Until now, a movable hypothec without delivery could only be granted in Quebec by a legal person or by a physical person carrying on an enterprise. An individual can now grant a movable hypothec without delivery on certain of his/her movable property and on rights and indemnities arising from insurance, both present and future, covering that property.
On what property can an individual grant a movable hypothec without delivery?
a road vehicle*
a caravan or a fifth-wheel
a mobile home
a personal watercraft
*A road vehicle means: a passenger vehicle - a motorcycle - a motor home - a snowmobile of a model year subsequent to 1988 - a motorized all-terrain vehicle equipped with handlebars and at least two wheels, that is designed to be straddled and whose net weight does not exceed 600 kilograms.
Effect against third parties of a movable hypothec without delivery
The effect against third parties operates from the date of publication in the register of personal and movable real rights ("RDPRM") as with any other hypothec (Articles 2941 and 2945 C.C.Q.).
Exercise Of The Hypothecary Rights Of The Creditor
The usual rules pertaining to the exercise of hypothecary rights apply to the movable hypothec without delivery granted by an individual. However, the delay required for the prior notice of the exercise of a hypothecary right is thirty (30) days (instead of the usual twenty (20) days) if the hypothec relates to a consumer contract.
Benefits To The Creditor
This legislative change offers a new alternative to creditors in order to secure a loan pertaining to movable property on which an individual may now grant a movable hypothec without delivery. The hypothec gives the creditor the right to follow the property, and thus allows the creditor to exercise its rights against any subsequent purchaser. In addition, the creditor, as a secured creditor, will be further protected should the debtor become insolvent.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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