Life Lease Homes FAQ

How do you know when it’s time to retire?
Helpful advice on planning and thinking about when to retire, from Verve Senior Living.
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Varies widely, depending on the community and its amenities
Generally more affordable than purchasing a similar unit in the traditional housing market due to the not-for-profit orientation of the sponsoring organizations
Minimum 25 per cent deposit usually required at start of construction for most projects; money is needed to build the development, so the deposit is not held in trust, as it would be for a condominium

Communities set their own eligibility rules
Generally, they have a minimum age requirement for residents: in some developments, at least 55; in others, 65 or older. Some life leases separate the owner of the interest and the resident, with only the resident needing to meet the age criterion; this enables family members to purchase the life lease interest for aging relatives
Typically accept both couples and single individuals without dependants, with most projects limiting occupancy to no more than two people per unit
Some cater to a specific segment of the population, such as a cultural or religious group

Life leases are relatively new players in Ontario and no specific legislation governs them
Sponsoring organizations must consider numerous pieces of legislation when structuring their life lease agreement
Be aware of consumer protection issues

What do I know about the sponsoring organization? Have I considered its strengths, credibility and reputation?
Does the sponsor have a proven track record?
How secure is the project in the long term?
What happens to my security deposit if construction is not completed?
What is the redemption formula and is my investment protected?
Does the development have a formal dispute mechanism in place?
What is the philosophy of the retirement community? Do I agree with it?
How informative and helpful is the sponsoring organization in aiding my understanding of the specific details of this particular life lease option?
If I sell, do I get back my initial investment or a percentage of it, or do I receive market value for the unit?
What administration fees or commissions come due when I sell or transfer my unit?
What amenities and supports does the community offer? Does it match my wants and needs?
Do I understand the rights and responsibilities I will have as a resident?
Do I fully understand exactly what I am buying and all the terms of resale?
To what extent can I be accommodated in the community if my physical or mental health fails?
What do my lawyer and financial adviser think about the deal?

Do your research
Talk to a lawyer and a financial adviser, especially if you are considering placing the life lease in the names of your family
Ask lots of questions and make sure you understand all the details of the specific life lease option you are considering
Get answers in writing
Consider the initial lump-sum cost and whether it will affect your entitlement to retain the unit's full market value appreciation at the end of the lease

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