Life Lease
A growing housing option for seniors in Ontario is a unit in a life lease building. A few years back I had the opportunity to see first hand what a life lease was all about.
I initially became involved with the process here in Uxbridge as a member of a group who were looking into alternative housing solutions for seniors in Uxbridge. I continued to work with members of the group who felt it could be done as a development rather than the more conventional way at the time (a church or organization sponsored project) which often takes years to get off the ground. Participating in this project was an exciting endeavor for me as I was very interested in options for Seniors who wanted an independent lifestyle but no longer wanted the work involved in the up keep of a home.
The following is a primer on life lease housing that I posted some time ago
A "Life Lease" is a form of housing designed primarily for seniors that allows them to live independently in a retirement community setting. It has also been described as the "right to occupy" wherein individuals purchase the right to occupy a dwelling unit for the rest of their life, or until such time as they no longer wish to occupy the dwelling. Unfortunately Life lease arrangements are not covered by Ontario's Condominium Act, or the Residential Tenancies Act. The relationship between the life lease sponsor (developer) and resident (purchaser) is defined in the life lease agreement and is governed by contract and common law.
These life lease agreements determine the level of input into management, and conditions of occupancy and sale of the dwelling unit. Unfortunately purchasers often choose life lease housing based on its location, price, amenities or sense of community. As a result, many purchasers may not fully understand what they are purchasing. The contents of agreements entered into by sponsors and purchasers can vary widely. The variation provides sponsors and purchasers with flexibility in designing life lease housing projects that suit the needs and desires of a seniors' community. On the other hand the lack of a standard legal, financial and governance structures for life lease projects can pose significant challenges for purchasers, as well as legal and real estate professionals involved in the life lease transaction.
Life leases projects have a number of characteristics in common with both condominium ownership and rental housing and are generally set up by not-for-profit or charitable organizations (the Sponsor). These projects generally provide amenities as well as limited services for residents. The attraction for seniors to a life lease is the opportunity to move from a their home into a housing project where there is companionship, programs or services in keeping with a retirement lifestyle and at the same time the ability to maintain some form of equity in real estate ownership.
Most life lease projects in Ontario follow the basic structure of a "market-value" model where Purchasers pay full "market value" for the right to occupy the life lease unit. When the occupancy ends, the resident or their estate will sell the life lease interest for whatever the market value is at that time. Significant variation may exist in how individual life lease projects are developed and managed. Each project establishes its own agreement, which determines the governance of the housing project, the occupancy conditions and sale of the unit.
A few of the key components of a life lease project are: They are generally developed or sponsored by community-based, not-for-profit organizations. The project sponsor and purchaser enter into a life lease agreement detailing the unit price, conditions of occupancy and what happens when the occupancy ends. Life lease housing projects may include high- or low-rise apartment buildings, semi-detached or townhouses, and detached houses. Prices are generally comparable to condominiums. The length of occupancy varies in individual life lease agreements. In many agreements, the resident maintains the right to occupy the unit for the duration of their life (or until no longer capable of living in the unit). Residents pay property taxes and monthly maintenance fees for building services and utilities. These fees cover maintenance, reserve funds, administration, building insurance, landscaping, etc. At the end of occupancy, units are resold. Sponsors often retain administration fees of 5% to 10% of resale value.
SRES
As a Seniors Real Estate Specialist I understand it is sometimes a difficult time for a person when it comes time to give up the family home. Unlike a normal real estate sale you are not just dealing with the buyers or the sellers of the home. You are dealing with the family dynamics often with several adult members of the family who may have conflicting views with what is best for mom and dad or even with what mom and dad wish to do.
If you are a senior or have a family member who is and is thinking of selling or buying
please give me a call to
Discuss Housing Options for Seniors
Call Kathy at 905.852.6143
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