The construction legal hypothec and the notice of contract

The construction legal hypothec (often called a construction lien) lets those who took part in building or renovating a property secure their right to be paid by charging the property itself. It's a valuable protection — but one that's easily lost if you miss a deadline or a formality. As a general contractor, you must understand this mechanism from both sides: to protect your own payments, and to manage your subcontractors' notices toward your clients. This guide is informational; for a specific case, consult a lawyer.

What the construction legal hypothec is

When work adds value to a property, the law recognizes that those who supplied that labour or those materials have a legitimate interest in being paid. The construction legal hypothec secures their claim against the property, up to the added value the work created. In practice, if you aren't paid, this security can lead to the sale of the property to satisfy your claim.

It's a strong remedy, precisely because it affects the owner's asset. But it isn't automatic: it must be preserved and published according to the rules and deadlines. A right exercised improperly lapses, no matter how legitimate your invoice.

Who can claim it

Several parties on a project can benefit from the legal hypothec, provided they took part in building or renovating the property:

• The contractor who contracted with the owner.
• The subcontractors who performed part of the work.
• The material suppliers who provided materials for the work.
• The workers, as well as the architects and engineers who provided services for the work.

Key distinction: the party who contracted directly with the owner (often the general contractor) doesn't have to give notice of their contract. However, those who have no direct contractual link with the owner — typically subcontractors and suppliers — must give notice to preserve their right. That's where the notice of contract comes in.

The notice of contract: why and when

The notice of contract is a written notice by which a subcontractor or supplier informs the property owner that they're taking part in the work and for what amount. Its purpose: to make the owner aware of the claim so as to preserve the right to the legal hypothec even without a direct contract with them.

Without notice, a subcontractor risks losing their security: the owner could pay the general contractor in good faith, unaware that subcontractors haven't been paid. Notice given early (ideally before or at the start of the work, and before any payment to the owner) protects that claim. Do it in writing and keep proof of sending.

The critical deadlines you can't miss

The construction legal hypothec is governed by short, strict deadlines. As a general rule:

• The hypothec must be published (registered in the land register) within a set period following the end of the work — often measured in weeks, so act fast.
• A prior notice generally must be served on the owner.
• To preserve the hypothec, a legal action (or a registration, depending on the case) must be started within a period following the end of the work.

The "end of the work" is a tricky legal starting point to establish. Because the deadlines are short and their calculation depends on your specific situation, the golden rule is simple: the moment a payment drags, consult a lawyer without waiting. A few days' delay can be the difference between a secured claim and an ordinary one that's far harder to recover.

As a general contractor: managing both sides

The general contractor is at the center of it all. On one hand, if they contracted directly with the owner, they can themselves claim the legal hypothec for their own unpaid work. On the other, they must deal with their subcontractors' notices, which target their client's property.

A client who receives notices and discovers that subcontractors are claiming payment may withhold funds, demand proof of payment, or lose trust. To avoid this, manage your payments cleanly and with documentation: pay your subcontractors on time and obtain releases. It's your best protection against claims and legal hypothecs on your clients' projects.

Protecting yourself day to day: releases and good management

The best legal hypothec is the one you never need. A few habits sharply reduce the risk of non-payment and disputes:

1. Sign a clear written contract with each client and each subcontractor (work, price, schedule, payment terms).
2. Invoice quickly and collect progress deposits rather than waiting until the end.
3. Require a release from each subcontractor and supplier as you pay them, and keep it.
4. Document everything: purchase orders, change-order approvals, proof of delivery and payment.
5. At the first significant payment delay, consult a lawyer while the deadlines are still running.