Graeme Marsham in Edmonton, on June 17. His mother left him $280,000 two and a half years ago. Mr. Marsham is still owed $194,000, plus interest, because most of her money is tied up in what’s known as a life lease.Megan Albu/The Globe and Mail
Dorothy Marsham left her son $280,000 two and a half years ago. Take care of my granddaughter, she told him.
Her granddaughter, Jamie, had a rare form of epilepsy. The violent seizures started when she was 23 years old. She couldn’t work. And her medical bills came to $800 a month, sometimes more.
“We were wracking up debt like you wouldn’t believe,” said Graeme Marsham. “There was an awful lot of stress. But I always had in the back of my mind that if something happened to my mom, we’d have the condo money. We’ll pay everything off.”
Jamie didn’t get the money. She died from a violent seizure last December. Mr. Marsham is still owed $194,000, plus interest, six months later.
Most of Dorothy Marsham’s money is tied up in what’s known as a life lease. She neither rented nor owned the apartment she lived in. Instead, like a growing number of Canadian seniors, she sold her house and put the proceeds into an upfront payment on an apartment she could live in for the rest of her life. Ms. Marsham bought in Westmount Village, a luxury retirement building in Edmonton owned by Christenson Communities. Her contract guaranteed her the right to live in the apartment until death.
Ms. Marsham’s deal was a ‘market value life lease.’ On her death her son would inherit the lease and could then sell it back to Christenson Communities, which owns nine retirement communities offering life lease tenures.
For Ms. Marsham, a life lease seemed to have numerous advantages: it was cheaper than buying, more stable than renting and she could age-in-place, all while still leaving behind something for her family.
But that’s not what happened.
Her contract contained a clause: Should 6 per cent of tenants enter the market at the same time, those wanting to sell their holding would go into a repayment queue – a queue with no payback timeline, according to a copy of the contract provided to The Globe and Mail by Alberta Life Lease Protection Society, an advocacy group working on behalf of 212 leaseholders at Christenson Communities.
The Marshams are one of the first in line in the repayment queue. But neither they nor any of the other 182 people in the queue have been paid back in full. According to the ALLPS, Christenson Communities owes a total of more than $60-million to leaseholders. The company has a further $140-million in active life leases spread across 620 agreements.
Mr. Marsham has received some money, but still has $194,000 owed to him. He does not know when he will get the full sum.
“The life lease model provides affordability for seniors,” Christenson said in an e-mail response to The Globe’s request for an interview. “Due to unforeseen circumstances, the life lease queue developed and grew. Christenson is not in breach of any contracts, and we fully intend to make payments over time to those waiting in queue. We continue to work diligently and collaboratively on a solution that best serves our current, future and previous residents along with our organization.”
Part of the difficulty is that life leases have until fairly recently fallen into a legislative grey zone, being neither rental nor ownership. The contract is the only legal framework.
On May 16, Alberta brought in the Consumer Protection (Life Lease Protection) Amendment Act “to protect consumers who enter into life lease agreements and to add consistency to contracts with life lease housing operators,” the government said in a statement replying to a request for comment from The Globe. The legislation, “provides firm payout timelines, enforcement provisions, and the requirement that life lease contracts include mandatory disclosure terms, including how life lease entrance fees will be collected, used, and returned, and a cooling-off period after an agreement is signed.”
But the new legislations won’t be grandfathered in to help people such as the Marshams and, although the act calls for penalties for fees not repaid within 180 days, it says those regulations are still “under development.”
Manitoba is the only other province to have specific life lease legislation. This legislative void could have ramifications for others, especially as Canada’s population ages and a housing crisis persists.
“People often have very little control over what will happen and far fewer rights than they would ever imagine” said Laura Tamblyn Watts, chief executive of CanAge, a national seniors’ advocacy organization.
According to Ms. Tamblyn Watts, life leases have been around for decades. They are most common with non-profits who might wish to secure financing for new buildings.
Ms. Tamblyn Watts sees them as a creative solution for seniors who want to sell their houses, move somewhere smaller and age in place. The apartments offered by many life leases are cheaper than condos and – for a monthly fee – include amenities and services that can be scaled up. They are cheaper than retirement homes, which cost an average of $3,075 a month, according to Financial Consumer Agency of Canada.
They also give seniors more control and predictability. Unlike a rental, leaseholders are not subject to rising costs or possible eviction and – should the senior opt for the market rate model of a life lease – they could turn a small profit which would be passed onto their family.
This is what tempted Kim Nelson and her parents to opt for a life lease in 2019.
Ms. Nelson’s father had Alzheimer’s disease and was deteriorating quickly. They needed supportive living. So they sold the family home and her father moved into a two-bedroom condo in Bedford Village, another Christenson life-lease property in the Edmonton suburb of Sherwood. The apartment life lease cost $546,000.
Her father passed away a few months after moving in, but the apartment continued to be home for her mother. The staff were caring and supportive and her mother enjoyed the freedom of living alone, without being isolated.
However, in June, 2023, Ms. Nelson received a letter saying that supports – including nursing care – would expire in September. The company also wanted all tenants to switch to a straight rental agreement – without immediately returning the upfront payment. Ms. Nelson was also aware that the repayment queue was growing and wanted to get in line. She decided to terminate the life lease. Her mother was given six weeks to find a new home.
“My mom was so stressed,” said Ms. Nelson. “It was terrible. At this point her life, nobody needs that.”
The Nelsons are still owed around $500,000. They have not heard when they will be paid back. In the meantime, Ms. Nelson’s mother is spending her remaining retirement savings at another facility.
“It’s almost unbelievable to me that in this day and age we abuse our seniors like this,” said Ms. Nelson.
Ms. Tamblyn Watts worked on recommendations for legislation covering life leases for the British Columbia Law Institute in 2005. The recommendations included that life leaseholders should have the same protections as renters, giving residents rights to an adjudicative tribunal. Manitoba’s legislation, passed in 1998, does so.
B.C. failed to pass its legislation and Ontario, which considered some legislation in 2009, also dropped it. New legislation was tabled in February but has not moved past first reading.
“This legislative gap makes people, often vulnerable seniors, even more vulnerable,” said Ms. Tamblyn Watts.
Randi Wilding’s mother is another of the more than 200 people holding life leases at Christenson buildings. She currently lives at Devonshire Village, on the southern outskirts of Edmonton.
In 2016, Ms. Wilding’s parents sold their house and poured the proceeds into a $450,000 life lease.
Ms. Wilding’s mother, 99, is now in the hospital. When she is discharged she will need more care than what can be offered at Devonshire Village. But Ms. Wilding says she feels trapped. If she terminates the life lease she has no idea when she will get the money back, but she will be forced to pay for expensive eldercare elsewhere.
“What are we going to do?” asks Ms. Wilding. “You can’t move out and into somewhere else because she’s got half a million dollars tied up in that place.”
Mr. Marsham says he is exhausted by both his daughter’s long illness and the difficulties retrieving the money Christenson owes him and has decided to retire. He wishes his wife – a nurse – could do the same. It’s what his mother would have wanted, he says. But until the money comes through they have no choice.
“All we’re doing is kind of coping.”