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Law 2 Final > Module 2 > Flashcards

Module 2 Flashcards

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1
Q

Prior claim definition

A

Per the law

Creditor has right to be preferred over other creditors even hypothecary creditors

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2
Q

Prior claim characteristics

A
  • Don’t need to be Published to be enforceable to third parties
  • rank according to their order amongst themselves
  • rank before movable or immovable hypothecs regardless of dates
  • real right
  • no right to follow (ie follows Person not property)
  • cAn verify in land registry
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3
Q

1st ranking prior claim

A

legal costs and all expenses incurred in the common interest (creditor)

Enforced on movable and immovables

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4
Q

2nd ranking prior claim

A

Unpaid vendor
For the price of a movable sold to a natural person
Not available if movable is for a business

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5
Q

3rd ranking prior claim

A

Claims of persons having the right to retain movable property until debt is paid
Ie an unpaid mechanic who keeps the car he repaired

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6
Q

4th ranking prior claim

A

Claims of state (Quebec)
Amounts due under fiscal law (income tax)
Applies to movables (bank accounts and car if not leased ie owned by someone else)

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7
Q

5th ranking prior claim

A

Municipal and school board claims for property tax

Applies to immovables only
Follows immovables

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8
Q

Nature of hypothecs

A
  • Permanent Real right on immovable or movable (collateral)
  • right to follow regardless of who owns
  • indivisible (everything on property)
  • opposable to third parties if published in relevant register and surety allows creditors to have preference over proceeds before ordinary creditors
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9
Q

Definition of legal hypothecs

A

Imposed by law

Creditors with legal hypothecs

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10
Q

Definition of conventional hypothecs

A

Agreement between Lender and borrower

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11
Q

Definition of movable hypothecs (since 1994)

A

Movable property charged with a hypothec either with or without delivery
Ie equipment remitted (delivered/pledged) to the creditor as a guarantee or without delivery meaning a property is given in guarantee but kept at the same time (register of personal and movable real rights)

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12
Q

Definition of immovable hypothecs

A

Immovable property is charged with a hypothec ie guarantee to the creditor

  • notorial act in minutes
  • Published in land registry
  • conventional
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13
Q

Types of legal hypothecs

1. Claims of the state

A
  1. Claims of state for sums due under fiscal law charged on movable (register of personal and movable real rights) or immovables (land register) from the date of registration
    Incl hydro and income tax
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14
Q

Types of legal hypothecs

2. Claims of persons who constructed or renovated an immovable

A
  • Only the immovable is charged with the legal hypothec
  • does not need to be registered
  • subsists for 30 days after work done
  • before 30 days, creditor can serve debtor with a notice (if unpaid) and register it
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15
Q

Types of legal hypothecs

3. Claim of syndicate of co-owners

A
  • For unpaid common expenses or contingency fund if over 30 days late
  • registered at land registry indicating nature of claim and amount payable on day of claim
  • can cover claims for current year and following 2 years plus legal costs (bailiffs)
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16
Q

Types of legal hypothecs

4. Claims under judgement

A
  • rendered by a court with jurisdiction in Quebec
  • awards a sum of money
  • charged on movable or immovable
  • register a notice describing the charged property and amount of obligation (good for 10 years)
  • notice filed with copy of judgement and proof it was served to the debtor
17
Q

Order of importance of creditors against immovables (4)

A
  1. Prior creditors (2 of 5 affect immovables)
    - Legal costs & all expenses incurred in the common interest
    - claims of municipalities & school board for property taxes
  2. Hypothecary creditors
    - Claims of persons who constructed or renovated an immovable
  3. Legal hypothecs & other hypothecary creditors
    - legal hypothecs and conventional immovable hypothecs rank based on date of registration
  4. Ordinary creditors
    - In proportion to their claim
18
Q

Exercise of hypothecary rights - general provisions

A

Creditor can exercise a personal recourse OR exercise his hypothecary rights (ranked according to date registered and regardless of who owns the property with the exception of construction creditors)

19
Q

Preliminary measures of exercising hypothecary rights

A
  1. Creditor must register a PRIOR NOTICE at the registry office with proof that it was served to the debtor
    60 days for immovables
    20 days for movables
    10 days for possession admin purpose
  2. Surrender
    -Voluntary - owner abandons the property to the creditor or consents in writing
    -Forced - court ordered
20
Q

Hypothecary recourses (4)

A
  1. Take possession for admin purposes (full admin) administrate the property, use profit to reimburse himself the creditor
  2. Take in payment
    Extinguishes debtor’s obligation
    Taking property as is at time of registration AND free of all hypotechs published after his
    -if more than 50% has been paid off, creditor needs court issued authorization before taking in pmnt
    (2nd ranking creditor should opt for option 3 or 4)
  3. Sale by creditor
    Proceed after surrender of property by sale by agreement,call for tenders or by public auction
  4. Sale by judicial authority (most popular)
    Court designates a person who will sell it and sets the conditions and charges of the sale and specifies a sale by agreement, call for tenders or public auction
    -purges all prior claims
    -if proceeds are insufficient, the creditor still has personal recourse or if in excess, they’re remitted to the debtor
21
Q

Extinction of hypothecs (5)

A 
1. Movables 
10 years after registration 
By loss or expropriation of property
Paid off 
2. Immovables
30 years after registration 
By loss or expropriation of property 
Paid off
3. Release
4. Main levee 
Lifting after full payment, private act, formal document signed by creditor and registered in index of immovables
5. Radiation
Cancellation quittance, debtor is released the moment its registered
22
Q

Types of legal hypothecs

A
  1. Claims of the state
  2. Claims of persons who constructed or renovated immovable
  3. Claims of syndicate co-owners
  4. Claims under judgement

Law 2 Final (3 decks)

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