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A surrender is the consequence of the debtor’s default on payments. Indeed, the final step of a legal hypothec is a judgment of forced surrender. Once the formal notice has been sent, the notice of a legal hypothec duly published in the land register, the prior notice to exercise a legal hypothecary right has been delivered and the sixty (60) day period has expired, the defaulting debtor shall surrender the immovable and the creditor will exercise his hypothecary right.
In summary, surrender means that the debtor surrenders his immovable as payment to the creditor. A surrender may be voluntary or forced, depending on the case:
2763. Surrender is voluntary or forced.
Source: Civil Code of Québec, CQLR c CCQ-1991, a. 2763
A voluntary surrender is when the owner of the immovable decides to abandon his property to the creditor without any objection.
2764. Surrender is voluntary where, before the period indicated in the prior notice expires, the person against whom the hypothecary right is exercised abandons the property to the creditor in order that the creditor may take possession of it or consents in writing to turn it over to the creditor at an agreed time.
If the hypothecary right exercised is taking in payment, voluntary surrender shall be recorded in an act made by the person surrendering the property and accepted by the creditor.
Source: Civil Code of Québec, CQLR c CCQ-1991, a. 2764
A forced surrender is when the owner refuses to surrender voluntarily the mortgaged property to the creditor.
2765. Surrender is forced where the court orders it after ascertaining the existence of the claim, the debtor’s default, the refusal to surrender voluntarily and the absence of a valid cause for objection.
The judgment fixes the period within which surrender shall be effected, determines the manner of effecting it and designates the person in whose favour it is carried out.
Source: Civil Code of Québec, CQLR c CCQ-1991, a. 2765
The surrender of the immovable is made by the owner of the property, that is, the person defaulting on payments. If the owner refuses to cooperate, the court may order a forced surrender of the property.
The Quebec legislature provides a period within which the person in default must surrender voluntarily the mortgaged property. Article 2758 of the Civil Code of Québec provides this strict deadline:
2758. A prior notice of the exercise of a hypothecary right must disclose any failure by the debtor to perform his obligations, and contain a reminder, where applicable, that the debtor or a third person has the right to remedy the default. It must also disclose the amount of the claim in capital, and in interest, if any, and the nature of the hypothecary right which the creditor intends to exercise, furnish a description of the charged property, and demand from the person against whom the hypothecary right is to be exercised that he surrender the property before the expiry of the period specified in the notice.
That period is 20 days after registration of the notice in the case of movable property, 60 days in the case of immovable property, or 10 days if the creditor intends to take possession of the property; however, the period is 30 days in the case of a notice relating to movable property charged with a hypothec constituted by an act accessory to a consumer contract.
In such a case as immovable property, the deadline is sixty (60) days.
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