The client
A buyer completed on a $435,000 Phase 1 strata lot in a phased development in Courtenay.
Purchase price
$435,000, Courtenay
10% down, insured, Phase 1 strata lot
Unit entitlement
Provisional
Recalculates once Phase 2 deposits and the strata corporation’s total entitlement changes
Combined income
$9,100/month
Other debt
$240/mo car loan
The problem
Under the developer’s phased strata plan, filed under BC’s Strata Property Act, this lot’s unit entitlement -- the fraction that sets its share of strata fees and contingency reserve fund contributions -- stays provisional until a Phase 2 building deposits and the strata corporation’s total entitlement is recalculated across both phases. The Form B Information Certificate available at closing can only certify the strata corporation’s CURRENT figures, not the eventual blended ones once Phase 2 exists.
What the current Form B could and could not certify
- ▸Today’s strata fee, based on the lot’s current unit entitlement within the Phase 1 strata corporation alone
- ▸The phased strata plan’s own provision that unit entitlement will be recalculated once Phase 2 deposits
- ▸No figure for what the recalculated, post-Phase-2 strata fee will actually be -- that number does not exist yet for anyone to certify
Nothing about the current Form B was wrong. It simply could not answer a question about a phase that had not been built yet.
The numbers
Qualifying against the current, certified figures kept the file on solid ground rather than a projection nobody could stand behind.
| The insured purchase, qualified on current figures | Amount |
|---|---|
| Purchase price | $435,000 |
| Down payment (10%) | $43,500 |
| CMHC premium (3.10% at 90% LTV) | +$12,136 |
| Total insured mortgage | $403,636 |
| Ratio check at the qualifying rate | Figure |
|---|---|
| Payment at the qualifying rate (6.85%), 25 years | $2,790/mo |
| GDS (payment + $345 tax + $130 heat) ÷ $9,100 income | 35.9% |
| TDS (GDS numerator + $240 car loan) ÷ $9,100 income | 38.5% |
35.9% and 38.5% sit comfortably inside CMHC’s 39% GDS and 44% TDS maximums, calculated against today’s strata fee as disclosed in the current Form B, not a speculative post-Phase-2 figure nobody could certify yet -- a routine result for a project type residential construction investment data shows is common across BC.
The solution
A submortgage broker licensed under BC’s Mortgage Brokers Act qualified the file on what the strata corporation could actually certify today, rather than a projected future split.
First, obtained the current Form B Information Certificate directly, rather than relying on the sales brochure’s own strata-fee estimate. The Form B is the strata corporation’s own certified figure, not a marketing number.
Second, confirmed with the strata corporation’s property manager exactly which figures the phased strata plan allows to change once Phase 2 deposits, so the buyer understood what could move and what could not.
Third, qualified the file conservatively on the CURRENT unit entitlement and strata fee, rather than building the mortgage math around a projected future number nobody could yet stand behind.
The outcome
The purchase funded insured at 35.9% GDS and 38.5% TDS on the current, Form-B-certified figures.
Both ratios sit comfortably inside CMHC’s 39% GDS and 44% TDS maximums. BC’s property transfer tax on the $435,000 purchase came to $6,700.
What to take from this file
- 01A phased strata plan can leave unit entitlement provisional for years, not just months. Confirm directly whether a given lot’s entitlement is final or still subject to recalculation.
- 02The current Form B can only certify current figures. No document can certify what a future, unbuilt phase will eventually cost this lot.
- 03Qualify conservatively on what is certified today, not on a projected future split. That keeps the file honest about what is actually known versus assumed.
- 04BC’s phased strata plan and unit entitlement mechanics are their own statutory framework. Do not assume they work the same way as a reciprocal agreement between separate condominium corporations in another province.
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.
- ▸Property Transfer Tax Act, RSBC 1996, c. 378, ss. 3(1) and 3.01(4) — BC's property transfer tax: 1% / 2% / 3% marginal brackets.
Illustrative in this file — lender-specific, not rules:
- ▸4.85% contract rate — rates move daily; not a quote.
- ▸the current unit entitlement and strata fee — the phased strata plan permits recalculation once Phase 2 deposits; how that will land is not yet certified by any Form B.
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.