What Is Life Lease?

What Is Life Lease?


 

The James Lee Suites is a market value life lease community. A life lease is a legal agreement through which an older individual or couple acquire the right to live in/own a unit in the building for as long as they choose. Upon signing our Right to Occupy Agreement residents have a life time right to occupy their suite and to use various common areas in the building (party room, workshop, rooftop deck). In addition, upon purchase of a suite in the building residents become members of the not-for-profit Corporation that owns and operates the building (through a resident-elected Board of Directors). Life lease residents are neither owners nor renters – they have a leasehold interest in their accommodation.

Life lease projects cater to adults 60 years and older and provide older homeowners with an opportunity to move into smaller, more affordable, easier to maintain homes. In addition, older homeowners typically are able to use the equity resulting from the sale of their earlier home for the up-front payment and purchase of the Right to Occupy Agreement.

Life lease projects are almost always sponsored by community non- profit organizations such as churches and service clubs. The James Lee Suites was built by and is operated by the not-for-profit Stoney Creek Health Association Residential Corporation, Phase II. In fact, community based non-profit organizations are an integral and critical component of the development process for life lease housing. Without their involvement, there would only be a fraction of the number of life lease projects that currently exists. Not only do community sponsors provide valuable resources and services during the development and construction process, their ongoing involvement in the management and operation of the projects they helped to create is also critical

When the life-lease occupant chooses to move out (which can be at any time for any reason) or passes away, the tenancy reverts back to the sponsoring organization. The sponsor then resells the rights to the unit to another individual or couple meeting the age requirements from a waiting list maintained by the community.

There are various types of life leases differentiated mostly by how the redemption value of the initial payment is determined. Certain approaches may be more suitable to different seniors, depending upon such factors as their life expectancy, their equity and their concern about protecting or enhancing that equity. Similarly, some approaches are more attractive to certain providers depending upon their objectives.  The James Lee Suites is a market value life lease community, meaning that the redemption value of the suite is based on the full market value at the time of resale (less charges of 6% to cover redecorating and marketing that go to the Corporation). So, you can sell your suite for any time for any reason, just like you would sell your home.

For more information about life lease housing developments, visit

http://www.cmhc-schl.gc.ca/en/inpr/afhoce/afhoce/afhostcast/afhoid/fite/lile/index.cfm

 or click to open these documents:

What is a Life Lease? (by J. Clark)

Life Lease (by R. Crane)

Life Lease Information (from Canada Mortgage and Housing Corporation)

Life Lease Residential Housing – Is it Time for Legislation? (by J. Clark)