Construction Legal Hypothec: Unpaid Work Can Encumber the Home You Are Buying

This is the least understood title risk in a purchase, and it comes from neither the seller nor you: it comes from a third party you have never met. The article carries the mechanism and the concrete checks; it gives no deadline or amount, for the reason set out at the end. On the form where the signal appears, see our guide to the OACIQ seller's declaration.

A claim that follows the building, not the person

The law grants a security to those who took part in constructing or renovating a building and were not paid: architect, engineer, contractor, subcontractor, worker, supplier of materials.

That security arises from no contract with the current owner and does not depend on their consent. It is registered in the land register against the building, up to the added value the work brought to it. That is the whole difference from an ordinary debt: it is not the person who owes, it is the property that answers.

One logical consequence follows, and it surprises everyone: the claim survives a change of owner. It is not extinguished because the building was sold, nor because the new owner did not know it existed.

Why it reaches a buyer who ordered nothing

The typical scenario is nothing exotic. A seller has their kitchen renovated the year before selling. They pay their general contractor in full, and they have the paid invoice to prove it. Then they sell.

Except the general contractor did not pay their plumber, or their cabinet supplier. That unpaid subcontractor has no contractual link with the seller, and even less with the buyer. They nonetheless hold a claim against the building they improved.

So the buyer discovers a registration arising from an invoice they never contracted, between two parties they never met. And the seller, for their part, acted in good faith: they paid what they owed, to whom they owed it.

That is what makes this subject actionable rather than theoretical. Nobody behaved badly, and the risk exists anyway. It is not settled by trust between the parties: it is settled by a search and by a document.

What the land register shows, and its blind spot

Quebec's land register index lists the registrations published against a lot: hypothecs, servitudes, notices, prior notices. A legal hypothec already registered appears there, with its date and its creditor.

An important methodological point: the search is done on the lot, not on the seller's name. A charge follows the building, so it is the building you query. This is also the work your notary does for your transaction, but nothing prevents consulting the index earlier, as soon as the lot number is known.

And here is the blind spot, worth naming rather than letting it pass for a guarantee: a claim that exists but has not yet been registered does not show. A clean register on the date of consultation is therefore not proof that no claim is sitting somewhere. It proves that none is published on that date, which is not the same thing.

Reading the register must therefore be completed by the seller's declaration, which is the only place where the existence of recent work appears before any registration is published.

The two boxes on the seller's declaration, read together

The first is the section covering hypothecs and charges affecting the property, D2.8 on the form. A registration known to the seller must be declared there. It is the obvious box, and it is not enough: a seller who genuinely does not know a subcontractor is unpaid has nothing to enter.

The second is the section covering major work carried out, D14.4. It is filled in even where no registration exists, since it describes renovations rather than charges.

The real signal is the combination, and it is the one thing to take from this section: recent major work declared at D14.4, with no releases on file, warrants a check — whatever D2.8 says. An empty D2.8 does not say there is no risk; it says the seller knows of no registration.

Section numbering can vary with the version of the form in use. Locate them by their content as much as by their number: the one for hypothecs and charges, and the one for major work.

The three things a buyer can require before signing

The first, and the most poorly worded in practice: the releases from the parties involved, not the general contractor's paid invoice. The distinction is exactly the scenario above. A paid invoice proves the seller paid their contractor; it proves nothing about the subcontractors, who are precisely the ones who register.

The second: the list of parties who worked on the project. Without it, you do not know which releases should exist, and therefore cannot know which one is missing.

The third, where the file stays incomplete: a holdback of funds at the notary until the risk lapses. It is a contractual solution, negotiated and written, that allows a closing to proceed without one party carrying the risk alone.

These three requests belong in the promise to purchase, as conditions, rather than being asked on trust after acceptance. They are routine, and they are not a mark of distrust toward the seller: they protect the buyer from a third party, not from the seller.

Why this article gives no deadline or amount

No registration deadline, no preservation deadline, no amount, no added-value threshold. This is not an omission, it is the same decision as in our other procedural articles.

Those values come from the Civil Code and from procedure, and we have no citable primary source to publish here for them. On this subject specifically, an inaccurate deadline does not produce imprecision: it causes a remedy to be lost, or it falsely reassures a buyer who believed they were outside the window.

They are confirmed with your notary, who searches the register for your transaction and knows the applicable formalities, or with a lawyer if a registration already exists. What this article gives you is what does not change: the nature of the claim, the two places the signal appears before closing, and the three documents to require.

The checks, in order

First the seller's declaration, the major work section. It tells you whether there is anything to look for, and it is available before any expense.

Then the land register index, on the lot. If it already carries a registration, the conversation changes in nature and legal advice becomes necessary before going further.

Finally, if recent work is declared and the register is silent, the releases and the list of parties, requested through the promise. The order is what matters: starting with the register alone gives false assurance, and demanding releases without knowing whether work took place wastes both parties' time.