Definition : Legal hypothec - Legal hypothec of construction

Certains copropriétaires expérimentent l'hypothèque légale de la construction. Elle signifie qu'après avoir acheté l'appartement convoité, ils devront assumer les honoraires des sous-traitants que le constructeur n'a pas payé.

23 septembre 2019 — Les avis d’hypothèque légale de la construction ont enregistré une hausse de 9 % en 2018. Cette augmentation serait surtout attribuable à une forte activité dans le secteur de la construction. Selon les données de la SCHL, il y avait 10 % plus de propriétés résidentielles en construction en 2018 qu’en 2017, et 33 % plus qu’en 2016.

You move into your new condo. A few weeks later, a bailiff knocks on your door and serves upon you a notice of preservation of a legal hypothec of construction. He also served all your neighbors. Reading this document, you learn that a dispute remains unresolved between the contractor and a supplier (or subcontractor), concerning work performed or materials furnished that have not been paid by the contractor.  

The intervention of the notary is very important when purchasing an apartment in a divided co-ownership. A professional, member of the “Chambre des notaires du Québec” (Québec Chamber of Notaries), he is also a public officer. As such, the notary has without limitation the mission of executing deeds to which the parties wish or are required to endow with authenticity (such as  a declaration of co-ownership). Even though it is preferable that he should get involved at the outset of a transaction, this legal adviser usually gets involved  after the signing of the offer to purchase or of the preliminary contract. The notary, in his capacity of public officer: Warrants the validity of the deed of sale; Is bound to act objectively and to give legal advice to all the parties (equally to the purchaser and the vendor); Is bound to a duty of information to the parties, which means he should give the parties relevant advice and information in relation with the deeds signed before him.

When you purchase an apartment in a recently built co-ownership, a portion, if not all the private portions of the immovable, can be encumbered by a prior notice of a legal hypothec in favor of persons having taken part in the construction. As a purchaser, you will be compelled to pay the debts of the developer, if he is in default of paying its construction creditors? If so, how will the amounts claimed be allocated between the co-owners? And what happens if they refuse to pay?