The client
A buyer in Matane purchased a $265,000 rental duplex -- the building only, since the land beneath it (le trefonds) has belonged to a family member for decades under a propriete superficiaire arrangement.
Purchase price
$265,000, Matane
Building/superficiary right only -- the land is not included
Down payment
35% of the building price
Set by the lender given the non-standard security
Second unit's rent
$950/month
Buyer's own income
$6,200/month
The problem
Propriete superficiaire is a real, distinct form of ownership under the Civil Code: ownership of the constructions on an immovable that belongs to someone else, the trefoncier. It is not a lease and not a temporary right that reverts -- but it does mean the building and the land underneath it can have two entirely different owners.
What a standard rental mortgage assumes, and this file couldn't provide
- ▸A standard purchase mortgage assumes the borrower owns (or is buying) both the land and the building together as one immovable
- ▸This buyer owns, and is only ever going to own, the building -- the land itself remains the trefoncier's own property
- ▸No default insurer's standard homeowner product is built for security that structurally excludes the land
The building was never in question. What the mortgage could actually be secured against was.
The numbers
Once the security was correctly understood as the building alone, the qualifying math followed from there.
| Financing the building alone | Amount |
|---|---|
| Down payment (35% of building price) | $92,750 |
| Mortgage on the superficiary right | $172,250 |
| Total debt service | Figure |
|---|---|
| Payment at the qualifying rate (7.35%), 25 years | $1,244/mo |
| Property tax | $240/mo |
| Heat (lender estimate) | $95/mo |
| Car loan | $200/mo |
| Total debt service, income plus offset second-unit rent | 26.7% |
26.7% leaves real room even before crediting the second unit's rent in full -- a margin consistent with how rental vacancy rate data suggests a well-located secondary unit can support. The unusual part of this file was never the ratios; it was what the mortgage could actually be registered against.
The solution
A courtier hypothecaire licensed under Quebec's Act respecting the distribution of financial products and services structured the file around what propriete superficiaire actually is, not what a standard rental purchase assumes.
First, confirmed with the notary that the building's ownership was genuinely propriete superficiaire, created decades earlier, and that the land itself remained the trefoncier's own separate property.
Second, placed the file with a lender comfortable registering a mortgage against a superficiary right specifically, rather than land-plus-building together -- no default insurer's product fit this security, so the file was financed conventionally at 35% down.
Third, confirmed with the notary that Quebec's welcome tax applied only to the building's own transfer value, since the land itself was never part of what was being sold.
The outcome
The purchase funded uninsured at 26.7% total debt service, with Quebec's welcome tax on the $265,000 building coming to $2,336 -- calculated on the building alone, because that is all that actually changed hands.
Because this file is uninsured (no default insurer's product fits security that excludes the land), CMHC's ratio maximums do not apply directly; the 26.7% figure is informational.
What to take from this file
- 01Propriete superficiaire is ownership, not a lease. It lets the building and the land underneath it have two entirely different owners -- distinct from emphyteusis (temporary, reverts) and usufruct (a personal enjoyment right, not ownership at all).
- 02A mortgage on a superficiary right secures the building only. Confirm early which lenders will register against that specific right, since most standard rental-purchase products assume land and building together.
- 03Quebec's welcome tax follows what actually transfers. A building sold without its land is taxed on the building's own value, not an assumed land-plus-building price.
- 04Confirm the arrangement with the notary before pricing the file. Propriete superficiaire, cession du droit d'accession, and renunciation of accession each have different publication requirements under the Civil Code.
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.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸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.
- ▸Gouvernement du Québec — Droits sur les mutations immobilières — Quebec's transfer duties ('welcome tax') — 2026 indexed brackets.
Illustrative in this file — lender-specific, not rules:
- ▸5.35% contract rate — rates move daily; not a quote.
- ▸the 50% rental offset convention — each lender publishes its own treatment for a second unit's rent; there is no universal rule.
- ▸35% down payment — this reflects one lender's own comfort level with non-standard security; another lender may set a different minimum.
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.