Compare Life Lease and Condos
Let’s compare Life Lease and Condos. There are similarities and differences that all retirees should understand before purchasing either.
As a retiree begins looking to move into retirement housing, they come across a few different options. They can purchase a condominium, smaller single-family home, or a suite in a Life Lease community.
Some individuals have knowledge about Condominiums but typically do not know about Life Lease. Sound Lifestyles would like to address the main concerns and questions around these two options.
The majority of Life Lease communities in Ontario today are Market Value Life Lease. When Life Lease first came out 30 years ago, there were 4 other models – Price Index Life Lease, Fixed Value Life Lease, Declining Balance Life Lease, and Zero Balance Life Lease. Those original 4 models are rarely used today.
For this article we are comparing Market Value Life Lease and Condominiums.
Condominium FAQs
When I buy a condo, what am I purchasing?
You purchase the space in the suite and one share (and the liability of that share) in the company that owns the building and land. Better known as the Condominium Corporation.
What is a Condominium Corporation?
A Condominium Corporation is run by an elected group of unit owners. They are volunteers and may or may not have any experience in managing a multi-residential building.
What happens if the majority of condominium owners vote in favour of something?
You are required to pay your share of any expenses of the building, whether you agree or not.
What happens if something breaks down in my suite? Does the Condominium Corporation take care of that for me? Does the property manager help me with sourcing service providers?
No, most Condominium Corporation Reserve Funds only include the common elements of the building. Most condominium property managers only manage the common elements. This means that most items that are connected to just your suite, such as a water heater or air conditioner, are your responsibility. You will call the technician and pay to repair that item, just like you would in a single-family home.
What happens if there is not enough money in the condominium reserve fund to pay for a major replacement?
If the condominium reserve fund has not been managed properly, the current owners must come up with that cost. For example, if there is only 75% of the funds available to replace all of the windows, the current owners must come up with the remaining 25%.
Do condominium owners have control on what the monthly common fees are?
No, monthly common fee costs are what they are. Any third-party service providers, such as a snow removal company, have set fees that condominium owners can’t control. Condo owners are at the mercy of the majority so even if you don’t agree with an item, you are still have no choice in the matter. One vote is only one vote.
Market Value Life Lease FAQs
When I buy a Life Lease, what am I purchasing?
You are purchasing the space in the suite and have no liabilities with the building and property. The Sponsor owns the building and land and assumes the liability of the community.
No liability means I have no vote. I don’t like that and want to have my vote.
Market Value Life Lease communities are designed specifically for retirees. The stress of home ownership is reduced for owners. The Sponsor, who is invested long-term, is there to manage those major decisions. Owners do have opportunities to vote on minor issues, such as who to hire for landscaping etc. Major decisions are left up to the professional Sponsor. And be honest with yourself, do you have the knowledge or experience to source technicians when the roof needs to be replaced?
What happens if something major needs to be replaced in my suite? Does the Sponsor take care of that for me? Will the Sponsor help me through the process?
Yes, some items are covered under the Reserve Fund in a Life Lease community and management is there to help owners. If an air conditioner needs to be replaced in your suite, all you need to do is call management. The Sponsor will immediately take care of it. You do not have to source any technicians. The property manager is there to monitor the situation to make sure things go smoothly.
What happens if there is not enough money in the reserve fund in a Life Lease community?
Sound Lifestyles can only speak about their own communities in regards to reserve funds. All of Sound Lifestyles’ reserve funds are 100% funded and managed correctly. Owners have less risk in having to pay out-of-pocket. Since Sound Lifestyles is invested in all of its communities long-term, it has incentive to ensure all reserve funds are managed correctly.
What restrictions are in place when I sell my Market Value Life Lease?
There are no restrictions when selling your Market Value Life Lease suite. You are able to sell privately or on the open market at any time. You also have control on selling price. Sound Lifestyles is also there to guide you and provide suggested pricing.
What happens if I pass away? Does my Market Value Life Lease ownership dissolve?
No, if an owner passes away, the suite becomes part of that owner’s Estate and can be sold through the Estate or placed in a will, just like a condo suite or single-family home.
Quick Comparison Chart
| Item | Market Value Life Lease | Condominium |
| Monthly Common Fees | Yes | Yes |
| Purchase Price | Market Value | Market Value |
| Age Requirements to live there | Yes, 55+ | No |
| Individual liabilities in the suite | Most covered under reserve fund | Most pay out-of-pocket |
| Physical Ownership | The space in your suite | The space in your suite |
| Renovations to your Suite | Yes, with permission | Yes, with permission |
| Reserve Fund models | 100% funded | most 75% funded |
| Can I choose when and what I sell it for? | Yes | Yes |
| Can my grandkids spend the night? | Yes | Yes |
Sound Lifestyles Ltd. is committed to educating people about the benefits of investing in a Market Value Life Lease community. Come talk to us so you can better understand all of your retirement options!
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