The registration of a legal hypothec in the land register aims to protect the rights of individuals who have participated in the construction of a building. It guarantees:

• The cost of work, materials, or services provided;
• Accrued interest during the year in which the hypothecary recourse is undertaken and for the three preceding years;
• GST and QST;
• Incurred fees.

Legal hypothecs in favor of individuals who have participated in the construction or renovation of a property take precedence over any other registered hypothec, for the increase in value brought to the property. Among themselves, these hypothecs compete proportionally to the value of each claim. This extends not only to the construction of buildings but also protect demolition work. Maintenance, regular repairs, decoration, or improvements made to facilitate economic activities do not give rise to a legal hypothec due to the absence of added value to the property.

The architect, engineer, material supplier, worker, contractor, or subcontractor who participated in the construction or renovation of a property can register a legal hypothec on that property. However, urban planners, land surveyors, developers, and project managers cannot exercise this right. To maintain the right to register a legal hypothec, the contractor must hold an approved construction license at all times during the execution of the work and at the time of registering the hypothec notice. This requirement stems from Article 50 of the Building Act.

Legal hypothecs can be registered against all properties that have undergone work, except for those in the public domain. Work commissioned by the tenant does not give rise to a legal hypothec unless the landlord agrees, either within the lease or by separate agreement, to cover the cost of the work. The same applies if the tenant and the property owner are acting under separate identities but are, in fact, closely related businesses.

A legal hypothec in favor of individuals who have participated in the construction or renovation of a property continues if, within thirty days following the completion of the work (which is purely a matter of fact), a notice is registered designating the encumbered property and indicating the amount of the claim. However, strictly corrective work does not delay the completion of the work, unlike the non-completion of minor work. The date of occupancy by the owner does not necessarily mean the end of the work.

It is therefore important to consult a notary specialized in the drafting and registration of legal hypothecs because:

• they will conduct title searches to verify the identity of the property owner;
• they are specialists in contract drafting;
• they are required to hold liability insurance;
• they will complete the necessary documentation to ensure compliance with all requirements surrounding the drafting and registration of the legal hypothec.