This article outlines several basic key concepts of construction hypothecs.

A contractor, sub-contractor, architect, engineer, or workman can, if they remain unpaid, publish a construction hypothec on the immovable on which they worked, whether for its construction or renovation. This right is also granted to the material supplier.

• In order to be entitled to a construction hypothec, the creditor must have taken part in the construction or renovation work on the immovable and said work must bring an added value to the immovable (regular maintenance or repair work do not give rise to this right).
• Only said added value (generally the value of the work and materials provided) will be guaranteed by a construction hypothec.
• A construction hypothec will rank above all other published hypothecs on the immovable.
• If the contract is not granted to him directly from the immovable’s owner, the contractor or supplier of materials must inform (denounce) the immovable’s owner of his contract in writing before executing it, and only the work performed, or materials supplied after such written notice of the contract to the owner may be subject to a construction hypothec.
• An unpaid contractor or supplier has up to 30 days from the end of the work to publish his construction hypothec. This is the mandatory time period for publication and any construction hypothec published after this period will be invalid. The “end of the work” refers to the end of the all the work planned for the site for this project.
• The fact that the immovable is subsequently sold to a third party or that the immovable’s owner goes bankrupt does not impact a right to a construction hypothec, provided the creditor entitled to said right published it within the period stipulated in the law.
• To protect themselves against construction hypothecs, buyers and/or hypothecary creditors can subscribe to title insurance.

While appearing simple, the rules regarding construction hypothecs are numerous and can be complex, not to mention the various time periods within which one must act. The help of a lawyer specializing in the field of real estate and construction law is essential to clearly understand the law and to act accordingly.

More from this author by clicking on his photo below.