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Are you an entrepreneur, worker, contractor, supplier of materials, architect or engineer? Did you know that the law protects you against some bad debts?

With spring approaching at a fast pace, David, a contractor, is happy to return to work.

Last summer, David had begun a project to renovate John’s basement. Only plumbing and finishing touches in the basement and the garage were remaining. David finished those, and submitted to John a bill for $18,000.

John failed to pay the invoice for $18,000 within 15 days of receipt.

Did you know that David has a legal construction hypothec (mortgage) on John’s property? Indeed, those who participate in the construction or renovation of a building have a legal hypothec on the property on which they perform the work. The hypothec exists automatically by law, but it must be published within 30 days after the work has been completed.

In order to continue to benefit from this legal mortgage during the 30 days following the end of the work, David will have to:

  • Register a notice describing the immovable that is the object of the mortgage
  • Indicate the amount of the debt due
  • Give notice to the owner of the building

The legal construction hypothec expires six months after the work is completed.
However, there are two ways for David to keep the legal mortgage beyond the period of six months provided by law:

  • Publish an action against John, or
  • Register a notice about the exercise of a mortgage right

The legal construction hypothec is a powerful weapon available to persons active in the construction field, the purpose of which is to ensure the payment of receivables. Interested parties have every reason to familiarise themselves with this valuable tool granted by the Civil Code of Québec.

For more information, please contact us at (514) 326-4553 or toll free at 1-855-505-1515 or by email at info@brunetassocies.com

Text written by Me Michelle Merhi,
Lawyer at Brunet & Associates