The client
A guide and minority investor in an adventure-tourism limited partnership near Squamish bought a $650,000 home with a down payment well above the Canadian norm, his own qualifying income drawn entirely from the T5013 partnership allocation the LP pays him each year.
Purchase price
$650,000, Squamish
T5013 partnership income, 2-year average
$11,200/month
LP's operating line of credit
$520,000
Registered against the partnership, not against him
Down payment
$130,000 (20%)
The problem
A limited partner and a general partner carry entirely different exposure to a partnership's own debts. Under BC's Partnership Act, a limited partner is not liable for the partnership's obligations beyond the capital they contribute or agreed to contribute -- provided they take no part in managing the business. A general partner has no such shield.
What the first read of the file got wrong
- ▸The lender's underwriter saw the $520,000 operating line on the partnership's own financials and, treating him like a general partner, proposed counting a pro-rata share of it against his personal debt service
- ▸The limited partnership agreement confirmed he held a minority LP interest only, with no signed personal guarantee on the operating line anywhere in the partnership's banking file
- ▸He held no management role in the partnership's day-to-day operations -- the one condition, under the Act, that could have put his liability shield at risk
His actual exposure to the partnership's own debt was zero. Counting any share of it against him would have penalized a liability he never carried.
The numbers
Once the liability shield was confirmed, qualifying him on his T5013 income alone, with none of the LP's debt attached, was ordinary arithmetic.
| The uninsured purchase | Amount |
|---|---|
| Purchase price | $650,000 |
| Down payment (20%) | −$130,000 |
| Mortgage amount | $520,000 |
| Total debt service | Figure |
|---|---|
| Payment at the qualifying rate (7.10%), 25 years | $3,674/mo |
| Property tax | $380/mo |
| Heat (lender estimate) | $140/mo |
| Car loan | $260/mo |
| Total debt service | 39.8% |
39.8% is informational on this uninsured purchase, computed on his $11,200/month T5013 allocation alone -- the partnership's own $520,000 operating line never enters his personal debt-service calculation at all.
The solution
A submortgage broker licensed under BCFSA, running the standard self-employed income review, treated the partnership's operating line as a separate legal question from his personal income, not a debt to split proportionally by ownership share.
First, obtained the limited partnership agreement, confirming his status as a limited partner and the exact terms of his capital contribution.
Second, confirmed with the partnership's own bank that no personal guarantee from him existed anywhere against the operating line, and that he held no management role that could expose him under the Partnership Act.
Third, qualified him solely on his own T5013 income, excluding the operating line from his personal total debt service entirely.
The outcome
The purchase funded at 5.10%, qualified solely on his $11,200/month T5013 income, with total debt service at 39.8% and the partnership's operating line correctly excluded throughout.
Because this file is an uninsured purchase, CMHC's ratio maximums do not apply directly; the 39.8% figure is informational.
What to take from this file
- 01A limited partner's liability is capped at their capital contribution -- not a share of the partnership's own debts. That shield only holds if they take no part in managing the business.
- 02Confirm limited-partner status directly from the partnership agreement. Don't assume a T5013 investor is exposed to partnership debt the way a general partner would be.
- 03Get written confirmation no personal guarantee exists. A partnership's own operating line can carry a personal guarantee from one partner and not another.
- 04Qualify a limited partner on their own income allocation, not a proportional share of the partnership's balance sheet. The two are legally distinct questions.
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.
Illustrative in this file — lender-specific, not rules:
- ▸5.10% contract rate — rates move daily; not a quote.
- ▸the $11,200 two-year T5013 average — each partnership's own results and allocation set this figure; not a formula.
- ▸the TDS figure — this file is an uninsured purchase, so 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.