What is a Life Lease Facility?
There are generally three types of Life Lease Projects:
1. A life lease is a rental agreement that includes an initial payment (entrance fee) which is returnable on termination of the lease. The rental lease agreement is between the tenant and a non-profit organization with a monthly rent payment that will be based on the proportionate share of the Operating expenses, Capital expenses and Debt Servicing costs. A Life Lease tenant has access to the lease for life, subject to legislation and regulations under the Life Lease Act and, Residential Tenancies Act and an individual lease agreement. Some form of reimbursement for upgrades in their suite may exist but availability and amounts vary from one facility to another.
Note other types:
2. There are some "for profit Life Lease facilities but they are seen as an exception to the normal structure of the Life Lease concept".
3. Market Value Life Lease Facility is where the tenant owns the assignable lease portion but does not own any part of the real property and may only sell the assignable lease for consideration at fair market value subject to the lease agreement. In most cases the lease owner may renovate the suite subject to building requirements and city codes and by-laws and may require permits before renovating. Market Value gives the tenant the opportunity to sell the assignable lease on the market and recapture the renovation costs and even make a profit. This is based on markets at the time and may also incur a loss if markets are poor. The tenant is usually also responsible for the rent until the lease is sold and assigned to a new tenant.
What a Life Lease Facility is not.
Regardless of whether the life lease is a non-profit rental, or for profit rental or fair market value rental, a life lease is not a condominium. A Life Lease tenant does not own their accommodation or any part of the real property. No interest is paid on the initial entrance fee. Some form of reimbursement for upgrades in the suite may be available. The existence of reimbursements for such upgrades and the amount available varies from one facility to another. Life Leases are governed by the Life Lease Act and the Residential Tenancies Act for the lease and rental aspects of the Project.
What is Life Lease Living?
What are Common Elements?
What does sharing costs mean?
What does rent include?