Legal hypothec in construction, what are your rights?

When you decide to take on a major construction or renovation job in your home or building any persons who participated have a legal hypothec in construction that guarantees payment for any work they have contributed in the event that something should go wrong. Governed by the Quebec’s Civil Code, building owners and anyone who participated in any work on said building have the right to be fully reimbursed for the services they provided, it is their right.

But what are these individuals’ real-world guarantees? What are their rights? Who exactly is involved when it comes to legal hypothec in construction?

Legal hypothec construction Sabbagh Associés photo of home with gravelWhat rights does a legal construction hypothec, give a person?

By definition, the legal construction hypothec is part of real estate law whose role is to guarantee the payment of debts to builders and renovators working on a building. In other words, this mortgage is a privilege granted to major players in the construction industry and homeowners because they are recognized as the engine of economic development.

According to article 2726 of the Civil Code of Québec:

2726 A legal hypothec in favour of the persons having taken part in the construction or renovation of an immovable may not charge any other immovable. It exists only in favour of the architect, engineer, supplier of materials, workman and contractor or subcontractor for the work requested by the owner of the immovable, or for the materials or services supplied or prepared by them for the work. It is not necessary to publish a legal hypothec for it to exist. 

Who is the legal hypothec in construction for and why?

In general, the first beneficiaries of this hypothec in construction are: the owner(s), the engineer(s), the worker(s), the architect(s), the material supplier(s) and the contractor(s). When a landlord receives a notice of legal hypothec, the latter can call real estate lawyer Mr. Paul Sabbagh of Sabbagh et Associés to protect it. On the other hand, the architect and the engineer cannot take advantage of this law without having a license from their respective professional order. As for the entrepreneur, only one who has a license from the Régie du Bâtiment can take advantage of it.

Lawyer specializing in real estate law writing legal contractWhy seek the help of a professional?

To protect yourself from fraud, it is necessary to understand the intricacies of construction law or better yet, to contact an expert lawyer in real estate law. The law firm of Sabbagh & Associates is able to assist you during the real estate security proceedings more commonly referred to as the legal hypothec. A lawyer specializing in real estate law deals with cases affecting people involved in the construction or renovation of housing. With years of experience, the firm represents all parties involved, be it the owner of the property(s), architect(s), engineer(s), material supplier(s), worker(s), contractor(s) or sub-contractor(s).

What are the jobs and materials covered by the mortgage?

The work

According to the Civil Code of Québec, only work that gives real added value to the building has the right to publish the hypothec. The list includes major renovations, expansion and construction. Thus, the legal construction hypothec is not intended for simple maintenance of the property that does not add value to the building. Indeed, the repair of a roof does not necessarily add value to the building. By cons, the addition of a solarium brings. Here, the capital gains caused by the works must give rise to an increase in the market value of the building.

The materials

Only the materials prepared and used for the realization of the works have the right of hypothec and can be published. Indeed, the added value must be visible with the integration of new materials that aim to increase the value of the property. We can expect the replacement of the linoleum by granite as important work. On the other hand, the change of the painting or the wallpaper are not part of the works eligible for a legal hypothec of construction.

These rules have been put in place so that the owner is the only person who can request work on his property, unless the contract has been denounced in writing. Therefore, an approach undertaken by a tenant of the building has no right to take advantage of the legal hypothec on the construction.

In most cases, using a lawyer specializing in real estate law, such as our firm Sabbagh and Associés is a preferred technique for obtaining legal information regarding everything that has to do with construction law. With ample experience in real estate law, our lawyers inform you about your rights and your obligations you have vis-à-vis the legal hypothec in construction.

Please note: This article does not constitute legal advice or legal opinion. It only serves to inform on certain aspects of the law. For more information on this subject manner, or any other legal questions related to real estate, please do not hesitate to contact our law firm today.