It might seem like a dream, a guaranteed place to live for as long as you need without the hassle or exceptionally high cost of a home.
So-called “life leases” — contracts in a community for seniors in which they buy the right to live in a place until they die — made headlines recently when a group of Markham retirees protested what they argue are surprise repair costs.
But how exactly do these arrangements work? And are they a good idea?
How it works
According to the Ontario Life Lease Residents Association (OLLRA), an incorporated non-profit that represents the interests of life lease residents, a life lease is purchased through a lump sum.
You don’t pay rent. But instead of buying a property, you are buying the right to occupy a home for life, usually about 50 years. They are targeted at seniors with different minimum age cut-offs. A life lease “sponsor” owns the property.
Life leases in Ontario are mostly owned by non-profits and charitable organizations, said Lois Marsh-Duggan, a 77-year-old member on the executive of the OLLRA.
It’s hard to estimate how many there are in Ontario. But there are almost 700 members of the OLLRA, she said, and most people who sign life leases are older women.
“The purchase is a right to occupy. So we own a right to occupy, ” said Dave Wellock, a fellow member of the OLLRA executive who turns 83 on Thursday.
You sign a contract, not a lease, and residents aren’t covered under the Condo Act or the Residential Tenancies Act.
This can lead to confusion.
“Most people think it’s a condo,” Marsh-Duggan said.
Lawyers, real estate agents and the insurance industry often don’t know about life leases or explain them well, so it’s important to know what you are getting into. But the complicating factor is that “each one of them may have a completely different setup,” said Marsh-Duggan.
How much does it cost?
The life lease lump sums are typically less money than a traditional condo.
At one life lease building in Markham, resident Chloe Efthyvoulos recently told the Star she bought her two-bedroom life lease in 2017 for around $400,000.
However, many life lease residents pay monthly maintenance fees, just like in a condo, which can be high, especially in older buildings.
With housing prices in general so high in the GTA, Marsh-Duggan said she has seen ads for life leases in the region for more than a million dollars.
The benefits
Life leases mean less maintenance. Tasks like shovelling snow or mowing grass are eliminated. There are often social activities such as movie nights or Mahjong.
Gerry Meade, another life lease resident and member of OLLRA, said one of the huge benefits of living in a life lease is that it’s a community just for seniors, who help each other out, getting groceries or taking each other to doctor’s appointments.
This really helps with addressing isolation for them, which is a huge mental health issue.
“There’s a lot of support,” said the 78-year-old.
What if you die?
If you die, whoever inherits your estate would get the life lease interest but not the right to occupy it.
That means they could sell it, but not automatically move in; that decision would be up to the “sponsor,” according to the Ministry of Municipal Affairs and Housing guide.
For example, the child of a 75-year-old life lease holder who dies may not be old enough to qualify for residency in the building. Many have a minimum age of at least 55.
A legal grey area
Life leases have been described as “outside of the law, the wild west or a hot mess,” said Wellock.
That’s why members of the OLLRA are lobbying for legislation on life leases. This already exists in Manitoba and is something that was recently passed in Saskatchewan, said Marsh-Duggan.
Perth-Wellington MPP Matthew Rae introduced a bill called the “Life Lease Act” in 2023. But when the Ontario’s February election was called, it died, he confirmed to the Star in an email.
The risks
In addition to this lack of legal protection, it’s important to note, according to the OLLRA members, that residents don’t have the right to have a say in the running of the community or right to information about it.
The community may have a reserve fund to cover repairs, or not, and older buildings may require more repairs.
At Wyndham Gardens apartments in Unionville, residents told the Star they were shocked to discover that they would be expected to pay hundreds of dollars a month to finance a new roof repair.
What the OLLRA members would love to see in any legislation is “not just the life lease unit holders having access to information, but us having some say in how money is raised and spent,” said Meade.
“We pay the bill, but we have no say of what the bill is going to be or how it’s calculated or spent.”
