When building contractors and certain other people do construction or renovation work on a building, they have an automatic mortgage on the building if they don't get paid. This mortgage is called a "hypothec". The hypothec is meant to guarantee that they'll be paid for their work and materials.
Who has rights on a building?
- the contractor and the workers hired by the contractor
- sub-contractors, suppliers, architects and engineers who did work or supplied materials on the worksite, provided that the person requesting the work was informed of what they were asked to do and the cost of their services
Here are some ways to ensure that people involved in the work get paid:
- Ask the contractor to give you proof that an insurer will pay any claims that the contractor fails to pay.
- Make payments by writing cheques payable to the contractor and to any suppliers who have informed you of the cost of the work they did.
For example, let's say that the contractor who renovates your kitchen for $20,000 bought cabinets for $6,000. The supplier told you about the purchase of the cabinets. When you pay by cheque, it would be a good idea to make one for $6,000 payable to the contractor and the supplier. Then the cheque can only be cashed with the consent of both the contractor and the supplier. This guarantees that the supplier will be paid.
Hold back part of payment for the work after the end of the work. Unpaid workers have 30 days to send you a notice after the end of the work. So if you don't get a notice in the 30 days, it is safe to pay the contractor. Get a written receipt from the contractor confirming that the contractor has been paid in full.
This article explains in a general way the law that applies in Quebec. This article is not a legal opinion or legal advice. To find out the specific rules for your situation, consult a lawyer or notary.