Contractor's legal mortgage
Legal Mortgages for Craftsmen and Entrepreneurs - A Guarantee for Your Services
At Prestaflex, we support craftsmen and contractors by offering them solutions to secure their payment rights. The legal hypothec is a legal tool that enables you to guarantee payment for your work by registering a security interest in the building concerned. Here is a reformulated presentation of this essential mechanism, adapted to our approach:
1. What is a legal mortgage?
A hypothec is a pledge on a building to secure a debt. In practical terms, if the debt is not paid, the craftsman or contractor can sell the property to obtain priority payment. The special feature of the legal mortgage is that it is provided for by law: it arises automatically as soon as the legal conditions are met, without the need for a notarial contract.
2. Who can benefit?
The legal mortgage is reserved for independent professionals who, under a contract of enterprise, provide work and/or materials on a building. This includes construction companies, craftsmen (masons, painters, installers, etc.) and contractors. Dependent workers (salaried employees), architects and engineers are not eligible, as the law aims to protect those who directly add value to the building.
3. Registration procedures
For the legal mortgage to be effective, it must be entered in the Land Register on the page corresponding to the property concerned. This entry must be made within three months of completion of the work. This strict deadline ensures that only the actual completion of the work, which adds value to the property, is taken into account.
4. Application to subcontractors
Even if subcontractors do not contract directly with the owner, they too benefit from this right. Their registration is carried out via the main contractor, who must ensure that payments are secure to avoid the risk of double payment. This reinforces the protection of the professionals involved in creating the added value of the work.
5. Priority of payment and realization of the guarantee
The date of registration of the mortgage determines its priority. In the event of realization of the property (forced sale, for example), the claims of craftsmen and contractors are paid in equal shares, regardless of the date of registration. This system ensures that funds are distributed equitably and on a priority basis among all professionals involved in the work.
6. Securities and proof of claim
To avoid having to register a legal mortgage, the owner can provide security (bond, bank guarantee, etc.). In addition, it is essential that the craftsman or contractor provides proof of the reality of his claim, whether by acknowledgement from the owner, his authorization or, in the event of dispute, by a court decision.
The way forward
The legal mortgage is an indispensable protection mechanism for craftsmen and contractors, giving them priority of payment on the property to which they have contributed their know-how and materials. At Prestaflex, we put our expertise at your service to guide you through the implementation of this legal device, so that you can secure your rights and guarantee payment for your services with complete peace of mind.
Join us for personalized support to help you turn your projects into lasting successes.
An article by Munur Aslan, Director of PrestaFlex
