When you buy a condo or townhouse in BC, your lender is really underwriting two borrowers: you, and the strata corporation. I see strong, well-qualified buyers get declined because of weak buildings every month, and it usually happens a couple of days before subject removal, right when it hurts the most. Here is how strata financing works and how to keep your deal clean. Questions at any point? Call me at 250-859-2100.
What the Lender Reads (and What They’re Looking For)
Your income and credit are only half the file. The lender, and the default insurer if you are putting down less than 20%, also goes through the building’s paperwork: the Form B (the strata’s official disclosure), the depreciation report (what is wearing out and when), the contingency reserve fund (whether there is money set aside to fix it), the meeting minutes (what owners are actually worried about), and the strata’s insurance certificate. The red flags are predictable once you know them: reserves that can’t cover an aging roof or plumbing stack, special levies that have passed or are clearly coming, active litigation, and buildings whose insurance deductibles jumped after 2020.
The Insurance Deductible Trap
BC’s strata insurance market got a lot tougher in recent years. Water-damage deductibles over $100,000 are now normal in some buildings. Lenders pay attention because a unit owner can be personally on the hook for that deductible, so your own condo policy needs deductible coverage that matches. Before you remove subjects, check that the strata’s insurance certificate and your unit policy line up. It takes five minutes and it prevents a five-figure surprise.
Rental and Age Restrictions: What Changed in BC
Since Bill 44 passed in late 2022, strata corporations can’t enforce most rental-restriction bylaws anymore. Long-term rentals are broadly allowed, which opened up far more lenders for investor condo purchases. Two things to watch, though. Buildings restricted to 55+ are still legal, and some lenders treat them differently because the resale market is thinner. And short-term rentals are a separate, much stricter regime under provincial and municipal rules. If your plan involves renting the unit out, tell me up front, because it changes which lender is the right fit.
The Strata Fee Math Nobody Shows You
Strata fees count against your qualifying ratios. At today’s roughly 6% stress-test rate, every $450 a month in strata fees eats up about $70,000 in purchase capacity. Two units at the same price with $280 and $520 fees are not the same purchase in a lender’s eyes. Build the fee into your pre-approval from day one, not after you have fallen for the unit.
The Pre-Offer Checklist
- Order the strata documents the day your offer is accepted, not on day five of a seven-day subject period
- Send me the Form B, depreciation report, and minutes right away; if the building has problems, I can re-match you to a more tolerant lender while there is still time
- Verify the strata insurance deductible and make sure your unit policy covers it
- Ask about levies: passed, proposed, or whispered about in the minutes
- Keep your financing condition until the lender has cleared the building. Waiving early on a strata purchase is how deposits get lost
Strata Mortgage FAQ
Can I really be declined because of the building?
Yes, and it happens all the time. The fix is usually lender selection rather than a better application. Lenders have very different appetites for older buildings, small stratas, litigation, and levy exposure, and a file declined at one lender frequently gets approved at another on identical borrower terms.
Do rental restrictions still exist in BC condos?
Mostly no. Bill 44 ended most long-term rental restrictions in late 2022. Age restrictions (55+) are still allowed, and short-term rentals are governed separately and more strictly.
What’s a red flag in a depreciation report?
Big-ticket items like the roof, building envelope, plumbing, or elevators coming due within a few years, paired with a reserve fund that can’t cover them. That gap is tomorrow’s special levy. Lenders price it in, and your offer should too.
Is a townhouse different from a condo for financing?
Same strata review, usually with smaller buildings and simpler reports. Bare-land stratas, which are common in the Okanagan, are different again: the strata maintains roads and services rather than your building, and some lenders treat them as equivalent to detached homes. Worth a quick check before you offer.
Buying a Condo or Townhouse in the Okanagan?
Whether it is your first unit or your fifth, send me the listing and the Form B and I will give you a same-week read on the building and the best-fit lender. Call 250-859-2100 or book a free consultation. Related reading: first-time buyer guide · investment property mortgages · Kelowna mortgage broker.