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Life Lease/Life Equity Housing in Ontario

Province: ON

A Life Lease or Life Equity property is primarily used in the not-for-profit sector to increase housing options for the senior market, and involves ownership but not in the traditional ‘condominium-style’ that most are familiar with. Usually, a senior would purchase a leasehold interest (the terms of which vary depending on the development) in a property when they are capable of independent living. The structure can be a townhouse or, similar to a condominium in unit size, features and monthly common expenses. The purchase price and maintenance costs are presumably more affordable than traditional housing because the sponsors are usually not-for-profit or charitable organizations. The corporation holds title to the property. It sets the eligibility guidelines for who may purchase a leasehold interest (which is the right to reside in the unit you choose and share use of the common amenities with other residents) in that structure. There is a monthly maintenance fee and the corporation maintains and manages the building.

One potential benefit of purchasing a Life Lease is that you may be able to remain at home even if your care needs increase (potentially it allows for Aging in Place). This is because many of the structures being built are connected to or affiliated with, other seniors’ resources; part of this housing option is often the availability of on-site support services (which usually need to be purchased on a fee per service basis), through an affiliated seniors’ agency, that can be utilized as needed. Depending on the residence, this may include: housekeeping (assistance with meals, laundry, cleaning), personal care (bathing and dressing), emergency call systems, dining/meal services, transportation, nearby or on-site amenities and activities/recreational & social services. The units may have special safety features and fixtures designed for the seniors’ needs (e.g. grab bars in the bathroom). The amenities available, purchase price, maintenance fees and costs to purchase services will vary depending on the structure, sponsor, location, etc.

It is important when considering this option that you do some research and ask many questions to ensure that your needs can be met both financially and physically, now and in the future, should your health decline. As well, be sure to ask about their policies around terminating a leasehold interest and how much equity would be returned or paid to you upon a decision to vacate[1].

It may also be wise to review all documents with a lawyer to ensure that you have a clear understanding of all the terms of the agreement prior to signing anything. If you are purchasing a Life Lease in a residence prior to construction being completed, you might want to research the organization that is sponsoring the structure and will hold title to it, so that you can learn about their reputation and previous dealings. There is no central registry for Life Lease communities; a quick internet search will provide you with the websites of several projects and articles related to this housing option.

This housing option is not available in all provinces. However, it has existed in Ontario for several years and there are many structures in place currently and under construction.  In 2014 Ontario’s Ministry of Municipal Affairs and Housing produced the Life Lease Housing Resource Guide: Questions and Answers for People Considering Life Lease Housing which can be downloaded at www.mah.gov.on.ca/AssetFactory.aspx?did=10455.

In September 2017, Bill 155, Life Lease Act, 2017 was introduced into Ontario’s parliament. In October of the same year, it was referred to the Standing Committee on Regulations and Private Bills where it appears to still be as of the fall of 2019. Essentially, if passed, the landlord would be required to disclose significant information to the tenant specifically related to fees, governance and management. The landlord would also be required to have a reserve fund, necessary insurance and would have to appoint a trustee to manage the fees paid to purchase the lease[2].  For information on this proposed legislation visit www.ola.org/en/legislative-business/bills/parliament-41/session-2/bill-155.

Life lease is a growing option in the western provinces as well, though there is less information about it online for other parts of Canada than there is for Ontario. For additional information visit: www.saskatchewan.ca/residents/housing-and-renting/renting-and-leasing/life-lease-housing-for-seniors for Saskatchewan; www.mlloa.ca for Manitoba (they were the first province to enact legislation in 1999); www.cplea.ca/wp-content/uploads/LifeLeases.pdf for Alberta and www.communitylivingbc.ca/wp-content/uploads/Financing-Seniors-Equity-Final-Report-08.pdf for British Columbia. If you are seriously considering purchasing a life lease unit you may also want to visit www.aicanada.ca/article/possible-valuation-issues-with-life-lease-housing/.



[1] In most complexes, when the owner of a leasehold interest (or their estate) wishes to terminate the agreement, he or she receives funds based on the market-value of the leasehold interest of the unit. There are some residences, however, that are based on a different model, and the entitlement to increased equity at the sale or transfer of the leasehold interest is linked to the amount of the initial payment.

[2] Information on Bill 155 obtained from www.ola.org/en/legislative-business/bills/parliament-41/session-2/bill-155. As of July 2019, no further activity on the bill has been indicated since October 5, 2017.

Esther Goldstein, B.Sc., B.S.W., RSW

connect@seniorcareaccess.com

 

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