Legal Construction Hypothecs, the Ideal Protection
This is a protective mechanism for individuals who have participated in a building’s construction or renovation. It ensures that workers will be paid the amounts they are owed for the work they have done.
These hypothecs protect architects, engineers, material suppliers, workers, contractors and subcontractors for the work and materials or services requested by building owners.
These hypothecs are automatically available for 30 days following the end of the work. This does not necessarily mean the end of your work, but the end of the work in general. As there is an existing jurisprudential debate on how to determine completion, do not wait too long and do not take any chances. We have had cases where there had been abandonment of work. This abandonment was considered as a completion, or the end of the work. Occasionally, there is still some minor work to do, but the building is ready for use. The work is therefore considered finished. If you are unsure about this, consult your lawyer.
After 30 days, the hypothec must be published in the Land Register. It outranks conventional mortgages, often even bank mortgages! Thus, in the event that the building is sold before you have been paid, the notary will make sure to pay you out of the proceeds of the sale.
The Publication of the Hypothec Is Paramount
However, to maintain this protection beyond the 30th day, it is important and essential for the hypothec to be published. Your lawyer can help you. Costs are relatively low and are definitely worth it as they serve to protect the payment of your invoice for your hard work! However, do not wait until day 29 day to inquire! Your lawyer may be unable to fulfill the order before the deadline.
Often, people do business with subcontractors or their services are retained by people who do not own the building. On such occasions, it is very important to investigate the situation before the work begins. If this situation applies to you, you must make sure that the property owner knows that you will be working on the building, how much it will cost, and you should also be able to prove it. The saying "Get it in writing" takes on its full meaning in this case. Although not compulsory, getting it in writing is a simple and effective measure. Thus, if you were hired by a third party, the owner will be able to ensure that you are paid, or face the consequences himself. This is a formality that your lawyer can help you with.
In the event of a new construction, make sure to check whether the building to be built has already been sold, and notify the owner accordingly.
An Ounce of Prevention Is Worth a Pound of Cure
For owners looking to protect themselves against any hypothecs that may add expenses to a building, if more than one person has worked or provided materials or services, make sure to ask your contractor for proof of payment and receipts from anyone he or she has hired, or take appropriate action. Again, your lawyer can save you many headaches in this regard.
While legal fees aren’t cheap, the costs you will incur for the above-mentioned protections will be much lower than what it will cost you to run after your money or break free from these hypothecs once they are published, depending on whether you have participated in the building’s construction or whether you are the owner.
As the saying goes, an ounce of prevention is worth a pound of cure. Do not hesitate to contact our office for a consultation.
We look forward to meeting you!
Me. Francine Danais
Our monthly publications allow us to bring a legal perspective on various and often delicate questions. We invite you to take a moment and read them (in French only).
December 2016: "Faillite d’un locataire commercial- MIEUX VAUT PRÉVENIR"
April 2017: “Congédiement d’un employé”
May 2017: “L’élaboration d’un contrat”