The client
An investor purchased a $340,000 rental condominium unit in Rimouski, at 25% down, with no arrears of their own anywhere on the file.
Purchase price
$340,000, Rimouski
25% down, conventional, non-owner-occupied
Other owners’ arrears
$14,000 combined
Owed by several OTHER co-owners, per the syndicate’s own minutes
Buyer’s own income
$7,300/month
Relied on alone for this file
Other debt
$235/mo car loan
The problem
The minutes from the syndicate’s own annual meeting showed roughly $14,000 in combined common-charge arrears owed by several OTHER co-owners -- money the fund is owed but has not collected -- and the lender, underwriting a rental purchase where carrying-cost certainty matters most, wanted confirmation that the fund’s reserves stay adequate despite that shortfall before treating the file as routine.
Whose debt, and whose problem
- ▸The $14,000 in arrears belonged to several other co-owners, confirmed by name in the syndicate's own minutes -- none of it attributable to this buyer
- ▸A fund depleted by chronic non-payment from other units can still force a special assessment on every owner, including one with a perfectly clean record
- ▸The syndicate's reserve fund study, read alongside the arrears figure, was the only way to know whether the fund's own cushion actually absorbs the shortfall
Nothing about this buyer's own application raised a flag. The diligence here was entirely about the building's collective finances, not this unit's own file.
The numbers
Qualifying entirely on the buyer’s own income kept this file’s own arithmetic separate from the building’s collections question.
| The conventional purchase, buyer’s own income | Amount |
|---|---|
| Down payment (25%) | $85,000 |
| Base mortgage | $255,000 |
| Total debt service | Figure |
|---|---|
| Payment at the qualifying rate (7.20%), 25 years | $1,818/mo |
| Property tax + heat | $380 |
| Car loan | $235 |
| Total debt service | 33.3% |
33.3% is a figure this buyer’s own finances support easily, independent of anything happening on other owners’ accounts -- a healthy margin against the kind of demand rental vacancy rate data shows across Quebec. The fund-adequacy question was checked separately, not folded into this ratio.
The solution
A courtier hypothecaire licensed under Quebec’s Act respecting the distribution of financial products and services separated this buyer’s own clean record from the syndicate’s collective collections position entirely.
First, requested the syndicate’s own written confirmation of its collection efforts against the co-owners in arrears, rather than treating the minutes' disclosure as the end of the inquiry.
Second, obtained the reserve fund study’s own statement that the fund remained adequate net of the shortfall, confirming the arrears had not actually eroded the building’s repair capacity below a safe level.
Third, documented plainly for the lender that this buyer’s own record was never in question -- the file's real work was confirming the building's collective position, not defending this buyer's own application.
The outcome
The purchase funded at 5.20% and 33.3% total debt service once the syndicate’s fund adequacy was confirmed in writing, despite the other co-owners’ ongoing arrears.
This is a conventional, non-owner-occupied purchase at 25% down, so there is no CMHC ratio ceiling; the 33.3% figure is informational. Quebec’s welcome tax on the $340,000 purchase came to $3,210.
What to take from this file
- 01A syndicate’s fund can be strained by arrears that have nothing to do with the buyer in front of you. Check whose arrears they actually are before assuming they belong to your own client.
- 02A special assessment forced by other owners’ non-payment lands on every unit, including a buyer with a perfectly clean record. That is exactly why the building’s collective position matters to an individual purchase.
- 03The syndicate’s own minutes and reserve fund study, read together, answer the adequacy question a condo fee statement alone cannot. Request both when arrears show up in the minutes.
- 04This is not the declaration’s rental-quota restriction, and it is not this buyer’s own credit file. It is a distinct, building-level diligence question worth its own separate check.
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:
- ▸5.20% contract rate — rates move daily; not a quote.
- ▸the $14,000 combined arrears figure — each syndicate's own minutes and financial statements report its own collections position; this is not a published or universal figure.
- ▸the TDS figure — this is a conventional, non-owner-occupied purchase at 25% down -- there is no CMHC ratio ceiling; the number is informational.
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.