGAL HYPOTHECS
2724. Only the following claims may give rise to a legal hypothec:
(1) claims of the State for sums due under fiscal laws, and certain other claims of the State or of legal persons established in the public interest, under specific provision of law;
(2) claims of persons having taken part in the construction or renovation of an immovable;
(3) the claim of a syndicate of co-owners for payment of the common expenses and contributions to the contingency fund;
(4) claims under a judgment.
2725. The legal hypothecs of the State, including those for sums due under fiscal laws, and the hypothecs of legal persons established in the public interest may be charged on movable or immovable property.
Such hypothecs take effect only from their registration in the proper register. Application for registration is made by filing a notice indicating the legislation granting the hypothec, the property of the debtor on which the creditor intends to exercise it, and stating the cause and the amount of the claim. The notice shall be served on the debtor.
Registration by the State of a legal movable hypothec for sums due under fiscal laws does not prevent it from exercising its prior claim.
2726. A legal hypothec in favour of the persons having taken part in the construction or renovation of an immovable may not charge any other immovable. It exists only in favour of the architect, engineer, supplier of materials, workman and contractor or sub-contractor in proportion to the work requested by the owner of the immovable or to the materials or services supplied or prepared by them for the work. It is not necessary to publish a legal hypothec for it to exist.
2727. A legal hypothec in favour of persons having taken part in the construction or renovation of an immovable subsists, even if it has not been published, for 30 days after the work has been completed.
It subsists if, before the 30-day period expires, a notice describing the charged immovable and indicating the amount of the claim is registered. The notice shall be served on the owner of the immovable.
It is extinguished six months after the work is completed, unless, to preserve the hypothec, the creditor publishes an action against the owner of the immovable or registers a prior notice of the exercise of a hypothecary right.
2728. The hypothec secures the increase in value added to the immovable by the work, materials or services supplied or prepared for the work. However, where those in favour of whom it exists did not themselves enter into a contract with the owner, the hypothec is limited to the work, materials or services supplied after written declaration of the contract to the owner. A workman is not bound to declare his contract.
2729. The legal hypothec of a syndicate of co-owners charges the fraction of the co-owner who has defaulted for more than 30 days on payment of his common expenses or his contribution to the contingency fund, and has effect only upon registration of a notice indicating the nature of the claim, the amount exigible on the day the notice is registered, and the expected amount of charges and claims for the current financial year and the next two years.
2730. Every creditor in whose favour a judgment awarding a sum of money has been rendered by a court having jurisdiction in Québec may acquire a legal hypothec on the movable or immovable property of his debtor.
He may acquire it by registering a notice describing the property charged with the hypothec and specifying the amount of the obligation, and, in the case of an annuity or support, the amount of the instalments and, where applicable, the annual Pension Index. The notice is filed with a copy of the judgment; it must be served on the debtor.
2731. Except in the case of the legal hypothec of the State or of a legal person established in the public interest, the court, on application of the owner of the property charged with a legal hypothec, may determine which property the hypothec may charge, reduce the number of the properties or give leave to the applicant to substitute other security for the hypothec sufficient to secure payment; it may thereupon order the registration of the legal hypothec to be cancelled.
2732. A creditor who has registered his legal hypothec preserves his right to follow it on movable property which is not alienated in the ordinary course of business of an enterprise, as though he were the holder of a conventional hypothec.
| Last Updated on Friday, 11 June 2010 08:01 |