Habitations Luma: construction hypothecs ordered off co-owners' units

Two holders of legal construction hypothecs on the Lago condominium project in Mont-Tremblant objected when the debtors asked the Superior Court of Québec to strike their security from units that belong to the project's co-owners. Justice Janet Michelin ordered every construction hypothec registered against the project's units struck, in a reverse vesting order signed on August 31, 2026, and in reasons dated September 8 answered the objection: "The hypothecs are accessory to the monetary claim. Once the holders of the legal construction hypothecs have the assurance that sums remain available to pay them should their claims be recognized as valid, the Court does not see how the presence of the co-owners is necessary to such a debate," per the Reasons, Sept. 8, 2026, paras. 1, 3, 39, 42–43 [translation].

The order approves a share transaction for an unfinished project of 69 condominiums in two buildings on the shore of Lac Tremblant. Under a share purchase agreement dated August 27, 2026, 9547-8814 Québec inc. is issued the purchased shares of 9251-7465 Québec inc., which holds the shares of the developer, 9304-7033 Québec inc., doing business as Habitations Luma; the other equity interests the agreement covers are cancelled or deemed redeemed without consideration. The companies keep the 29 units the agreement calls Retained Units, the project's permits and their rights in certain suits against the City of Mont-Tremblant; excluded liabilities go to a new ResidualCo 1 and excluded assets to a ResidualCo 2, and the price is paid to the monitor, MNP Ltée, in trust for ResidualCo 1, per the Reasons, Sept. 8, 2026, paras. 4, 24–29, 46. The structure, as the monitor's Ninth Report set it out, was reported here on September 4.

Two parts of the reasons reach past this one sale: construction hypothecs struck from co-owners' units on the strength of s. 11 of the CCAA, with no decision cited, and a price kept under seal after closing because the buyer acquired units to develop and resell.

The co-owners' units

On July 23, 2025, on an amended motion by the Syndicat des copropriétaires Lago Tremblant, the court partly granted the motion and ordered that until September 30, 2025 no notice of a legal construction hypothec for work on the buildings at 121 and 123 rue Cuttle, and no prior notice of exercise, could be published against any private portion there without leave, with any deadline to publish deemed extended to that date, per the Judgment on the syndicate's amended motion, July 23, 2025, paras. 1–2. The September reasons describe that order as protecting "the rights of the owners of condominium units in the Project, while preserving the rights of the holders of legal hypothecs in the construction field," per the Reasons, Sept. 8, 2026, para. 7 [translation].

Schedule G to the August 31 order lists five legal hypothecs of construction, registered on the land register between April 15 and July 9, 2025, against an immovable whose private portions it lists as the units numbered from 101 to 411 at 123 rue Cuttle and from 501 to 903 at 121. The order directs the registrar for the Terrebonne registration division to strike them on presentation of a certified copy of the order and the monitor's certificate, per the Approval and Reverse Vesting Order, Aug. 31, 2026, para. 41, Sched. G.

The reasons say the striking of the hypothecs registered on units belonging to co-owners was a condition required by the purchaser, which "wishes to avoid being drawn into possible multi-party litigation with the hypothecary creditors and the co-owners." Under the transaction the price is paid to ResidualCo 1, which will be under the monitor's supervision, and in the reasons' words it "is amply sufficient to cover the amounts claimed and secured by the legal construction hypothecs should those claims be accepted by the Monitor." At the time of the hearing, the reasons add, the monitor had not yet confirmed that the hypothecs were valid, per the Reasons, Sept. 8, 2026, para. 38 [translation].

Two of the hypothec holders opposed the striking on the co-owners' units; the reasons do not say which two. As the reasons set out their argument, the striking deprives them of their rights, and a debate on the validity of their security "must necessarily include those co-owners," per the Reasons, Sept. 8, 2026, para. 39 [translation].

The court's answer starts from s. 11, which in the reasons' words gives the court "a broad discretionary power allowing it to make any order it considers appropriate in the circumstances." Any debate on the hypothecs' validity "will take place within the proceedings brought under the CCAA," and should the court conclude that they are valid, "sufficient funds remain available to pay the claims of the holders of the legal construction hypothecs." Proceedings under the CCAA, the reasons continue, are meant to deal with all of the questions tied to the insolvency, "of which claims arising from construction work are certainly part," per the Reasons, Sept. 8, 2026, paras. 40–42 [translation]. The court then "exercised its discretionary power to order the striking of all the legal construction hypothecs registered against the units of the Project," per the Reasons, Sept. 8, 2026, para. 43 [translation]. Paragraphs 38 to 43 cite no decision; the one authority they name is s. 11, per the Reasons, Sept. 8, 2026, paras. 38–43.

A seal that runs past the closing

The debtors asked that the share purchase agreement be kept confidential and under seal until any further order of the court, per the Reasons, Sept. 8, 2026, para. 50. The reasons apply the three requirements they take from Sherman Estate v. Donovan: a serious risk to an important public interest, an order necessary because reasonable alternatives will not prevent that risk, and benefits that outweigh the negative effects. They then quote a recent decision of the same court, ELNA Medical Group: sealing "protects the integrity of the process and ensures that, while the process is running its course, all potential bidders are treated equitably," per the Reasons, Sept. 8, 2026, paras. 51–52.

In the court's description the agreement holds "highly sensitive commercial information," including the price of the shares, the economic parameters of the transaction and the allocation of assets and liabilities. The court agreed that certain provisions had to stay confidential to protect the integrity of the sale process, and found the proposal to redact certain sections proportionate, as against sealing the whole agreement, per the Reasons, Sept. 8, 2026, paras. 53–54 [translation].

The length of the seal was raised from the bench. At the hearing the court questioned the parties about the duration of the order sought, which ran beyond the planned closing date, and the debtors answered that disclosing the price after closing could harm the purchaser's ability to realize its investment in the debtors' assets. The paragraph that records their answer goes on: "Unlike the acquisition of an operating business, the acquisition of a real estate development project almost necessarily involves subsequent sales by the Purchaser charged with completing the development and selling the remaining units," per the Reasons, Sept. 8, 2026, para. 55 [translation].

The court agreed, for that kind of acquisition: "In the particular case of the acquisition of real estate units in the context of insolvency proceedings with a view to their development and resale, the Court agrees that it is appropriate to make a confidentiality order of longer duration." Such an order, the reasons say, fits within the CCAA, whose objectives are to "avoid the social and economic losses resulting from the liquidation of an insolvent company," words they take from Century Services. And "the restructuring process benefits from putting in place conditions that allow potential acquirers to obtain a positive return on their investments," per the Reasons, Sept. 8, 2026, paras. 56–57 [translation].

The order keeps "the non-redacted version of the Share Purchase Agreement, Exhibit R-3, the confidential schedules thereto and such portions of the Report as identify confidential commercial terms or sealing-sensitive information" confidential and under seal "until further order of this Court," per the Approval and Reverse Vesting Order, Aug. 31, 2026, para. 54.