Unit that is already built

If you are considering buying a life lease unit that has already been built, you may want to consult your lawyer or real estate agent to help you obtain and understand the following information.

Sale and resale process

Make sure you understand what model the project adopts. For example, market value price index or declining balance models.

If you are purchasing a life lease interest in the project, make sure you understand any applicable land transfer tax payment requirements.

You should also be clear on the resale process. For example, find out:

  • the percentage of the resale price retained by the sponsor as a transfer fee (also called an administrative fee)
  • if the sponsor retains any other fees from the resale price, such as refurbishing charges.

Monthly expenses

Make sure to confirm:

  • cost of monthly maintenance fees
  • how changes to monthly fees are determined
  • if there is a limit to annual increases

Request a breakdown of what the monthly fees cover, how the fees are calculated and if there are other bills to be paid in addition to your monthly fees.

Reserve fund

Confirm how much money is currently held in the reserve fund and find out:

  • whether a professional outside of your organization was hired to conduct a regular reserve fund study
  • when the last study was conducted, what it found and request a copy
  • whether the last reserve fund study identified needed repairs
  • if the current reserve fund is adequate to cover needed repairs
  • any restrictions on the use of the reserve fund

Financial information

Request a copy of the life lease project budget for the current year and, if available, the next year. Confirm that residents can obtain a copy of the budget each year.

Request the last annual audited financial statements and the auditor’s report on the statements and information about any borrowings of the life lease corporation or sponsor.

Find out the policy on the use of surplus funds and if there are opportunities for residents to provide input prior to decisions on major expenditures, such as:

  • capital repairs
  • replacements
  • remodeling
  • expansions


Find out whether the corporation (life lease project or sponsor) is involved in any legal actions.

Request information on any anticipated substantial changes in the corporation’s assets or liabilities.


Request a document confirming the insurance on the property and confirm details about the insurance coverage for the life lease project, such as:

  • what is covered and what is not covered by the sponsor
  • whether residents need to carry insurance for the contents of their unit (for example, furniture, personal possessions)
  • whether residents need to cover any accidental damages that residents may cause
  • any other types of insurance that residents need to carry
  • if residents will be notified of any changes in the insurance coverage for the building


Confirm which building features the life lease sponsor is responsible for:

  • maintaining
  • repairing
  • replacing

Confirm which building features residents are responsible for, if any.

Rules and regulations

Request a copy of any by-laws or rules, find out how the rules and regulations are developed and learn what input residents have into setting them.

Determine whether a residents’ committee or advisory council is in place, and if residents sit on the board of directors.

Find out what level of input residents have in the operations of the life lease project

Ask for information on the process in place for resolving disputes between residents or between residents and the life lease project’s managers.

Services and programs

Request information on the kinds of services provided at the life lease project. Find out what is mandatory and what is optional.

Ask about the kinds of recreational activities provided.

Getting a mortgage

Loans may be available, but they may be different from a mortgage because the life lease holder does not own the property.

In some cases, lenders may require that the life lease interest be registered on the title of the life lease property.

To find out about lenders in your community that are willing to make loans to life lease purchasers, get in touch with:

  • your current banking institution
  • the life lease sponsor
  • other life lease owners

Home inspections

Many home buyers will hire a home inspector to examine the property and identify any physical problems that may require repairs. A realtor may be able to recommend a home inspector.

Unit that is not yet built

If you are considering buying a life lease unit that is still in development, you may want to consult your lawyer or real estate agent to help you obtain and understand the following information.

Unit description

Request floor plans and a description of the unit. Ask about:

  • square footage
  • parking spots
  • storage lockers
  • security system
  • any other features

Construction schedule

Find out the number of other life lease interests in the building that have been sold and the percentages of life lease interests that remain to be sold before construction can begin.

Ask about the date the sponsor intends to begin construction and whether a full refund of the reservation deposit is available if construction does not start by that date.

Make sure to confirm:

  • the expected completion date for the project
  • the maximum period that a sponsor can postpone the completion date
  • if a full refund of the reservation deposit is available if the project is delayed past the latest-allowed postponed completion date

Ask about the sponsor’s cancellation policy, the penalty for withdrawing and the conditions for accessing the refund.



  • the type of insurance the sponsor carries
  • if the sponsor carries a minimum in-general liability insurance
  • if the builder has all-risk insurance


Confirm the amount and timing of initial deposits. Life lease project sponsors usually request two deposits from purchasers while the project is in development:

  • an initial deposit prior to construction
  • a deposit when the project is ready to begin

Using deposits to fund construction exposes purchasers to the risk of losing their money if the project does not get completed or the developer goes bankrupt.

Before making a large deposit on a life lease:

  • request information on the conditions for the sponsor to use the deposit
  • ask the sponsor to detail how the deposit will be protected

End a contract before construction is complete

Some sponsors may have a voluntary cancellation policy that allows the holder to end the contract before moving in.

Some sponsors do not have this kind of policy in place. In these cases, the holder must wait until the project is built and then sell the life lease.

Cooling-off period

Some life lease sponsors offer purchasers a “cooling-off period" after the buyer signs the purchase agreement.

During this time-limited period, the buyer may change their mind and get back the full deposit.

If there is no cooling-off period, it is a good idea to avoid signing a life lease agreement on the spot.

As with any major purchase, read the agreement closely and consult with family members as appropriate. Consider getting advice from a lawyer who understands life lease housing before making a financial commitment.