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Life Lease FAQ

The Life Lease Concept

  1. What is Life Lease Housing
  2. What are the benefits of Life Lease Housing?
  3. Who can live in a Life Lease project?
  4. Does Life Lease really mean for “life”?
  5. Who sponsors and finances a Life Lease project?
  6. Who actually owns and operates Georgian Village?
  7. Can I register my Life Lease Occupancy Agreement on title?
  8. Does the new home warranty program apply to Life Lease?
  9. Do Life Lease projects come under the Condominium Act?
  10. Was my suite customized?

Purchase and Sale

11.  Do I have to pay Land Transfer Tax on closing?
12.  What happens to our Life Lease interest upon death?
13.  Can I purchase a suite in the names of my children?
14.  How much does my estate or I have to pay on sale or transfer?

Management and Operations

15.  Are pets permitted?
16.  What is the Monthly Occupancy Fee and is G.S.T. included?
17.  What happens to my Monthly Fees when operating costs increase?
18.  Who is responsible for management and maintenance?
19.  Who is responsible for repairs within my suite?
20.  Who is responsible for repair and replacement of appliances?

Project Details

21.  What is the heating and cooling system of the Life Lease suites?
22.  What is the heating and cooling system of the Life Lease garden homes?
23.  What are the ceiling heights?

The Life Lease Concept

1. What is Life Lease Housing?
Life Lease is a form of real estate tenure that has been popular throughout North America and Europe for many years. There are now over 125 Life Lease projects operating in Ontario. When this concept came to Canada over 35 years ago, it was modeled similar to condominiums; therefore, the name “Life Lease” is somewhat misleading. In fact, the lease being used at Georgian Village has no termination date and the Life Lease interest can pass to a resident’s family upon death. The family may then elect to retain the suite or sell it at market value.

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2. What are the benefits of Life Lease Housing?
The benefit of the Life Lease model is that projects can be controlled by the non-profit or charitable sponsor to ensure an age-exclusive, mature adult community. Life Lease is more about creating a community of people with shared interests and values than it is bricks and mortar. Projects are designed for active adults with similar interests and backgrounds to fully enjoy their retirement years without the headaches associated with maintaining a single family home.

Life Lease buildings have more extensive amenity areas to create a stronger sense of community. As residents age, support services can also be provided allowing them to maintain their independence for a longer period. It is also designed to enhance the resident’s quality of life through facilities such as on-site wellness centres, and easy-living features such as wider doorways, walk-in shower stalls with moulded seats and grab bars.

Under a Life Lease arrangement, residents have exclusive use of their suites, an opportunity for market value return, and many of the same benefits as traditional home ownership. The Life Lease interest also provides a resident with shared use, in common with other residents, of all common areas and building amenities.  Residents share in the ongoing operating costs through payment of a Monthly Occupancy Fee, similar to a condo fee.

When a resident wishes to sell his or her Life Lease interest, he or she receives the market value of the suite less a transfer and administrative fee. Purchasers are able to protect their investment and earn a return similar to the equity growth in their home or condominium. Life Lease enables active adults to purchase a place to live in communities designed to meet their changing needs.

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3. Who can live in a Life Lease project?
The actual age criteria may differ slightly from project to project with most projects falling into the 60 years of age and older category. Georgian Village has also established its age requirement at 60 years of age or older. In cases where one spouse or co-owner is not yet of age, the spouse of the co-owner is able to reside in the suite.
However, he or she can only appear on the Occupancy Agreement as a “Purchaser” until attaining the age of 60 years. This occupancy restriction is intended to maintain a harmonious environment for mature adults and create a stronger, more supportive community. Children may purchase suites for their parents, or even invest in a suite for their future, however, they may not occupy it until they reach the prescribed age.

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4. Does Life Lease really mean for “life”?
No. The Life Lease model established for Georgian Village has no termination date within the agreement. The lease can, therefore, extend in perpetuity. Upon the death of one spouse or co-owner, the Life Lease interest automatically transfers to the surviving spouse or co-owner at no cost. Upon death of the second spouse or partner, the Life Lease interest automatically transfers to his or her estate. The resident’s Will may then prescribe the devolution of the suite. The beneficiary may retain the suite as an investment, and lease to another whose age qualifies the person for residency until the beneficiary’s retirement, when the beneficiary may decide to take up residency or, the beneficiary may sell their Life Lease interest at market value.

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5. Who sponsors and finances a Life Lease project?
Life Lease sponsors have included churches, cultural organizations, nursing and retirement home operators, hospitals, private developers and municipalities. These sponsors develop the project and provide the necessary equity and financing, and, in most cases, continue to own and manage the project. The financing for construction and subsequent operation ultimately comes from the people who purchase Life Lease interests in the development. However, it is the sponsor that creates the vision and incurs the financial risks involved with development. Once the residents have taken occupancy of their suites, they pay a Monthly Occupancy Fee to share the cost of operating and maintaining the common areas, grounds and overall building.

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6. Who actually owns and operates Georgian Village?
Georgian Village is owned and operated by the County of Simcoe.

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7. Can I register my Life Lease Occupancy Agreement on title?
Yes, in fact, we encourage purchasers to register a “Notice of Agreement” on title to Georgian Village property. Registration will ensure that your interest in the project is formally acknowledged on title and, once registered, you will receive notice of any future easements, encumbrances, liens, financing, etc. which might affect the property. Therefore, registration will protect your investment similar to registering a deed on title to a house or condominium.

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8. Does the new home warranty program apply to Life Lease if purchased new?
No, the New Home Warranty Program or Tarion only applies to freehold and condominium homes. However, Georgian Village will require that the general contractor and sub-trades supply a two year warranty, as well as warranties of up to 5 years on major components such as roofing, services, etc. to provide protection for purchasers. In addition, extended manufacturer’s warranties are available on many of the building components for up to 10 years.

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9. Do Life Lease projects come under the Condominium Act?
No. However, Georgian Village has incorporated many provisions outlined under the Act into the Life Lease Occupancy Agreement. The Ontario Ministry of Municipal Affairs and Housing has been monitoring the Life Lease housing industry and reported at the Ontario Bar Association in May 2003, that the industry is deemed to be self-regulating. A sound Life Lease Occupancy Agreement should incorporate adequate consumer protection in the absence of provincial legislation. The Life Lease Occupancy Agreement being used at Georgian Village is now being utilized by over half of the projects in Ontario and incorporates the disclosure and protection provisions recommend by the Ministry of Municipal Affairs and Housing.

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10. Was my Suite Customized?
Georgian Village offered premium finishes and specifications so that purchasers would not have to upgrade to achieve quality.  Each purchaser was provided with a wide selection of quality carpet, cabinetry, flooring and paint colours to choose from.

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Purchase and Sale

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11. Do I have to pay Land Transfer Tax on closing?
Pursuant to the provisions of Ontario Regulation 88/04, filed April 2 2004, purchasers of Life Lease interests are now exempt from the payment of land transfer tax, provided that the Life Lease corporation is a non-profit corporation or a registered charity, and the purchaser is acquiring the Life Lease interest for the purpose of his or her occupancy of the suite as his or her principal residence or the principal residence of his or her spouse, parent or co-owner. Life Lease suites acquired for investment, to be leased to other individuals, are not exempt. You can view the Ministry’s commentary in Land Transfer Tax Bulletins by click on this link.  Since Georgian Village will be owned and operated by Simcoe County, purchasers of Georgian Village qualify for an exemption.

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12. What happens to our Life Lease interest upon death?
Upon death, your market value Life Lease interest transfers to your estate, which may decide to retain your interest and suite, or transfer or sell it to another party at the market value. It is up to your estate to establish the selling price and negotiate the final transfer, the same as owning a home or condominium. The Placement Co-ordinator for Georgian Village will assist in every way possible to find a suitable purchaser for your Life Lease interest when you wish to sell, and the County of Simcoe will maintain a waiting list of interested buyers.

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13. Can I purchase a suite in the names of my children?
Yes, you can note anyone you wish on your occupancy agreement as the “Purchaser”, however, only those noted “Residents” can occupy your suite. Whoever is noted as “Resident” must also meet the age requirement of 60 years or older. You may wish to place the occupancy agreements in the names of your children with yourselves as the “Residents” thereby avoiding the Ontario estate administration tax (“probate fee”). A Life Lease unit qualifies as a “principal residence” for capital gains purposes under the Income Tax Act, and for that reason, purchasers should consult their estate planning advisors before adding the names of children to their occupancy agreements. It is important to note that the savings that a purchaser attempts to realize in reduced probate fees by adding their children as joint tenant purchasers may be outweighed by adverse income tax consequences to the children unless appropriate legal structures are put into place. Please consult with your Lawyer or Accountant if you wish to pursue this option.

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14. How much does my estate or I have to pay on sale or transfer?
Purchasers may sell or transfer their Life Lease interest at any time at a selling price established by them. Georgian Village will maintain a waiting list of potential buyers or purchasers may arrange for their own buyer. Paragraph 27.2 of the Life Lease Occupancy Agreement stipulates that Georgian Village will receive a 10% transfer fee if a buyer is accessed through the County’s waiting list, and 5% if the resident is required to locate their own buyer.

This fee, which is similar to a real estate commission, will provide Georgian Village funds to coordinate the transfer, including legal fees, as well as funds for ongoing marketing of Georgian Village. This fee is paid from the closing proceeds received by the selling resident who retains the remaining 95%. Unlike a typical real estate transaction, it is Georgian Village that must coordinate the transfer of the Life Lease interest on behalf of the seller, and deal with the purchaser and/or their Lawyer to ensure all documentation is provided. Any surplus portion of the administration and transfer fee becomes an asset of Georgian Village and can be expended on other facilities and services for seniors as dictated by its mandate.

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Management and Operation

15. Are pets permitted?
Pets of certain types and sizes are permitted in Georgian Village and a Pet Policy has been adopted by Georgian Village to control the housing of domestic pets. Any resident wishing to house a pet should request a copy of this Pet Policy and must agree to abide by the terms set out in this Policy.

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16. What is the Monthly Occupancy Fee and is G.S.T. included?
Each purchaser pays a monthly occupancy fee based on the size of their selected apartment suite or garden home. The Monthly Occupancy Fees includes G.S.T.

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17. What happens to my Monthly Fees when operating costs increase?
The Monthly Occupancy Fees are set at the break-even cost of operating Georgian Village. The actual operating costs are reviewed annually by Management and the County of Simcoe Finance Department, and any adjustments will be submitted to the Residents’ Association for input.

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18. Who is responsible for management and maintenance?
The Monthly Occupancy Fee paid by each purchaser covers the cost of administration and maintenance which will be overseen by Georgian Village. A Replacement Reserve Fund (minimum 15%) is also established within the Occupancy Fee to cover the replacement of major capital building components. Repairs, maintenance and replacement of finishes and fixtures within each suite are the responsibility of the purchaser.

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19. Who is responsible for repairs within my suite?
Purchasers and residents are responsible for all repairs and maintenance within their suite, except those components that are common to the building (i.e. exterior doors, windows, fan-coil units and plumbing systems, etc.). A Replacement Reserve Fund has been established within your Occupancy Fee to cover the replacement cost of all common building components.

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20. Who is responsible for repair and replacement of appliances?
Although appliances are included in the price of your Life Lease suite, purchasers are responsible for repairs and maintenance associated with these appliances. All appliances are owned by the purchasers and can be transferred or sold with the suite or upgraded at the purchaser’s discretion.

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21. What type of heating/cooling system are in the apartment suites?
The building heating system uses two (2) high efficiency condensing boilers, located in the mechanical penthouse, which are up to 97% efficient. Heating is then distributed to each unit which has perimeter radiant heating systems with individual control to allow residents to set the temperature of each room. Each unit also has its own central air conditioning unit to provide all cooling requirements.

Fresh air in the building is constantly delivered to the corridors from a high efficiency, low energy system located in the mechanical penthouse which recovers the heat from the building exhaust systems. The fresh air is tempered to provide adequate cooling for the corridors without making them cold.

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22. What type of heating/cooling system and water heaters are in the garden homes?
The Garden Homes have been designed with a cost-effective high efficiency equipment, which is Energy Star® compliant. Heating and cooling is achieved through the use of conventional residential systems including a furnace and air-conditioner. The furnace is made complete with a low speed, continuous fan setting to provide maximum comfort combined with high efficiency. The air conditioning unit uses chlorine-free R410A refrigerant, meeting all requirements for ozone and climate protection.

Garden home ventilation is a combination of operable windows and a heat recovery ventilator (HRV). The HRV draws fresh air from outside and exhausts stale air from within the home. The HRV simultaneously recovers heat from the exhaust air and preconditions the fresh outdoor air to maximize energy efficiency. The HRV controls wintertime condensation that can damage windows, insulation and furniture.

Tankless hot water heaters are utilized to supply a consistent flow of hot water for as long as it is needed. Once the tap is turned off, the unit shuts down, saving the cost of heating water you are not using. Instead of keeping a tank full of hot water, only the water required is heated.

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23. What are the ceiling heights?
The ceiling height in both the Garden Homes and the Life Lease Suites is 9' in the living/dining and bedroom areas. It is generally 8' in the kitchen and bath areas.

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