The legal hypothec or lien is a very powerful tool offered to contractors to guarantee that they will get paid for their work. On the day of the signing of the contract for construction work, renovations or the enlargement of an immovable (building), the amount equivalent to the work that you will undertake can be guaranteed by the registration of a legal hypothec on the immovable where the work will be performed. The covered amount is limited to the work that was indicated in the contract that will increase the value of the building.
If you deal directly with the owner, the right to a legal hypothec is based on the signed contract. If, however, you are a sub-contactor and do not have a direct contact with the owner, you will have to notify the owner about the contract between you and the general contractor. On this notice, you should write your name and contact information, as well as those of the general contractor and owner. You must also indicate the scope of your work and its cost, as well as a warning that a legal hypothec could eventually be placed on the property.
As a sub-contractor, it is recommended to report the existence of your contract prior to the beginning of the work. In order to conserve the legal hypothec, the person who has not been paid for his construction work/renovations must publish, in the 30 days following the end of the work, a notice of preservation of the legal hypothec at the registry office. At this point, you will need to get it attested by a notary or a lawyer. A copy of the notice should also be sent to the owner, either by registered mail or by bailiff. The end of the work means the complete end of the whole project, rather than the end of the part of what has been sub-contracted.
Once the work has been completed and if the notice of preservation has been sent, the legal hypothec remains for a period of six months. During this period, the contractor can send a notice of exercise to the owner. This notice, or warning, provides the owner 60 days to voluntarily give up the property. Following the expiry of this deadline, the contractor can take one of the four hypothecary recourses to obtain what he is owed.