The statutory mortgage for craftsmen and contractors is one of the most powerful protective tools available to the construction sector under Swiss law. It allows any craftsman or contractor who has worked on a property to register a mortgage on it to guarantee payment of their claim, even without a direct contract with the owner. Governed by art. 837 para. 1 ch. 3 SCC, this real security is subject to a mandatory four-month deadline that obliges creditors to act quickly. PBM Avocats assists craftsmen, contractors and clients in all matters relating to this institution, in Geneva and the canton of Vaud.
The Statutory Basis and Beneficiaries (Art. 837 Para. 1 Ch. 3 SCC)
Art. 837 SCC recognises several categories of statutory mortgages, among which that of craftsmen and contractors occupies an essential place in construction practice. It benefits any person who has supplied materials and work, or only work, to construct or demolish a structure. This definition is broad: it covers not only the general contractor, but also subcontractors, self-employed craftsmen (electricians, plumbers, heating engineers, tilers, joiners) and construction material suppliers.
One of the most remarkable aspects of this regime is that the beneficiary of the statutory mortgage may have no direct contractual relationship with the property owner. A subcontractor working for the general contractor may register a statutory mortgage on the client's property, even if the latter has already paid the general contractor. In this case, the client bears the burden of the statutory mortgage and will have to turn against the general contractor to recover the amounts paid twice. This reality obliges clients to carefully monitor payments made by contractors to their subcontractors.
The Four-Month Deadline and Its Calculation (Art. 839 Para. 2 SCC)
Art. 839 para. 2 SCC sets a mandatory four-month deadline for requesting provisional registration of the statutory mortgage. This deadline runs from the end of the works performed by the craftsman or contractor concerned. The concept of end of works is interpreted restrictively by the Federal Supreme Court: it refers to the end of the effective performance of this craftsman or contractor on the site, and not the end of the general construction site or the official acceptance of the structure. Correction or completion works carried out after the end of the main works may, under conditions, extend the starting point of the deadline.
The four-month deadline is a forfeiture deadline: it cannot be suspended, interrupted or extended, except by operation of law in exceptional circumstances. Its non-compliance results in the definitive loss of the right to the statutory mortgage. It is therefore crucial for craftsmen and contractors to precisely identify the end date of their works and to quickly mandate a lawyer to prepare the provisional registration request. PBM Avocats implements monitoring procedures for its clients in the construction sector so as never to miss this critical deadline.
The Provisional Registration Procedure and Its Judicial Confirmation
The provisional registration request is submitted to the competent land registrar (that of the canton in which the property is located). It must be accompanied by documents justifying the existence and amount of the claim: contract or accepted quote, delivery notes, issued invoices, correspondence with the debtor. The registrar records the provisional mortgage in the journal and ledger without prior hearing of the owner.
The provisional registration must be confirmed within a deadline set by the court (generally three months from registration) failing which it lapses. This confirmation is obtained through legal proceedings aimed at recognition of the secured claim and conversion of the provisional registration into a final registration. If the claim is disputed, the matter is brought before the competent civil court which rules on the merits. PBM Avocats manages all these proceedings, from the registration request to the confirmation judgment.
Protection Strategies for Clients
The client may guard against the risk of statutory mortgages in several ways. They may insert in the contract with the contractor a clause obliging them to produce payment attestations from subcontractors and suppliers before each instalment payment. They may retain part of the contractor's price (retention) until expiry of the four-month deadline and production of all attestations. Art. 839 para. 3 SCC also allows the owner to obtain the cancellation of the provisional registration by offering equivalent security (bank guarantee) to the creditor. PBM Avocats drafts appropriate contractual clauses and assists clients in managing these risks within the framework of Swiss real estate law.
Frequently Asked Questions about the Statutory Mortgage for Contractors and Craftsmen
Who benefits from the statutory mortgage of contractors and craftsmen?
Under art. 837 para. 1 ch. 3 SCC, the right to registration of a statutory mortgage belongs to any craftsman or contractor who has supplied materials and work, or only work, for the construction or demolition of a structure. This covers general contractors, subcontractors, self-employed craftsmen (masons, electricians, plumbers, carpenters, etc.) and suppliers of materials. The property owner (client) may not be the direct debtor of the craftsman or contractor — the subcontractor working for the general contractor may still register a statutory mortgage on the client's property, without having a direct contractual relationship with them.
What is the deadline for registering the statutory mortgage of contractors?
The provisional registration of the statutory mortgage must be requested with the land registry within four months from the end of the works performed by the craftsman or contractor (art. 839 para. 2 SCC). This deadline is mandatory and its violation results in the definitive loss of the right to the statutory mortgage. The end of works means the end of the effective performance of the craftsman or contractor concerned, and not the end of the general construction site. In case of doubt about the exact date, it is advisable to act without delay. PBM Avocats assists craftsmen and contractors in identifying the end date of works and in filing the request within the statutory deadline.
What is the procedure for provisional registration of the statutory mortgage?
Provisional registration is obtained on simple application to the land registrar or, in case of refusal or dispute, by court decision (art. 961 para. 1 SCC). The craftsman or contractor files their application accompanied by documentation justifying the claim (contract, delivery notes, invoices, correspondence). The provisional registration is entered in the land register journal and ledger without the owner being previously informed. The applicant must then have the provisional registration confirmed by the court within a deadline set by the court (generally three months), failing which it lapses. Confirmation requires the introduction of legal proceedings aimed at having the secured claim recognised.
Can the owner oppose the registration of the statutory mortgage?
Provisional registration may be requested without the owner's agreement and even without them being previously informed (ex parte procedure). However, the owner may oppose the judicial confirmation of the registration by contesting the existence or amount of the claim. They may also offer alternative security (bank guarantee, cash deposit) to obtain the cancellation of the provisional mortgage (art. 839 para. 3 SCC). In practice, owners who wish to sell or refinance their property have an interest in quickly dealing with these registrations to prevent them from blocking the transaction.
Does the statutory mortgage rank before conventional mortgages?
The rank of the statutory mortgage of contractors is in principle subsequent to the limited real rights already registered in the land register at the time of its registration (arts. 972 and 840 SCC). However, the statutory mortgage of contractors has a particularity: even if several contractors register their statutory mortgages at different dates, all their mortgages rank equally among themselves and collectively prevail over rights registered subsequently to the first registration (art. 841 SCC). If the proceeds of the forced sale are insufficient to satisfy all of them, they are paid in proportion to their respective claims.