Construction Financing

   The following information represents the usual manner in which design and construction financing is developed for a Life Lease complex. Variations may occur and potential sponsors should investigate this component thoroughly before proceeding. Potential residents should enquire further as to the specific financial arrangements of a new Life Lease including budgets, mortgages, rental rates, reserve funds, replacement funds, refund funds (for entrance fee refunds on leaving), loans and any other financial obligations that may apply. 

   Generally, the Entrance Fee required of all future Life Lease occupants is a percentage of the construction costs of the unit to be leased - not the total building, just the individual suite. Ask the sponsors as to the actual % being used in their plans. A portion of the total of all the deposits is used to leverage a mortgage (or mortgages) to account for the balance of the construction costs. A Refund fund is established using the initial deposits so that tenants can get their entrance fee refunded on termination of the lease. Deposits are required, by Provincial regulation, from a certain number of the leasing suites before construction can begin.