Refund Fund

   This fund is established using a portion of the Entrance Fee (see Entrance Fee) and is put in the control of a trustee. The trustee uses it to reimburse the tenant or the tenant's estate in the full amount of the Entrance Fee upon termination of the lease. The size of the fund is established as a multiple of the Entrance Fees that may be required for reimbursement at the same time.

    This fund acts as a revolving fund since it is expected that tenants coming into the complex will match the outgoing reimbursement requirements. By legislation, the sponsor has up to 3 months after lease termination to make this reimbursement. So long as the Life Lease building and life style is a desirable rental facility, and units do not remain empty for long periods of time, the Refund Fund will be able to easily meet its obligations.