Life Lease is a good way to avoid housing market fluctuations

Life Lease residents are neither owners nor renters in the generally accepted sense.They have a leasehold interest in their accommodation giving them a long term right to occupy their suite and to use various common areas and facilities like lounges, workshops and dining rooms.

A Life Lease offers the right to lease a unit until an individual or couple die or decide to move out. It is generally acquired through a single upfront payment. In addition, there is a monthly (and generally modest) fee towards the management and upkeep of the property.

Catering mainly to adults aged 55 and older, this option can provide an opportunity to move into smaller and more affordable housing than freehold homes.

Candidates are often able to use the equity resulting from the sale of their earlier homes for the up-front payment. In many cases, financing is also available for some portion of the cost.

When an occupant moves out or dies, the tenancy generally reverts back to The Project. The occupants or their heirs receive the original upfront payment less about 10% administration fees. The project then resells the right to occupy the unit to another individual or couple meeting the age requirements.

Most are for a specific term of anywhere from 25 to 50 years. In addition, they can be terminated when the residents are unable to live independently. However, many organizations are creating projects that provide for ongoing support and services that enable older people to continue with their lease.

The initial cost of securing a life-lease varies. Factors include:- size of unit; amenities available; location; age of the individual or couple and; amount of initial payment that can be redeemed at the end of the lease by the leaseholders or their heirs.


There are two main types, one is closer to renting and the other closer to ownership. The sponsors of projects can be ‘For Profit’ companies or ‘Not for Profit’ organizations such as charitable, religious or service groups.

In the ‘Rental’ version of life-lease you pay a one time ‘entrance fee' ranging from $30,000 to $50,000 that represents 30% to 50% of the original cost of the suite. Ongoing monthly payments range from $400 to $700 per month to cover maintenance and repair.

In an ‘Ownership’ option, the buyer pays for the entire cost of the unit – usually 25% down and the rest at completion. The monthly fees are lower than the rental model. The owner benefits from open market prices or it can be left to an estate or a beneficiary. Of course, The Project has to approve a new occupant.

The main differences from a regular condominium are that you have to be a certain age to qualify and that the establishment has been designed to cater for your age group.

The life lease route offers flexibility, stability and affordability to a housing choice – especially in the rental style. When a tenant wishes to leave, the only requirement is to give 90 days notice. They are not required to re-sell as in a condominium - that's handled by The Project who have the responsibility to re-lease the rights to the unit.

When the Sponsoring organization is a ‘Not for Profit’ organization there is no motivation to increase the rents. Rental increases are incurred only in response to increase in utilities, property taxes and mortgage interest rates.

Life leases have many variations on the above types. They are complex legal arrangements and you need to investigate the details thoroughly and engage a real estate lawyer to vet the documents.