Life Lease v.s. Condos
As a retiree begins looking to move and invest their equity in retirement housing, they come across a few different options. The most common options are condos, smaller single-family homes, or a Life Lease community.
Some individuals have some knowledge about Condominiums but typically do not know much about Life Lease. Because of this, Sound Lifestyles would like to address the main concerns and questions around these two options.
When I buy a condo, what am I purchasing?
You are purchasing the space in the suite and you get one share in the private 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 owners in the building. These owners are volunteers and may or may not have any experience in managing and maintaining a multi-residential building.
What happens if the majority of owners vote in favor of something?
You are required to pay your share of any expenses of the building, whether you agree with it or not.
What happens if something breaks down in my suite? Does the Condominium Corporation take care of that for me?
No, most Condominium Corporation Reserve Funds only include the common elements of the building. This means that any electrical mechanical items that are connected to just your suite, such as a water heater, are your responsibility. You will need to call a sub-trade and pay out-of-pocket to repair that item.
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 private company that owns the building and property, better known as the Sponsor.
What happens if something breaks down in my suite? Does the Sponsor take care of that for me?
Yes, all electrical/mechanical items are covered under the Reserve Fund in a Life Lease community. This means if something like a water heater breaks down in your suite, all you need to do is call management and the Sponsor will immediately take care of it.
What restrictions are in place when I sell my Life Lease?
There are no restrictions when selling your Life Lease suite. You are able to sell privately or on the open market at any time for the price you want to sell it for.
Why have I not heard of Life Lease before?
Life Lease has been around for over 30 years. It is known throughout Canada and the United States. The reason you may have not heard of Life Lease before now is because it is only for the retirement market, thus most individuals do not come across it until they are actually looking for retirement housing.
Quick Comparison Chart
|Monthly Common Fees||Yes, typically lower fees||Yes, typically higher fees|
|Purchase Price||Market Value||Market Value|
|Age Requirements||Yes, 55+||No|
|Electrical/Mechanical/Plumbing Liabilities||No, covered under reserve fund||Yes, you pay out-of-pocket|
|Physical Ownership||The space in your unit||The space in your unit|
|Renovations to your Suite||Yes, with permission||Yes, with permission|
|Can I sell on the open market?||Yes, but there will also be waiting lists of buyers||Yes|
|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 Life Lease community. Come talk to us so you can better understand all of your retirement options!
Written by Katie Graham