Seniors, families endure extended wait for Alberta life-lease repayments

A group of Albertans representing families who've signed so-called life leases with retirement homes are concerned about access to hundreds of thousands of dollars of their own money.

The life-lease concept isn't new. Instead of renting or buying a unit, one can essentially loan a company a large sum of money that goes toward the building's mortgage in exchange for an apartment in an assisted living-style facility with on-site health supports, sometimes at little-to-no cost.

"For every hundred thousand dollars you put towards your life lease, it reduces your monthly rent down to ... eventually it could be zero," said Karin Dowling, whose mother-in-law lived at Christenson Developments' Devonshire Village in southwest Edmonton until two years ago. "In her case, it did bring it down to zero dollars. She did invest a substantial amount of money. All she needed to pay was the monthly operating costs, which of course over the years did end up growing on top of it.

"But that was really the first thing that kind of brought us to looking into this type of thing. We felt it was a very safe investment for her, a trustworthy company well known for what they do."

That echoed Steve Mackenzie's experience when his mother Mona was looking for a place to live when needing to downsize, choosing Christenson's Royal Oak development in Lacombe.

"Royal Oak was the logical alternative in town. It had a good reputation and we knew some people that were in there, so that would have been a community my mother could join," Mackenzie said. "We went up, had a tour of the facility with the salesperson, looked at an apartment. It all looked good. The life lease was explained to us ... and we thought, 'This is a good place for our mother to spend her final years. Safe, protected environment with no worries."

COULDN'T GET QUICK ACCESS

In recent times, when people are looking to pull out of the arrangement, they're finding they're unable to get relatively easy access to the funds they'd given to the facility's operator.

That's a situation Dowling, Mackenzie and a group of concerned Albertans say they find themselves in today, claiming Christenson has more than 100 families in line for money they're owed, with no guarantee when it will be paid back.

When a resident dies or decides to move, Christenson keeps a portion to refurbish and re-list the unit, and gives what's left back to the family.

Mackenzie, whose mother Mona passed away in January, said his family was expecting "that family nest egg would come back" so it could be disbursed according to her will.

"That's not the case," said Mackenzie, telling CTV News Edmonton that Christenson couldn't repay the loan immediately and that they were put in a queue behind six other families with the Lacombe facility also waiting on life-lease repayments.

"Essentially, the estate is stalled," he said. "We cannot do our disbursements that would normally happen after a funeral. We can’t get our taxes sorted out, we can’t distribute money to the grandchildren.

"It’s a big stress."

Bev Embury, whose mother lives at Bedford Village in Sherwood Park, said current residents enjoy the places in which they live but worry they won't have access to their money for months or even years if they decide to move.

"Somewhere along the line, something’s happened and unfortunately all of these elderly people are holding the bag, and it’s a travesty," she said.

Dowling's mother-in-law has been in Devonshire Village's repayment queue since December 2021.

Her family is owed about $400,000 but has seen just 10 per cent of it repaid so far.

A letter from Christenson at the end of September says there are 44 loans worth $15 million in the queue at Devonshire Village, located in the residential community of Terwillegar Gardens.

'THERE'S NOBODY MOVING BACK IN'

Greg Christenson, president and co-owner of Christenson Developments, says his company can only repay the life-lease loans once the vacant unit is filled.

He said in an interview with CTV News Edmonton that there had been "a relatively normal turnover of people coming in and going out" over the last 25 years.

Then the COVID-19 pandemic arrived, changing that rhythm.

As facilities offering health care, Christenson's buildings were locked down just like long-term care homes and couldn't allow visitors or shared activities -- not exactly the attractive situation seniors expect when moving into their locations.

"It was basically the normal turnover that we experienced (but) there’s nobody moving back in, so that’s where the queue develops," Christenson said.

And the queue develops because the terms of every life-lease contract include a clause meant to protect the company: If too many residents come collecting, they have to wait until Christenson has the money available to pay them out.

"All of those provisions are spelled out in black and white, and there’s a suggestion always that they have documents taken to their lawyer or their accountant because, in fairness, it's complicated," Christenson said, adding that people often assume their money is put into trust and accessible on short notice.

In reality, Christenson said the money is used to build facilities and becomes a part of a building's mortgage.

"Fundamentally, the value is there," he said. "It's going to take work to monetize that through the mortgage process."

Unlike other provinces in Canada, Alberta lacks legislation to govern life leases.

Edmonton-based real estate lawyer Roberto Noce says life leases can work well for some people, but he warns his clients of their shortcomings since Alberta has no consumer protection laws for life leases unlike other arrangements such as for condominiums and rentals.

"We have legislation dealing with rentals, the Residential Tenancy Act, there's a tribunal that deals with disputes relating to landlords and tenants," Noce told CTV News Edmonton. "There's an overarching piece of legislation that protects the interests of both tenants and landlords, but with life leases, there is nothing and so you are simply governed by a contract that usually the person offering the life lease prepares ... as a result, there is nothing else to protect you, and no two contracts are the same. What may be in one person's life-lease agreement may not be in another person's life-lease agreement."

'BOUND BY THE CONTRACT'

Noce said he believes that as long as Christenson is abiding by contracts signed by both parties, the families waiting to be paid out for their life leases will simply have to wait.

"They may feel that they've been treated unfairly, but that's almost irrelevant to the fact that any court of law will be bound by the contract," he said. "If the contract allows a developer to do just this, the fact that you feel unfairly treated may not be enough for you, and the time to have worried about the unfair treatment would have been the time before you signed the agreement. As long as a contract doesn't offend any public policy or anything against the law, a court of law is going to uphold the terms."

Dowling said, however, that the scale of the problem facing the families should take it beyond contract law.

She says she started a Facebook group a few weeks ago that now has more than a hundred members with similar life-lease issues at Christenson facilities.

"It’s not contract law when you’re talking hundreds and hundreds of seniors with the same story, with the same situation," Dowling said. "It needs more than just being told 'go find yourself a lawyer.'"

Christenson maintains there are about 100 families from his company's facilities in queues waiting for repayment.

Families are in talks with lawyers and are hopeful consultations on life leases the Alberta government is performing will lead to change.

In a statement to CTV News Edmonton, Dale Nally, the minister of Service Alberta and red tape reduction who's been assigned by the premier to analyze associations associated with life leases, said he is "currently in the process of actively engaging in discussions and consultations with life leaseholders across the province."

"It is crucial for us to ensure appropriate protections are in place for Albertans," Nally said. "At present, life leases function as a contractual agreement between two parties, and in the event of any disputes, the resolution procedures are dependent on the legal system."

Noce said he wouldn't expect any changes the provincial government could consider to immediately or retroactively benefit people looking to change the process.

"If owners or consumers are genuinely concerned about life leases, their energy would be better spent on lobbying the government to put forward legislation to ultimately protect consumers of the future," he said. "This legislation will not be retroactive but to protect consumers of the future, and that, in my opinion, would be energy well spent."