The client
A buyer completed final closing on a $398,000 Phase 1 unit in a multi-phase condominium development in Collingwood.
Purchase price
$398,000, Collingwood
10% down, insured, final closing
Shared amenities
Pool, gym, parking structure
Shared with a still-unbuilt, unregistered Phase 2 corporation
Combined income
$8,300/month
Other debt
$225/mo car loan
The problem
The Phase 1 condominium corporation is registered under Ontario’s Condominium Act, 1998 and the unit’s transfer can proceed, but the pool, gym and parking structure serve a Phase 2 building that has not yet been constructed or registered as its own corporation. It is the reciprocal shared-facilities agreement between the two future corporations — still being finalized between the developer and its counsel — that will actually set how those shared costs divide, not the developer’s own preliminary common-expense estimate quoted at the time of sale.
What the developer’s estimate could not settle
- ▸The preliminary common-expense figure quoted at sale assumed a specific cost split between Phase 1 and Phase 2 that was not yet contractually fixed anywhere
- ▸The reciprocal shared-facilities agreement, once registered, is what will actually bind both future corporations to a cost-sharing formula
- ▸Until that agreement registers, no one -- not the developer, not either corporation -- can certify the eventual split with certainty
The buyer was closing on a real, complete unit in a real, registered corporation. The uncertainty sat entirely in what the building next door would eventually cost this one, once it existed.
The numbers
The mortgage itself is sized to this unit alone, so the shared-facilities uncertainty next door never touched the qualifying arithmetic.
| The insured purchase, Phase 1 unit | Amount |
|---|---|
| Purchase price | $398,000 |
| Down payment (10%) | $39,800 |
| CMHC premium (3.10% at 90% LTV) | +$11,104 |
| Total insured mortgage | $369,304 |
| Ratio check at the qualifying rate | Figure |
|---|---|
| Payment at the qualifying rate (6.90%), 25 years | $2,564/mo |
| GDS (payment + $330 tax + $125 heat) ÷ $8,300 income | 36.4% |
| TDS (GDS numerator + $225 car loan) ÷ $8,300 income | 39.1% |
36.4% and 39.1% sit comfortably inside CMHC’s 39% GDS and 44% TDS maximums, numbers that hold regardless of exactly how the eventual Phase 1/Phase 2 shared-facilities split lands, since this mortgage is sized to the unit alone -- a routine result set against a market where housing starts statistics show multi-phase condominium projects are an ordinary part of new supply.
The solution
A mortgage agent licensed under Ontario’s Mortgage Brokerages, Lenders and Administrators Act treated the shared-facilities uncertainty as a documentation condition to clear before closing, not a detail to take on faith.
First, obtained written confirmation from the developer’s counsel that the reciprocal shared-facilities agreement was in its final form. A verbal assurance that Phase 2 would “work itself out later” was not something a solicitor could rely on.
Second, confirmed the agreement would be entered into the land titles system against both corporations before or concurrent with final closing, rather than closing on a promise that registration would follow eventually.
Third, had the file’s own condo-fee estimate flagged as provisional pending that registration, so the buyer understood the quoted common-expense figure could still move once the agreement actually registered.
The outcome
Final closing funded insured at 36.4% GDS and 39.1% TDS once the reciprocal shared-facilities agreement was confirmed registered against both corporations.
Both ratios sit comfortably inside CMHC’s 39% GDS and 44% TDS maximums. Ontario’s land transfer tax on the $398,000 purchase came to $4,445.
What to take from this file
- 01A phased condominium’s shared amenities may be governed by an agreement between two corporations, not just the one you’re buying into. Confirm that agreement exists and is registered, not just the developer’s preliminary estimate.
- 02A developer’s quoted common-expense figure at sale is not the same as a registered cost-sharing formula. Treat it as provisional until the reciprocal agreement is actually in place.
- 03This is a final-closing file, not an interim-occupancy one. The unit and corporation are real and registered; only the shared-cost split with a future phase remains open.
- 04The mortgage math itself does not need to wait on the shared-facilities question. A purchase sized to one unit qualifies on that unit’s own numbers, regardless of how a future phase’s costs eventually divide.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸CMHC — Purchase (Mortgage Loan Insurance) — default-insurance premium schedule by LTV band (25-year amortization).
- ▸CMHC — CMHC Home Start — minimum down payment tiers (5%/10%) and the $1.5M insured price cap.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸CMHC — CMHC Reviews Underwriting Criteria — GDS 39% / TDS 44% maximums and the 600 credit-score floor for insured files.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
- ▸Ontario.ca — Calculating Land Transfer Tax / Land Transfer Tax Refunds for First-Time Homebuyers — Ontario's marginal land transfer tax brackets and first-time-buyer refund.
Illustrative in this file — lender-specific, not rules:
- ▸4.90% contract rate — rates move daily; not a quote.
- ▸the developer’s preliminary common-expense estimate — the true split depends on the reciprocal shared-facilities agreement once both corporations exist; the estimate quoted at sale is not the final figure.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.