Life Lease v. Condo

L.L. writes:

Dear Paul: I have been hearing a lot about life-lease arrangements. Is a life-lease the same as a condominium?

Paul replies:

Dear L.L.: This is a great question. While there are similarities, there are also some major differences. The following are some of the items to consider in a comparison.

1-Condo – The resident is known as a “unit owner” because they own their suite. It is a form of real estate ownership. Ownership is registered with the Manitoba Land Titles and Personal Property Registry.

Life-Lease – The resident is known as a “tenant” and they do not own their suite, a landlord owns the property. Since the tenant does not own the property, they will normally not be registered with Land Titles.

2-Condo – Since the purchaser owns real estate, they will be able to qualify for a mortgage.

Life-Lease – Since tenants do not own their unit, they may not qualify for a traditional mortgage and need to take out a personal loan.

3-Condo – The condo is governed by a board of directors elected by the unit owners.

Life-Lease – The building is governed by the landlord’s Board of Directors. The Landlord has several reporting obligations to the tenants, and the tenants may have a representative on the Landlord’s Board albeit without voting privileges.

4-Condo – Condo owners pay a monthly fee to the condo corporation to cover the costs of maintaining the common elements. The board, elected by unit owners, set the budget, including the fees to ensure that the corporation’s costs are covered.

Life-Lease – Tenants pay rent to the landlord. Usually, after the first year, the landlord may increase the rent to cover the increased cost of operation subject to the provisions of the Residential Tenancies Act.

5-Condo – The condo is subject to the Condominium Act, the Declaration, the Bylaws, the Rules, and Policies and any legislation that may impact its particular situation. (e.g. Employment Standards Code and Workers Compensation if it has employees)

Life-Lease – The Life-Lease is subject to the Life Leases Act and The Residential Tenancies Act among others.

6-Condo – The Condo owner has purchased their unit, might have a mortgage on the property, pay municipal taxes, and common element fees. If the owner wants to leave, they are responsible for the sale of their unit at market values.

Life-Lease –The tenant may have a choice of financing options depending on the Life-Lease project.

  1. Upon the purchase, the tenant will make an initial deposit and pay the full amount for the particular apartment usually within 30 days.
  2. Life-Leases normally guarantee that the tenant has a right to occupy the apartment until they decide to move out or until their death. Depending on the agreement, they (or their estate) will be refunded their initial investment. Their next of kin may be able to take over the lease if the agreement signed with the Landlord allows.
  3. Depending on the agreement with the Landlord, the refund may be with or without interest, may be at current market values for the area, or the tenant may be responsible to find a suitable new tenant.

There are many more items to consider. I would urge anyone wanting more information to have a look at The Life Lease Housing Resource Guide – Questions and Answers for People Considering Life Lease Housing at http://www.mah.gov.on.ca/AssetFactory.aspx?did=10455 While this Guide was written for the Ontario market, it has some very useful information.

None of the above should be considered legal advice. This is a complex matter and anyone considering a Life Lease should consult a lawyer before signing anything. Thanks for the question. 

This Post Has One Comment

  1. Eric Dyke

    Hi Paul. Here’s a question that I’ve seen come up from time to time with condos. Some condos have titled parking and some are assigned. My understanding is they titled means you own the stall and receive a separate property tax bill accordingly while assigned parking is at the description of the board. Which leads to another question. If a person becomes injuries/paralyzed such as myself. How would handicapped accessible parking be dealt with

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.