On October 27th, 2023, Bill 17 – An Act to amend various provisions for the main purpose of reducing regulatory and administrative burden (the “Bill“), obtained royal assent.1
The purpose of the Bill is to amend various provisions of Québec laws with the main objective to reduce the regulatory and administrative burden on businesses in Québec.2 These changes are part of the Québec government's efforts to reduce the paperwork and time delays which hinder business competitiveness.3
Among the changes introduced, the Bill makes certain amendments with respect to the publication of rights; specifically the Bill reduces the period for publication of certain rights in order to be set up against third persons.
Several provisions of the Civil Code of Québec (the “CCQ“) will be amended as of November 27, 2023 to reduce the period of retroactivity of opposability against third parties from 15 days to 7 days. In the commentary to the Bill, it is stated that the current 15-day period creates too much uncertainty for both individuals and businesses; the new 7-day period will reduce this uncertainty, and will also help to speed up transactions in the movable property (i.e. personal property) sector, while making contractual relations more secure.
SALE CONTRACTS
Instalment Sale: As a result of the changes introduced by the Bill, Article 1745 CCQ will provide that, in the case of instalment sales, a reservation of ownership with respect to a road vehicle or other movable property determined by regulation, or with respect to any movable property acquired for the service or operation of an enterprise, may be set up against third persons only if it has been published and the reservation of ownership may be set up against third persons from the date of the sale provided the reservation of ownership is published within 7 days4 of the date of the sale.
Sale with a Right of Redemption: in the same vein, Article 1750 CCQ will provide as follows: a right of redemption with respect to a road vehicle or other movable property determined by regulation, or with respect to any movable property acquired for the service or operation of an enterprise, may be set up against third persons only if it has been published and the right of redemption may be set up against third persons from the date of the sale provided the right is published within 7 days5 of the date of the sale.
LEASING AND LEASES
It should also be noted that certain changes proposed by the Bill will also apply to specific leasing and lease provisions of the CCQ.
Leasing transactions: the Bill amends Article 1847 CCQ regarding the publication of rights of ownership of the lessor in movable property; these rights of ownership will be set up against third persons from the date of the leasing contract provided the rights of ownership are published within 7 days6 from the date of the leasing contract.
Lease transactions: finally, the Bill amends Article 1852 CCQ, to provide that rights resulting from a lease, with a term of more than one year, of a road vehicle or other movable property determined by regulation, or of any movable property required for the service or operation of an enterprise may be set up against third persons from the date of the lease provided they are published within 7 days7 from the date of the lease.
So word of warning to vendors and lessors of movable property in Québec, please take note of the shortened period to set up your rights of ownership against third persons.
Footnotes
1. https://www.assnat.qc.ca/en/travaux-parlementaires/projets-loi/projet-loi-17-43-1.html
2. Explanatory Notes of the Bill.
4. Section 162 of the Bill.
5. Section 163 of the Bill.
6. Section 164 of the Bill.
7. Section 165 of the Bill.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
