Life Lease Housing
What is Life Lease Housing?
The better lifestyle option for independent living!
Life Lease is a form of real estate tenure (conditions under which a land or building are held or occupied) that has been in existence throughout North America and Europe for many years, and in Canada for nearly 50 years. There are an estimated 150 Life Lease projects now operating in Ontario, representing some 12,000 residential suites. These communities are geared to mature adults and seniors.
Under a Life Lease arrangement there is a single building sponsor of the property, who is responsible for operating and maintaining the property and buildings in accordance with an agreement signed with the residents. The residents purchase an exclusive interest in the suite of their choice from the property owners, and have the right to sell or transfer this interest when they wish to vacate their suite. This is similar to purchasing a suite within a condominium; however, the resident is acquiring a Life Lease interest as opposed to a freehold interest. Also, similar to a condominium, residents share in the use and operating costs associated with the common areas and amenities. A modest transfer payment is made to the building sponsor when a suite is sold. At the heart of every Life Lease community is an agreement or contract with the building sponsor which governs how the residential suites are acquired, subsequently sold or transferred, and the ongoing relationship and responsibilities of both the building sponsor and the residents.
In Ontario, there are three primary Life Lease structures, the most common and popular model being based on the market value of the residential suite. Under this model, residents acquire their Life Lease interest based on the market value of the suite, and sell or transfer this interest at the market value when they wish to sell, like buying a single-family home or condominium. The Life Lease agreement used at The Gallery is based on market value, has no termination date, and the interest can pass to a resident’s family upon death. Therefore, residents can protect their investment and earn a return similar to the equity growth in a home or condominium.
What are the benefits of Life Lease Housing?
There are numerous benefits of living in a Life Lease community. The most important benefit is that residents retain the equity in their home or suite – unlike typical ‘retirement’ communities where residents pay a monthly rent with no opportunity to preserve their equity. When the suite is sold, the equity (the appreciated value of the property) belongs to the resident or their estate. In addition, the Life Lease structure ensures residents that the community will remain age-exclusive and focused on mature adults and seniors. Life Lease is more about creating a community of people with shared interests and values than it is about bricks and mortar. Life Lease communities are designed for active adults with similar interests and backgrounds enabling them to fully enjoy their retirement years without the headaches associated with maintaining a single-family home.
Life Lease developments also have more extensive amenity areas than condominium projects which creates a stronger sense of community and provides more age-specific programs and activities for residents. As residents age, some Life Lease buildings may offer support services, allowing residents to maintain their independence for a longer period. The Gallery does not have such a support service option. These communities are designed to enhance the resident’s quality of life through facilities such as wellness and fitness centers and easy-living features such as wider doorways, walk-in shower stalls with molded seats and grab bars.
In summary, under a Life Lease arrangement, residents have exclusive use of their suite, an opportunity for market value return, and many of the same benefits as traditional home ownership. Life Lease enables active adults and seniors to acquire a suite and live in communities designed to meet their changing needs.