A couple in Montréal is arranging a hypothec with their financial institution for the purchase of their first home. They are informed that their hypothec must be in the form of a 'notarial deed'. What is the primary characteristic and implication of a notarial hypothec in Québec?

Question: A couple in Montréal is arranging a hypothec with their financial institution for the purchase of their first home. They are informed that their hypothec must be in the form of a 'notarial deed'. What is the primary characteristic and implication of a notarial hypothec in Québec?

Answer options: ✅ It is executed before a notary, making it an authentic act, and can have executory force, potentially simplifying recourses for the creditor.

• It guarantees a fixed interest rate for the entire term of the hypothec.
• It is always a second-rank hypothec, subordinate to any other existing hypothecary claims.
• It exempts the borrower from needing to have a credit check performed by the lender.

Correct answer: It is executed before a notary, making it an authentic act, and can have executory force, potentially simplifying recourses for the creditor.

Explanation: In Québec, a notarial hypothec is an authentic act passed before a notary (Art. 2693 C.c.Q.). This formal execution gives it executory force, meaning in case of default, the creditor may directly proceed with certain recourses without requiring a judge to first declare the debt payable or to recognize the hypothec's existence, potentially streamlining the recourse process.