The Concept
The Life Lease concept enables residents to belong to a community designed to meet their changing needs. Life Lease housing developments have been established for many years in Ontario and there are currently over 100 Life Lease communities in operation across the province. Life Lease housing offers a creative option to living in a condominium like environment with an opportunity for investment. It is ownership of a housing unit that is leased from a Charitable or Non Profit Group. A Life Lease resident purchases the exclusive right to occupy a specific unit/suite and, in Ontario, are neither tenants nor property owners. A Life Lease suite is purchased at fair market value by the resident. The resident has exclusive use of their suite, shared use of all common areas and facilities, and many more benefits. The Life Lease suite has the potential to earn a return on one’s investment similar to equity growth in a home. All this is accomplished without the worries and headaches of owning, maintaining and selling a home.
What are the benefits of Life Lease?
Life Lease provides the opportunity for capital investment and security of tenure. The resident can gain capital appreciation on their leased suite and initial investment similar to that which may be realized on a private home or condominium. Security of tenure is detailed in lease agreements and in the case of the death of the last surviving occupant, the responsibility passes to the resident’s estate for the subsequent re-lease activity. All maintenance, property management, building insurance, taxes and utilities, are the responsibility of the non-profit organization and are paid for under a monthly resident maintenance fee. This feature is especially favoured by residents who do not want the worry of the details of security and maintenance of their home, and enjoy the freedom of being able to leave the daily details to the property manager and non-profit organization. The common facilities of Life Lease projects allow residents to interrelate and create a sense of community and well-being. Residents have input into the development, management and operation of a Life Lease development through its representation on the Board of Directors and its Committees. The flexibility of a Life Lease development allows some residents to choose to be highly involved in the organization, management and decision making, while also allowing other residents to leave these responsibilities to the Board and other residents.
What are the risks of Life Lease?
The risks associated with investment in life lease housing will generally be no greater than the risks associated with condominium ownership, and may be considerably less. While condominiums are developed by private companies in order to make a profit, life lease housing is developed by community-based organizations in order to provide a healthy living environment for seniors. Condominium developers typically walk away from the project once it is completed; the non-profit life lease sponsor is traditionally involved in perpetuity. Although condominiums are governed by legislation, the life lease arrangement is based on a binding contract which can be enforced in court if necessary. Therefore it is important for potential life lease purchasers to read the contract carefully and to seek knowledgeable independent legal advice.
Eligibility to Lease
Wyndham Gardens is an independent living environment for seniors 55 years of age and over. The eligibility criterion for occupancy at Wyndham Gardens has been designed to create a seniors’ community. The minimum age for eligibility is 55 years of age. The resident must be able to live independently and have the capacity to meet the financial obligations of life lease housing.
Lease Termination
As the name implies, a life lease is normally thought of as a lease for the life time of the resident. In the majority of cases, the life lease ends on the death of the occupant. If there is a surviving spouse, the life lease term extends for the life of the surviving spouse subject to his or her ability to reside alone without assistance from the Owner and have the capacity to meet the financial obligations of life lease housing.