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Difference between life leasesand land leasesThere is another form of housing with a similarname, land lease housing, which may beconfused with life lease housing. To help youunderstand the similarities and differencesbetween life leases and land leases, please seetable 2.Table 2: Difference between life leases and land leasesTopicLand leaseLife leaseOwnershipIn a land lease, the dwelling isowned by the resident and theland on which the dwelling sitsis leased.Life lease ownership meansholding an “interest in property”providing the right to live in theunit, usually for the duration ofthe lease holder’s life or until thelease holder decides to move.PaymentRent is paid to the land owner(landlord) of the land leasecommunity, and landlords mayprovide services and facilities tothe community that are intendedfor the common use andenjoyment of the tenants andthat are included in their rent.Life lease holders purchasetheir units by paying a lump sumupfront and then pay monthlyfees for maintenance andproperty taxes.TransferOwned homes can be boughtand sold by successive residentswho, in turn, rent the lot fromthe landlord.Life leases can be sold by thelife lease holder and inherited byheirs. However, while inheritorsmay profit from a sale of thelease, they cannot move intothe unit without first applying tothe sponsor and meeting theireligibility criteria.The Residential TenanciesAct (RTA)The RTA applies to mobilehome parks and land leasecommunities.The RTA does not apply to lifelease housing, when there is adirect relationship between alease holder and theproject sponsor.Life lease housing 9

Housing providers and residentsHousing providersMost life lease housing projects in Ontario areowned and operated by established non-profitand charitable organizations, including: faith-based groupscultural associationsservice clubsseniors’ organizationshousing providersSponsors may work with the resident to helpthem identify options for a new home in longterm care or another type of accommodationthat provides support to seniors. Discuss theseoptions and any other eligibility criteria with thesponsor before purchasing a life lease interest.AssessmentMany of these organizations provide otherforms of accommodation as well. For example,a sponsor may also offer long-term care,retirement homes and/or social housing. Manylife lease projects are located on the same landas these other forms of accommodation.When assessing a resident’s ability to liveindependently, sponsors consider the person’sindividual needs and circumstances.Sponsors look at whether residents:Most non-profit developers of life lease housingcontinue to own and manage the project afterconstruction is completed.Housing residentsLife lease housing is generally marketed toseniors and older adults. Different sponsorshave different ways of defining this age group.Ability to live independently can do basic tasks on their own (forexample, cooking, eating, dressing,bathing) have access to supports that enablethem to live independently (for example,regular visits by family members orsupport workers who help with basictasks, ability to hire a live-in caregiver,etc.) pose a potential danger to themselvesor to others in the building (for example,forgetting that the oven is on, leaving atap running)The sponsor will discuss concerns directly withResidents in life lease housing must be able tothe resident. The sponsor may also requestlive independently.a meeting with the resident’s family and/or aOnce a resident begins to need a higher level of formal assessment by a doctor, occupationaltherapist or social worker.care than is available (from the sponsor, familymembers, live-in caregivers, and/or visitingsupport workers), the resident is often nolonger able to stay in the life lease unit.Life lease housing 10

Ending the leaseLife lease agreements usually give thesponsor the ability to end the resident’slease with only 30 days notice if the sponsordetermines that the resident is no longer ableto live independently. In practice, this israrely used.any physical and mental disabilities up to thepoint of undue hardship. Some sponsors may: help the resident connect with externalsupport workers or community supportservice agencies provide services such as meal delivery,phone reminders to take medications,and assistance with bathing (additionalfees may apply)Under the Ontario Human Rights Code, lifelease sponsors have a duty to accommodateExample: Farval is a 73-year-old woman who has lived in Henlin Gardens Housing, a life leaseproject, for the past 15 years. Two years ago, her health started to fail.Henlin Gardens Housing staff provided her with a phone call each morning to remind her totake her medication. Henlin Gardens Housing did not have a meal program, so Farval’s familybegan to bring her meals. A home care worker came three times a week to assist Farval withbathing and personal care.One month ago, Farval accidentally left the stove on and a roll of paper towels caught fire.A community support service agency worked with Farval and her family to find her a roomin a nearby long-term care (LTC) home. The LTC home estimated that the wait would be twomonths. The family has hired a live-in caregiver and the sponsor has agreed to let her stay untila room becomes available at the LTC home.When residents come to the point where they need more care than they can access in theircurrent home, sponsors may work with them (and their families, where appropriate) to helpthem identify more suitable accommodations.Living arrangementsto live with them. Sponsors may makeexceptions to this rule.AgeYour spouse’s age should not affect your abilityto buy the life lease if you are both planning tolive there. In most life lease projects, either youor your spouse must meet the age criteria.Care-giversMost life lease projects allow caregivers tomove into a resident’s home. The caregiver maybe a: family member over the age of 18 professional support workerChildrenSponsors generally do not permit life leaseholders to invite their children or grandchildrenThe sponsor’s approval is needed for this.Life lease housing 11

Other factors to considerRulesAs an informed consumer, consider thefollowing factors before deciding to buy alife lease:All sponsors have rules that govern residents’behaviour. For example, sponsors may placerestrictions on smoking or limits to the number,type or size of pets that residents may have.Income and assetsBuying a life lease requires a large upfrontpayment. When considering whether thispayment is affordable, the potential buyershould also consider whether the additionalongoing costs are also affordable. Thesecosts include the monthly fees charged bythe sponsor.Property taxes and utility bills may also need tobe paid separately, as well as any costs for careand meal services.SublettingMost life lease sponsors do not allow residentsto sublet their units. This is another aspect toconsider when deciding whether to purchase alife lease interest.In instances where sponsors do allowsubletting, they usually require that the personsubletting the unit: meets the eligibility criteria establishedby the sponsor can live independently is aware of and agrees to follow theterms and conditions of the lifelease agreementLifestyleAll life lease projects have their owncommunity environment. Before buying a lifelease, a person should consider whether theexisting community at a life lease project is agood match with their interests and lifestyle.A person may buy a life lease in a project evenif they are not a member of the ethnic, cultural,linguistic or religious community it serves.To make sure that everyone is bound by thesame terms, the sponsor may ask the life leaseholder and the person subletting to sign a newagreement or an amending agreement.Life lease housing 12

General rules and proceduresEach life lease housing project is different. Forexample, living in a life lease townhouse isdifferent from living in a life lease apartment.The marketing materials received from thesponsor usually give a good sense of what lifewould be like in a specific life lease community.All life lease projects provide residents witha “rules and regulations” document thataddresses the way residents are to treatthe property.SmokingMany life lease projects place limitations onsmoking. This is more common in apartmentstyle buildings than in townhouse-styledevelopments.PetsMost life lease projects permit residentsto keep pets, but they often imposecertain restrictions.The resident may need permission from staffbefore moving a pet into their home. The lifelease project may also have rules about thesize, type and number of pets.Service animals are exempt from these typesof restrictions under the Ontario Human RightsCode and the Accessibility for Ontarians withDisabilities Act, 2005. This means that if aresident has a visual impairment, the sponsormust accept their seeing-eye dog even if it islarger than what the rules normally allow.RenovationsIf you are planning to renovate, it is a good ideato start by checking the rules.Most sponsors will require you to submit arequest outlining your renovation plans. Theywill check that proposed renovations willnot negatively impact the property’s structure,electrical wiring or plumbing. You mustwait until you receive written permission tostart renovations.Some sponsors may have a list of pre-approvedcontractors to choose from.FinancesSome sponsors provide regular updates aboutthe finances of the project, others do not. Mostwill share this information with lease holderswho request it.Sponsors may share financial information withresidents by:Life lease housing 13

presenting the information at a meetingto which all residents are invited providing documents to the residents’committee delivering documents to each life leaseholder’s mailboxOperationsBoard of directorsOften, a life lease board is responsible forthe life lease project and other services thenon-profit organization offers. In some cases,residents may serve on the board of directors.Residents’ committeeLife lease projects have some form of residents’committee or advisory council. This group mayorganize activities or raise issues with staff orthe board on behalf of residents.Residents’ committees play an advisory role,while the final decision rests with the board ofdirectors.Monthly feesLife lease residents pay a fee each month forthe provision of certain services. Sponsors mayrefer to these fees by names such as: cleaning and maintenance of commonareas and common elements (forexample, hallways, parking lots, offices,street lights, pool or worship space, etc.) insurance on the life lease project’scommon elements services such as recreational activities,chaplain services and health andwellness programsmaintenance feecommon feeoccupancy feeoccupant chargemonthly operating expenseThese will vary from project to project. It isa good idea to ask a sponsor for a writtenstatement of what the monthly fees cover anddo not cover.What is usually not coveredWhat is usually covered reserve fund contributions (to repair orreplace common elements) regular reserve fund studies property management (for example,garbage disposal, lawn mowing andsnow shoveling)Life lease housing property taxespersonal contents insurancecable television and internetutilities used in your suite or townhouse(for example, heat, electricity, water andair conditioning) services such as housekeeping,personal support and bus trips to localshopping centres repairs, renovations, or replacementsof specific elements of your home 14

(for example, fixing appliances, paint,installing a grab bar, or replacing therefrigerator) expenses related to the common areas:the costs associated with the commonareas are normally distributed amongall units number of support services andoperating expenses included: themonthly fee will be higher or lowerdepending on whether: services are included or optional(for example, daily meals andhousekeeping services)Calculating monthly feesThe monthly fee is typically based on an annualoperating budget that establishes the breakeven cost of operating the project.The amount of the monthly fee is determinedby three main factors: size of the home: a life lease sponsorwill often calculate the cost of eachresident’s monthly fee by charging acertain amount per square foot expenses are included or billedseparately (for example, utilities andproperty taxes)Example: Inga is interested in purchasing a life lease and is advised that in addition to thepurchase price, there is a monthly fee calculated at 50 cents per square foot.Inga’s monthly fee for an 800 square-foot unit would therefore be 400 per month.Fee increasesUnlike rental housing, there is no law in Ontariothat limits how much a life lease project cancharge for monthly fees.Most life lease sponsors are non-profitorganizations whose goal is to maintain astable, happy, and healthy community, andraising fees dramatically would work againstthis goal.On rare occasions, the monthly fee is raised bya more substantial amount to cover significantincreases in costs of operation or to cover newor unexpected costs, such as major repair work.Cost of support servicesand activitiesLike rental housing or condominium housing,monthly fees in life lease projects are usuallyraised by a small amount each year to passalong the increased costs of operation.Some life lease projects provide many supportservices and recreational activities, othersprovide only a few and some provide nosupport services. Some of these services andactivities are included in the monthly fee andothers the resident pays for if they choose touse them.The sponsor usually gives residents advancenotice of an increase in the monthly fee.Some programs are a blend of these two types.For example, a life lease project may include aLife lease housing 15

certain number of meals in the monthly fee but The sponsor will usually provide a brochuregive the resident the option of buying additional that lists the kinds of programs and services ameals if they wish.resident can expect if they move in.Example: Michel’s monthly fee of 675 includes daily breakfast and he usually cooks the restof his meals. When necessary, Michel has the option of buying lunch and dinner from the lifelease dining room at 15 per meal, paid monthly.Reserve fundLike the reserve fund of a condominiumcorporation, the reserve fund of a life leasecorporation is an account set aside by the lifelease sponsor for future capital repairs andreplacements to the building.Most common elements of a building can beexpected to wear out and require replacementover time. To ensure they have the moneyto pay for these capital projects, mostorganizations put money into a reserve fundeach month.The sponsor works to keep the reserve fund ata level that can cover expected replacements,with some additional money to coverunexpected repairs.Reserve fund studyTo determine how much money needs to beput aside each year, many organizations hire aprofessional to carry out a reserve fund study.Reserve fund studies are usually preparedafter three to five years of occupancy and thenupdated every three to five years.While condominiums are required by law toconduct regular reserve fund studies, life leasesponsors are not required to conduct reservefund studies—though many sponsors doconduct such studies.Life lease housing 16

Buy a unitUnit that is already builtIf you are considering buying a life lease unitthat has already been built, you may want toconsult your lawyer or real estate agentto help you obtain and understand thefollowing information.are other bills to be paid in addition to yourmonthly fees.Reserve fundConfirm how much money is currently held inthe reserve fund and find out: whether a professional outside of yourorganization was hired to conduct aregular reserve fund study when the last study was conducted,what it found and request a copy whether the last reserve fund studyidentified needed repairs if the current reserve fund is adequate tocover needed repairs any restrictions on the use of thereserve fundSale and resale processMake sure you understand what model theproject adopts. For example, market value priceindex or declining balance models.If you are purchasing a life lease interestin the project, make sure you understandany applicable land transfer tax paymentrequirements.You should also be clear on the resale process.For example, find out: the percentage of the resale priceretained by the sponsor as a transfer fee(also called an administrative fee) if the sponsor retains any other feesfrom the resale price, such asrefurbishing chargesMonthly expensesMake sure to confirm: cost of monthly maintenance fees how changes to monthly feesare determined if there is a limit to annual increasesRequest a breakdown of what the monthly feescover, how the fees are calculated and if thereFinancial informationRequest a copy of the life lease project budgetfor the current year and, if available, the nextyear. Confirm that residents can obtain a copyof the budget each year.Request the last annual audited financialstatements and the auditor’s report onthe statements and information about anyborrowings of the life lease corporationor sponsor.Find out the policy on the use of surplus fundsand if there are opportunities for residentsto provide input prior to decisions on majorexpenditures, such as:Life lease housing capital repairs 17

replacements remodeling expansions repairing replacingConfirm which building features residents areresponsible for, if any.LiabilitiesFind out whether the corporation (life leaseproject or sponsor) is involved in anylegal actions.Request information on any anticipatedsubstantial changes in the corporation’s assetsor liabilities.InsuranceRequest a document confirming the insuranceon the property and confirm details about theinsurance coverage for the life lease project,such as: what is covered and what is not coveredby the sponsor whether residents need to carryinsurance for the contents of theirunit (for example, furniture, personalpossessions) whether residents need to cover anyaccidental damages that residents maycause any other types of insurance thatresidents need to carry if residents will be notified of anychanges in the insurance coverage forthe buildingRepairsConfirm which building features the life leasesponsor is responsible for: maintainingRules and regulationsRequest a copy of any by-laws or rules, find outhow the rules and regulations are developedand learn what input residents have intosetting them.Determine whether a residents’ committee oradvisory council is in place, and if residents siton the board of directors.Find out what level of input residents have inthe operations of the life lease project.Ask for information on the process in placefor resolving disputes between residents orbetween residents and the life leaseproject’s managers.Services and programsRequest information on the kinds of servicesprovided at the life lease project. Find out whatis mandatory and what is optional.Ask about the kinds of recreationalactivities provided.Getting a

real estate agent, their fee is additional. Benefits. If real estate values go up, the holder can make a profit on the sale. The value of the life lease is not tied to the age or length of occupancy of the resident. Considerations. If real estate values go down, the holder can lose money. If the holder passes away, their inheritors will