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The legal hypothec of the syndicate of co-owners registered for the payment of common expenses (hereinafter “legal hypothec of the syndicate of co-owners”) is a legal action that allows the syndicate’s representatives to use the fraction of a co-owner as security for the payment of common expenses.
When a co-owner is found to be in default of payment of common charges, the first step is to draft a formal notice letter and send it to the person in default. In fact, a formal notice is a necessary step in notifying the debtor that he is in default and not respecting his contractual obligations related to the co-ownership. Moreover, the co-owner may already be in default as of right. The notion of formal notice by operation of law is defined inarticle 1597 of the Civil Code of Québec :
1597. The debtor is in default ipso jure, by operation of law alone, when the obligation could only be usefully performed within a certain period of time, which he has allowed to elapse, or when he has failed to perform it immediately despite the urgency of the situation.
He is also in default by operation of law when he has failed to perform an obligation not to do, or when he has, through his fault, made it impossible to perform the obligation in kind; he is also in default when he has clearly manifested to the creditor his intention not to perform the obligation or, in the case of an obligation to be performed successively, when he repeatedly refuses or neglects to perform it.
Source: Civil Code of Québec, RLRQ c CCQ-1991, art 1597
The legislator defines the notion of formal notice in articles 1594 and 1595 of the Civil Code of Québec :
1594. The debtor can be put on notice to perform the obligation by the very terms of the contract, when it is stipulated that the mere passage of time for performance will have this effect.
He may also be placed in default by an extrajudicial request from his creditor to perform the obligation, by a legal action brought against him or, again, by operation of law alone.
1595. The extrajudicial request by which the creditor puts the debtor in default must be made in writing.
It must allow the debtor sufficient time to perform, having regard to the nature of the obligation and the circumstances; otherwise, the debtor can always perform within a reasonable time of the request.
Source: Civil Code of Quebec, RLRQ c CCQ-1991, art 1594 and 1595
In this sense, a formal notice is a written letter stating the debtor’s failure to meet his contractual obligations. A demand letter is considered an out-of-court settlement process.
For this purpose, a formal notice exists when the debtor fails to pay the sums due. The purpose of this letter is to advise the debtor, in good faith, that payment must be made within a reasonable time. The letter will advise the latter that in the event the defect is not resolved within the allotted time, legal proceedings will be initiated without further notice or delay. The demand letter also contains the amount due, plus interest if applicable.
In the case of the legal hypothec of the syndicate of co-ownership (hereinafter referred to as the ” Syndicate “), it is the Syndicate or any person duly authorized by it who must send the demand letter to the defaulting co-owner.
Given that the formal notice is the first formality available to the Syndicat to recover debts owed, it must be sent as soon as non-compliance with the obligations
is brought to the attention of the Syndicat. Indeed, the sooner the Syndicat acts to send the letter of formal notice, the faster the dispute can be settled. In this sense, there are no specific rules as to when the letter of formal notice should be sent, apart from the fact that a letter of formal notice must be sent before legal proceedings are initiated.
It is important to note, however, that the Syndicat has a maximum of three (3) years from the date of assessment to recover a common charge in accordance witharticle 2925 of the Civil Code of Québec :
2925. An action to enforce a personal right or a movable real right for which the limitation period is not otherwise fixed is time-barred after three years.
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