Depending on whether you are a person or a company wishing to enter into a contract for a movable hypothec without delivery or, rather, whether you are a person or a company already party to a contract for a movable hypothec without delivery, but who is facing in difficulty, we’re here to help!
Thus, even if many questions can be resolved using the guides, sample letters and forms that you can consult in our legal toolkit, an independent lawyer affiliated with PSP Legal will always be happy to help you. answering
Of course, if you prefer a seasoned practitioner to take charge of your situation and intervene directly and quickly on your behalf, you can also request that one of the independent lawyers affiliated with PSP Legal represent you in clicking here.
What is a movable hypothec without delivery?
A mortgage without delivery is the constitution of a mortgage on movable property by a debtor, without having to remit it to his creditor.
A movable hypothec without delivery can relate to various tangible and intangible assets. This type of mortgage does not involve the delivery of the mortgaged property to the creditor.
When granted by a company, this type of mortgage can relate to a universality of goods. In this case, the mortgage could relate to the company’s inventory, professional tools and equipment, as well as the goodwill of the company. The movable hypothec without delivery can also be taken by natural persons, however they will be limited in their capacity. In fact, natural persons can only grant a movable hypothec without dispossession on the goods listed by the legislator. Here are a few :
- Road vehicles provided with an identification number;
- Precious goods within the meaning of Tax Act ;
- Securities and intermediated securities within the meaning of Securities Act ;
- Assets that constitute an investment within the meaning of Securities Act.
The movable hypothec without delivery
The mortgage without delivery is constituted in writing, either by private deed or by notarial deed. Once constituted, it must be registered with the Register of personal and movable real rights and contain a sufficient and detailed description of the property which is the subject of it, all in accordance with Article 2697 of Civil Code of Quebec.
In addition, its registration in the Register will make it enforceable against third parties and creditors. Certain errors during the registration of the movable hypothec without delivery in the Register could prove fatal and render it unenforceable. However, these errors will not affect the validity of the mortgage between the creditor and the debtor.
As an example, here are the errors that can be fatal:
- Error in the name of a company which consists of numbers;
- Spelling error in the name of a natural person;
- Insufficient description of the property.
Mortgage relating to securities and intermediated securities
Companies as well as natural persons who do not carry on a business can take out a movable hypothec without dispossession on securities and intermediated securities. However, certain intermediated securities are not eligible for a movable hypothec without delivery:
- Property constituting a Registered Retirement Savings Plan;
- Registered retirement income fund;
- Registered education savings plan;
- Registered disability savings plan within the meaning of Tax Act;
Le rang
The movable hypothec without delivery takes precedence according to the date, hour and minute of its registration in the Register of personal and movable real rights. However, in the case of a mortgage encumbering property represented by a bill of lading or other negotiable instrument, it will be enforceable against third parties and other creditors from the day on which the creditor has performed its performance provided that the mortgage has been registered within 10 days.
Our legal toolkit includes a variety of online resources and hyperlinks to templates and guides, helping you better understand your obligations.
However, while it can be very useful to you, if the legal toolkit proves insufficient for your situation, you can get additional assistance by speaking with one of the lawyers affiliated with PSP Legal:
Of course, if you prefer a seasoned practitioner to take charge of your situation, you can ask at any time that one of the independent lawyers affiliated with PSP Legal intervene on your behalf. clicking here. The latter can then intervene directly and quickly on your behalf by:
- Preparing, negotiating and drafting requests, procedures or any other document of a legal nature related to your situation;
- Assisting and advising you on your legal rights and obligations;
- Representing you before the courts when appeals are brought;
- Guiding you on the choices available to you that will lead you to a fair and satisfactory solution.
PSP Legal, because you are entitled to expert advice!
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