What does it mean to register a legal mortgage?
Registering a legal mortgage is a procedure by which a creditor secures its rights over real estate belonging to a debtor. This means that the creditor has a right of claim on the property in question, should the debtor fail to repay his debt. The legal mortgage is registered with the land registry. This process ensures transparency and legal certainty, guaranteeing creditors a means of recovering their claims in the event of default.
Who can register a legal hypothec
Legal Hypothec of Construction
A legal hypothec can be registered in favor of parties who have contributed to the construction or renovation of an immovable and who have not received payment for their work or the added value they have added to the immovable. According toarticle 2726 of the Civil Code of Québec (hereinafter C.c.Q.) [1], “[t]helegal hypothec in favour of persons who have participated in the construction or renovation of an immovable […] is acquired only in favor of architects, engineers, material suppliers, workmen [et] contractors or sub-contractors. “
Legal co-ownership mortgage
The syndicate of co-owners of a building can take out a legal hypothec to ensure the recovery of sums owed by co-owners. By registering this legal hypothec, the syndicate of co-owners protects itself and ensures that the necessary funds will be available to cover current expenses and provide for possible repairs or improvements to the building. Article 2729 C.c.Q. provides the rules to follow when taking out a legal hypothec of co-ownership.
How long does it take to register a legal mortgage?
Legal Hypothec of Construction
According toarticle 2727 C.c.Q., alegal hypothec in favour of persons having participated in the construction or renovation of an immovable subsists, even if it has not been published, for a period of 30 days following the completion of the work. However, to be valid, this legal hypothec resulting from construction must be taken in payment.
So, for example, if material suppliers want to take out a legal mortgage, they must serve it on the owner of the building and register it in the land register within 30 days of completion of the work. According to article 2727 al.2 C.c.Q., a notice of legal hypothec must therefore be issued. Don’t forget that it’s essential to respect these deadlines and to follow the procedure for taking payment in order to guarantee the validity and opposability of the legal construction mortgage.
Legal co-ownership mortgage
Article 2729 C.c.Q. provides that in the event of default by a co-owner, the syndicate of co-owners may exercise its right of legal hypothec on that part of the immovable which belongs to the co-owner who has been in default for more than 30 days.
In practice, this means that if a co-owner fails to pay his share of the common expenses for more than 30 days, the syndicate can register a legal hypothec on his fraction of the building to guarantee payment of the amounts due. It is important to note that the syndicate is obliged toinform each co-owner of the due date and the amount of his share.
Conclusion
In conclusion, the registration of a legal mortgage is of significant importance in various contexts. For construction professionals, this guarantees payment for services or materials supplied. For syndicates of co-owners, the registration of a legal hypothec ensures the recovery of sums owed by co-owners, providing financial security for current expenses and future projects. Registering a legal hypothec provides legal protection and transparency, enabling creditors to exercise their rights through a hypothecary recourse in the event of non-payment.
[1] Civil Code of Québec, RLRQ, c. CCQ-1991, (hereinafter “C.c.Q.”).
