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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.
Once the legal hypothec of the syndicate of co-ownership is published, if the debtor remains in default of his obligations, the second step in the legal process will be to send a notice of hypothecary recourse. Briefly, this notice will advise the individual in default that if he or she does not cooperate and respect his or her contractual obligations, a mortgage remedy will be instituted. To this end, mortgage recourse entails serious consequences, such as the sale of control under court order, or the taking in payment of the fraction of the co-owner in default.
The Syndicat des copropriétaires (hereinafter ” Syndicat “) is mandated to send the notice of exercise of the hypothecary recourse. A person duly authorized by him may also take care of it.
The Syndicat has three years in which to send the notice of mortgage recourse. Underarticle 3061, paragraph 2 of the Civil Code of Québec, the registration of the legal hypothec of the syndicate of co-ownership expires after three years. The notice of mortgage recourse must therefore have been sent before the end of this three-year period:
3061, para. 2. The registration of the legal hypothec of the syndicate of co-owners on the fraction of a co-ownership is cancelled, at the request of any interested party, upon expiry of three years from its date, unless an action has been previously instituted and published.
Source: Civil Code of Quebec, RLRQ c CCQ-1991, art. 3061, para. 2
The legislator has set out certain terms and conditions regarding the notice period for exercising a hypothecary recourse. More specifically,article 2757 of the Civil Code of Québec provides for this right:
2757. A creditor intending to exercise a hypothecary right must file a notice with the registry office, accompanied by proof of service on the debtor and, where applicable, the grantor, as well as any other person against whom he intends to exercise his right.
The registration of this notice is terminated in accordance with the book De la publicité des droits.
In this sense, the Syndicat must send the notice to the Bureau de la publicité des droits and meet the conditions ofarticle 2757 of the Civil Code of Québec to ensure the conformity of the notice. He must also be sure to send the notice to the defaulting co-owner, advising him of the proceedings against him.
In addition, the notice must precisely state the co-owner’s default and the amount owed with interest. In the notice, the Syndicat must clearly state to the co-owner that if he does not pay the sums due, he will have to relinquish the property:
2758, para. 1. 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.
Source: Civil Code of Quebec, RLRQ c CCQ-1991, art. 2758, para.1
When the notice of mortgage recourse is sent out, a period of 60 days is required to give the defaulting party time to remedy the situation. As mentioned in article 2761 of the Civil Code of Québec, the co-owner may remedy his default at any time during the 60-day period:
2761. A debtor or a person against whom a hypothecary right is exercised, or any other interested person, may defeat exercise of the right by paying the creditor the amount owing to him or by remedying the omission or breach set forth in the prior notice and any subsequent omission or breach, and, in either case, by paying the costs incurred.
He may exercise this right until the property has been taken in payment or sold, if the right exercised is the taking of possession, at any time.
Once the time limit has elapsed, and in the event of inaction on the part of the debtor, possession will take effect.
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