Book 1 - Appraisal Institute of Canada

Possiblevaluationissues withLifeleasehousingBy Jane Londerville, AACI (Hon), Associate Professor and Interim Chair,Marketing and Consumer Studies Department, University of Guelphife lease housing is a relativelynew form of tenure in Canada, but a rapidlygrowing one in Ontario and the westernprovinces. It is widely used by the non-profitsector to increase the range of housing optionsfor the 55+ market. A life lease is a legalagreement that permits the purchaser to occupya residence for life (or until they no longer wantto or are capable of living there) in exchangefor an initial lump sum payment. They are alsoresponsible for monthly payments to cover theongoing operating expenses (similar to a condofee) and, in some cases, rent, depending on thesize of the initial payment.Life lease is a hybrid type of tenure. In someaspects, life lease holders appear to be owners.They are responsible for repairs to their ownunits, providing their own appliances and payingthe property taxes associated with their unit. Themonthly maintenance fee they pay is used tofund operating costs for the common areas andto put aside a reserve fund for capital replacements.In other ways, life lease residents are likerenters. The operating budget is set by the ownerof the building and may be presented to theresidents, but they have little input into how thebuilding is managed. Most complexes in Ontarioare set up as condomnium corporations, but theBoard of Directors is chosen by the developer andfrequently does not have any residents on it. Theowner of the building itself is still the developer,since the residents have only purchased the rightto occupy a unit, not title to the unit itself.Residents of life lease developments areactive and healthy seniors; these are notcomplexes for seniors who need help withdaily living. There are not extensive servicesoffered in most complexes (no meals or healthprofessionals on staff usually). If residentseventually need some additional personal careto function in their unit, they need to hire thisassistance privately.click here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 39