Here’s an excerpt:
In a life-lease project, an older individual or couple acquire the right to lease a unit until they die or decide to move out. They acquire the life lease through a single upfront payment. In addition, they are responsible for paying a monthly-and generally modest-fee towards the management and upkeep of the property.
There are various types of life leases, distinguished mostly by how much initial payment is required to buy in, and how much is redeemed/returned upon moving out or death.
Life-lease projects cater mainly to adults 55 years in age and older. They particularly provide older homeowners with an opportunity to move into smaller and more affordable housing than their existing homes. The older homeowners typically are often able to use the equity resulting from the sale of their earlier homes for the up-front payment. In many cases, financing is also available for some portion of the value of the life lease.
Life-lease residents are neither owners nor renters. They have a leasehold interest in their accommodation, which is defined in a contract, and giving them the "life-time" right to occupy their suite and to use various common areas and facilities like lounges, workshops and dining rooms.
When the life-lease occupant moves out or dies, the tenancy generally reverts back to the sponsoring organization. The occupants or their heirs receive the amount redeemable at the end of the lease. The sponsor then resells the rights to the unit to another individual or couple meeting the age requirements. In addition, many non-profit life-lease sponsors will give preference to a constituency served by their religious, service or community organization.
For the full details, please visit CMHC.