Legal AspectsChapter 2 · 35 practice questions

Chapter 2: Servitudes, Hypothecs and Charges

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Overview of Servitudes, Hypothecs, and Charges

This chapter addresses three distinct but related categories of encumbrances that can affect real property in Quebec: servitudes (real and personal), hypothecs (legal, judicial, and conventional), and charges (real charges). Each imposes a burden or obligation on an immovable, but they differ in nature, purpose, and legal effect. Understanding these concepts is essential for real estate agents and brokers, as they directly impact property rights, transferability, and valuation. The focus of this material is on the most commonly encountered type—real servitudes—alongside the essential characteristics of hypothecs and real charges.

Real Charges: Definition and Examples Real Charges: Definition and Examples An obligation imposed on an immovable to provide periodic prestations to a designated person (art. 1197 C.c.Q.) Characteristics • Created by published notarial deed • Periodic prestations • Sums of money or goods • Attached to the immovable • Follows the property upon sale Distinction Real charge ≠ Servitude Servitude: benefits a property Charge: benefits a person ✓ Publication in the Land Registry ✓ Enforceable against third parties Examples of Real Charges Maintenance of a private road The owner must contribute periodically to the maintenance of a road serving several properties. Annuity Periodic payment of a sum of money to a designated person, burdening the immovable. Portion of harvests Obligation to remit a portion of the fruits or harvests of the property to a designated beneficiary. Legal requirements and the role of the broker ✓ Must be created by notarial deed and published in the Land Registry to be enforceable against third parties (art. 2938 C.c.Q.) ✓ The broker must verify these charges during due diligence and disclose them to the buyer (art. 21-22 Regulation on conditions of practice)

Real Servitudes (Praedial Servitudes)

SERVITUDES, HYPOTHECS & CHARGES Real Estate Licensing Exam — Module QC-JUR SERVITUDES Real Servitudes Personal Servitudes • Attached to land • Runs with the land • E.g., right of way • Attached to person • Usufruct, use rights • Life tenancy Created by: contract, will, or prescription (10–30 years) HYPOTHECS Legal Conventional Judicial • Imposed by law • Contract-based • Court-ordered Priority: registration order (first in time, first in right) CHARGES Property Charges Personal Charges • Municipal taxes • School levies • Utility liens • Alimony • Child support • Court judgments Enforceable against property or person REGISTRATION & RANKING Land Registry Publication Ranking Enforcement KEY EXAM CONCEPTS ■ Servitudes = rights over another's property ■ Hypothecs = security for debt without dispossession ■ Charges = monetary obligations on property/person ■ Registration creates legal effect ■ Ranking determines priority ■ Extinguishment: sale, expiry, release QC-JUR | Real Estate Licensing Exam | Servitudes, Hypothecs & Charges

Definition and Legal Basis

Real Servitudes: Definition and Legal Basis Real Servitudes: Definition and Legal Basis (art. 1177 C.c.Q.) Legal Definition A charge imposed on an immovable → servient land (the one that bears the burden) For the benefit of another immovable → dominant land (the one that benefits) An accessory real right: follows the dominant land upon sale (art. 1177 C.c.Q.) Conditions of Validity ✓ Two distinct properties (separate and identified immovables) ✓ Different owners (no possible confusion) ✓ Benefit to the dominant land (benefits the immovable, not the person) ✓ Perpetual by default (unless a contrary clause in the deed) Illustration: relationship between the two properties SERVIENT LAND Burdened immovable Bears the burden Ex.: land with a right of way servitude DOMINANT LAND Beneficiary immovable Benefits from the burden Ex.: landlocked land with access Distinct Owners A ≠ B Essential condition (art. 1177 C.c.Q.) Key points: • Accessory real right — follows the dominant land • Indivisible — burdens the entire servient land • Methods: title, destination of the owner, prescription (10 years) • Verification: Land Register + location certificate

Under article 1177 of the Civil Code of Québec (C.c.Q.), a real servitude is a charge imposed on one immovable (the servient tenement) for the benefit of another immovable (the dominant tenement) belonging to a different owner. It is an accessory real right that runs with the land, meaning it attaches to the property itself, not to the owner personally. Key attributes:

  • Accessory nature: The servitude cannot exist independently; it is tied to the dominant tenement.
  • Indivisibility: The servitude cannot be partially extinguished or divided; it affects the whole of the servient tenement and benefits the whole of the dominant tenement.
  • Perpetuity: Unless otherwise stipulated in the constituting deed, a real servitude is perpetual (article 1177 C.c.Q.). It does not expire by mere passage of time.

Essential Conditions for Validity

For a real servitude to exist, three fundamental conditions must be met:

  1. Two distinct immovables: There must be a servient tenement (the property bearing the burden) and a dominant tenement (the property benefiting from the servitude).
  2. Different owners: The two properties must belong to different owners at the time the servitude is created. A person cannot have a servitude on their own immovable. This is the critical distinguishing feature from a personal servitude.
  3. Benefit to a tenement, not a person: The servitude exists to benefit the dominant tenement as such—not a specific individual owner. It attaches to the land and passes to successive owners.

Methods of Establishment

Article 1181 C.c.Q. lists three methods of constituting a real servitude:

MethodDescriptionCommonalityBy titleCreation by notarial deedpublished in the LandRegister. This is the mostcommon method in practice(article 1181 C.c.Q.).Most frequent in real estatetransactions.By destination of the owner(article 1183 C.c.Q.)Arises when two propertiesthat once belonged to the sameowner are divided, and thereare visible, permanentinstallations (e.g., adriveway, aqueduct) thatindicate an intendedservitude, provided the deedof division contains nocontrary clause.Less common but occurs insubdivisions.By acquisitive prescription(article 1182 C.c.Q.)Established by continuous,peaceful, open, anduninterrupted use for 10 years(or longer if the land isregistered under the landregistration system).Rare in modern practice; mostoften invoked forrights-of-way.

Default Duration

A real servitude is perpetual unless otherwise stated in the constituting deed. Parties may agree to a fixed term, condition subsequent, or other limitation. However, in the absence of such stipulation, the servitude lasts indefinitely and is not extinguished by the mere passage of time.

Terminology

Servitude Terminology Dominant tenement vs servient tenement — Servitude Terminology Art. 1177 C.c.Q. — A charge imposed on one immovable for the utility of another immovable 🏠 DOMINANT TENEMENT The immovable that BENEFITS from the servitude ✓ Receives an advantage (passage, view, non-construction, etc.) ✓ The right follows the land — transferred automatically to the buyer ✓ Owner distinct from the servient tenement (absolute validity condition) Art. 1177 C.c.Q. — The right follows the dominant tenement 🏢 SERVIENT TENEMENT The immovable that BEARS the imposed charge ✓ Bears a charge (e.g., allowing passage) ✓ The owner must tolerate or refrain from certain uses ✓ The charge encumbers the ENTIRE tenement (indivisibility — art. 1177 C.c.Q.) ✓ In case of division of the servient tenement, each lot remains subject to the servitude Art. 1177 C.c.Q. — The charge follows the servient tenement SERVITUDE ♾️ PERPETUAL BY DEFAULT — Art. 1177 C.c.Q. Unless otherwise stipulated in the constituting deed, a real servitude is perpetual and does not expire with the mere passage of time. Methods of establishment (art. 1181 C.c.Q.) 1. By deed Notarized deed published in the Land registry Most common method 2. Owner's destination Apparent and permanent signs No notarized deed required Art. 1183 C.c.Q. 3. Acquisitive prescription 10 years — peaceful, continuous, public, unequivocal possession Art. 1184 C.c.Q. — Rare in practice Real estate broker — Verify servitudes in the Land registry and the location certificate (less than 5 years) · Duty to inform (art. 21, 22 Regulation)
  • Dominant tenement: The immovable that benefits from the servitude.
  • Servient tenement: The immovable that bears the burden of the servitude.

Comparison with Personal Servitudes

Comparison with Personal Servitudes Comparison with Personal Servitudes Accessory real immovable rights — Civil Code of Québec (art. 1177 C.c.Q.) REAL SERVITUDE (land) Definition: Charge imposed on an immovable (servient land) for the utility of another immovable (dominant land). Essential characteristics: ✓ Two distinct lands, different owners ✓ Utility of the dominant land (passage, view, etc.) ✓ Perpetuity by default (art. 1177 C.c.Q.) ✓ Indivisibility — burdens the whole land ✓ Accessory nature — follows the dominant land Modes of establishment (art. 1181 C.c.Q.): 1. By title — notarial deed published 2. By destination of the owner (art. 1183) 3. By acquisitive prescription — 10 years (art. 1184) Ex.: right of way over the neighbour's land to access the street. PERSONAL SERVITUDE Definition: Real right granted to a person over another's immovable (usufruct, use, habitation). Essential characteristics: ✓ Granted to a person, not to a land ✓ Temporary by nature ✓ Generally extinguished upon the beneficiary's death ✓ Usufruct, use, habitation ✓ Does not follow the land — follows the person Types of personal rights: • Usufruct — right to use and enjoy • Use — limited right to use • Habitation — right to occupy the dwelling Ex.: right of habitation granted to an elderly person. ↔ vs The broker must check the Land Register and the certificate of location to identify servitudes (art. 21-22 Regulation on conditions of practice).

A personal servitude (e.g., usufruct, right of use, habitation) is established for the benefit of a specific person, not a tenement. It is therefore temporary (usually ending at the death of the beneficiary) and does not run with the land. Real servitudes, by contrast, are tied to the land and pass to successive owners of the dominant tenement.

Hypothecs

Definition

A hypothec (commonly "mortgage" in English, though distinct from common law mortgage) is a real right granted on an immovable to secure the performance of an obligation. It does not transfer possession of the property to the creditor but gives the creditor the right to have the property sold in payment if the debtor defaults (article 2660 C.c.Q.). Hypothecs are classified by their source:

  1. Conventional hypothec – Created by agreement between the parties, typically through a notarial deed published in the Land Register. This is the most common type used in financing real estate purchases.
  2. Legal hypothec – Arises by operation of law without agreement, for specific situations such as:
  • Construction workers (legal hypothec of construction)
  • The state for unpaid taxes (e.g., municipal taxes, school taxes)
  • Co-owners for unpaid common expenses
  1. Judicial hypothec – Results from a court judgment ordering payment of a sum of money; it must be registered to take effect.

Registration and Priority

Hypothecs: Registration and Priority HYPOTHECS: REGISTRATION AND PRIORITY Art. 2660 C.C.Q. — Accessory real immovable right guaranteeing the performance of an obligation DEFINITION • Accessory real immovable right • Encumbers the immovable WITHOUT dispossessing the owner • Guarantees the performance of an obligation (often a loan) • Accessory: follows the fate of the principal debt LEGAL REQUIREMENTS ✓ Notarial deed mandatory ✓ Registration in the Land Registry ✓ Specificity: precisely describe the immovable and the secured amount ✓ Without registration: unenforceable against third parties PRIORITY AMONG HYPOTHECS • Determined by the date of registration in the registry • Principle: "First registered, first served" • In case of forced sale: payment according to rank PRIORITY SCALE — ORDER OF PAYMENT IN CASE OF FORCED SALE RANK 1 — FIRST REGISTERED • Earliest registration date • Paid first RANK 2 — SECOND REGISTERED • Subsequent registration • Paid after rank 1 RANK 3 — THIRD REGISTERED • Even later registration • Paid last ORDINARY CREDITORS • Unsecured • Paid if a balance remains → → → ROLE OF THE REAL ESTATE BROKER — MANDATORY VERIFICATIONS ✓ Consult the Land Registry to identify registered hypothecs ✓ Verify the balance of the sale price ✓ Require a discharge for any existing hypothec ✓ Inform the buyer of ranks and priorities Source: Civil Code of Québec, art. 2660-2802 — Real estate broker training | Québec, Canada

All hypothecs must be published in the Land Register to be opposable to third parties. Priority among hypothecs is generally determined by the date of registration (first in time, first in right), subject to legal priorities such as the legal hypothec of construction.

Extinction

Hypothecs are extinguished by payment of the secured debt, by release or discharge (published in the Land Register), by prescription (10 years after the debt becomes due if no action taken), or by loss or destruction of the property.

Real Charges

Definition

A real charge is a charge imposed on an immovable that requires the owner to perform periodic prestations (e.g., payment of sums of money or delivery of goods) to a person designated in the constituting deed (article 1197 C.c.Q.). Unlike a servitude, a real charge does not primarily confer a use or benefit on another tenement; it creates an obligation that runs with the land.

Key Characteristics

  • Attaches to the land: The obligation passes to successive owners of the charged immovable.
  • Must be constituted by title: Creation requires a notarial deed published in the Land Register.
  • Duration: Usually perpetual unless otherwise stipulated, but may be subject to redemption (the owner can buy out the charge).

Common Examples

  • Charges for the maintenance of a private road or common area
  • Payment of an annual sum to a neighboring owner (e.g., a rent charge)
  • Obligation to provide a portion of crops or timber

Relationships Between Concepts

  • Servitudes vs. Hypothecs: Both are real rights burdening an immovable, but a servitude benefits another tenement, while a hypothec secures a debt. A hypothec may be granted over a servient tenement, but the existence of a servitude does not affect the hypothec's validity (the hypothec creditor takes the property subject to existing servitudes).
  • Servitudes vs. Real Charges: Both run with the land, but a servitude involves a use or forbearance (e.g., right of way, right of view), whereas a real charge imposes a positive obligation (e.g., to pay money). A real charge is closer in nature to a perpetual annuity attached to the land.
  • Hypothecs and Real Charges: Both are created by title and registered, but a hypothec is accessory to a personal obligation (the debt), while a real charge is a direct burden on the property that may exist without a parallel personal obligation.

Practical Implications for Real Estate Agents

Practical Implications for Real Estate Agents PRACTICAL IMPLICATIONS FOR THE BROKER MANDATORY DUE DILIGENCE VERIFY LAND REGISTRY (art. 2938 C.c.Q.) ✓ Complete title search ✓ Verify prior deeds of sale ✓ Consult location certificate ✓ Require update (less than 5 years) ✓ Verify registrations and discharges IDENTIFY CHARGES (servitudes, mortgages, others) ✓ Real servitudes (art. 1177) ✓ Personal servitudes (usufruct) ✓ Mortgages (art. 2660) ✓ Subdivision restrictions ✓ Pre-emptive rights DISTINGUISH REAL / PERSONAL (impact on rights and obligations) ✓ Real: follows the dominant land ✓ Personal: follows the person ✓ Real: perpetual by default ✓ Personal: temporary ✓ Verify indivisibility (art. 1177) INFORM THE BUYER OF RIGHTS AND OBLIGATIONS (duty to inform — art. 21 and 22 of the Regulation) BROKER RESPONSIBILITIES ✓ Disclose any known or apparent charge → otherwise civil or disciplinary liability ✓ In case of doubt → recommend legal advice (Code of Ethics)
  • Disclosure obligations: Agents must inform buyers of any existing servitudes, hypothecs, or real charges affecting a property. Failure to do so may lead to professional liability.
  • Due diligence: Always check the Land Register for registered encumbrances before presenting an offer or advising a client.
  • Negotiation: The presence of a servitude (e.g., right of way) can affect property value and use. A hypothec must be discharged (or assumed) upon sale. Real charges may require ongoing payments—clarify with the buyer.
  • Legal advice: Complex encumbrances, especially servitudes by destination or legal hypothecs, should be reviewed by a notary or lawyer before finalizing a transaction.

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