Protection Mandate and Mortgage in Quebec | Broker Guide

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The Protection Mandate: Quebec's Legal Framework

The protection mandate, formerly known as a mandate in case of incapacity, is a fundamental legal instrument in Quebec. Governed by articles 2166 to 2174 of the Civil Code of Quebec, it allows any person of full age and capacity to designate a mandatary responsible for caring for them and administering their property should they become incapable. This document takes on particular importance in the mortgage context, as it determines who will be able to manage the loan, make payments, and take decisions related to the property if the owner loses legal capacity.

Homologation: A Mandatory Step Before Any Action

A protection mandate only takes effect once it has been homologated by the court. In accordance with articles 884.1 to 884.6 of the Quebec Code of Civil Procedure, the homologation process requires a medical assessment and a psychosocial assessment confirming the mandator's incapacity. The designated mandatary must file an application with the court, accompanied by these assessments. The process can take several weeks or even a few months. Until homologation is granted, the mandatary has no legal authority to act on the mandator's behalf, even if mortgage payments are overdue.

Scope of Powers: Simple Administration vs Full Administration

The Civil Code of Quebec distinguishes between two levels of administration. Simple administration (articles 1301 to 1305 C.C.Q.) authorizes the mandatary to perform acts of preservation and ordinary administration: making mortgage payments, renewing home insurance, and collecting rent. Full administration (articles 1306 to 1307 C.C.Q.) grants much broader powers, including the ability to sell property, mortgage it, or substantially alter the mandator's patrimony. The choice between these two levels should be made when drafting the mandate, ideally with the guidance of a notary.

Simple administration: routine payments, mortgage renewal on similar terms, property maintenance
Full administration: property sale, refinancing, taking on a new mortgage (subject to court authorization in certain cases)
Without a mandate: the court will appoint a tutor or curator, which is longer and more costly

Mortgage Implications for the Mandatary

In practice, the mandatary who wishes to intervene on the mandator's mortgage file must provide the lender with a certified copy of the protection mandate, the court's homologation judgment, and proof of identity. Renewing an existing mortgage is generally considered an act of ordinary administration if conditions remain similar. However, refinancing, increasing the mortgage amount, or taking out a new mortgage are acts that go beyond simple administration. Even with full administration, lenders may require additional judicial authorization to protect the mandator's interests.

The Mortgage Broker's Role With a Protection Mandate

The mortgage broker plays an essential advisory role in these situations. They must first verify the validity and scope of the homologated mandate. They should then communicate clearly with the lender to ensure the required documents are complete. When the intended transaction exceeds the mandatary's powers, the broker must direct them to a notary or a lawyer specializing in personal law to obtain the necessary authorizations. The Chambre des notaires du Quebec and the Barreau du Quebec offer referral services to find a qualified professional. The broker should also remind clients of the importance of drafting a protection mandate that expressly covers mortgage-related decisions, well before any situation of incapacity arises.

Frequently Asked Questions

What is a protection mandate in Quebec?

A protection mandate is a legal document by which a person designates in advance a mandatary to care for themselves and their property if they become incapable. It is governed by articles 2166 to 2174 of the Civil Code of Quebec and must be homologated by the court before it takes effect.

Can the mandatary renew the mandator's mortgage?

Yes, if the mandate provides for full administration of property, the mandatary can generally renew an existing mortgage at market conditions. For a mandate of simple administration, the mandatary can only perform acts of preservation and ordinary administration. The lender will require a copy of the homologated mandate and the homologation judgment.

Can the mandatary sell the mandator's property?

A mandatary with full administration can sell the property if the mandate expressly allows it or if it is in the mandator's interest. In cases of simple administration, court authorization is required for acts of alienation such as selling an immovable. The notary overseeing the transaction will verify the mandatary's powers.

Can the mandatary take out a new mortgage?

Taking out a new mortgage is an act that goes beyond simple administration. Even with a mandate of full administration, the mandatary will generally need court authorization to hypothecate the mandator's immovable, unless the mandate specifically provides for it. Lenders are particularly cautious in these situations.

How should a mortgage broker handle a file involving a protection mandate?

The broker should first obtain a copy of the homologated mandate and the homologation judgment. They must verify the scope of the mandatary's powers (simple or full administration) and ensure the intended transaction is covered. When in doubt, the broker should direct the mandatary to a notary to confirm their powers before submitting the file to the lender.