Duhaime's Law Dictionary

Hypothec Definition:

A charge on property upon which an unpaid creditor may enforce payment of the debt.

Related Terms: Mortgage

The Quebec Civil Code chose the term, an awkward translation of the French hypothèque, to establish law as to mortgages and chattel mortgages.

In the official English language version of the Civil Code of France, 2009, at §2393, the French and civil law term hypothéque has been more properly translated into English as mortgage.

At §2660 and §2661 of the Quebec Civil Code, 2009 version:

"A hypothec is a real right on a movable or immovable property made liable for the performance of an obligation. It confers on the creditor the right to follow the property into whosoever hands it may be, to take possession of it or to take it in payment, or to sell it or cause it to be sold and, in that case, to have a preference upon the proceeds of the sale ranking as determined in this Code.

"A hypothec is merely an accessory right, and subsists only as long as the obligation whose performance it secures continues to exist."

In the common law, mortgages are often described as property rights but in the civil law, hypothecs are not property rights; instead, a hypothec in civil law is described as a legal interest, short of ownership, allowing an unpaid creditor who has secured his loan with a hypothec, to force the sale of the property. But this distinction is not unanimously held by the Quebec courts.


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