The province introduced new legislation Monday that will penalize life-lease operators who fail to repay the hundreds of thousands of dollars loaned to them by their tenants and one St. Albert resident says the new bill doesn't go far enough.
Life-lease loan agreements provide cheap monthly payments in exchange for a large loan (typically more than $200,000) that can go toward a building’s mortgage. The loans, also known as entrance fees, are meant to be paid back once a tenant moves or passes away.
But some seniors who moved from retirement buildings owned by the Christenson Group of Companies, that operates a home in St. Albert, have been waiting years to get all their money back, putting the life-lease system under scrutiny.
Service Alberta and Red Tape Reduction Minister Dale Nally tabled legislation to allow leaseholders to collect interest penalties for loans not repaid within 180 days. If the loan is not repayed after that period, interest can accrue and operators can face penalties of up to $300,000 or two years in prison.
Bill 12, the Consumer Protection (Life Lease Protection) Amendment Act, will also add “transparency and disclosure that doesn’t exist today,” Nally, the MLA for Morinville-St. Albert said at a Monday news conference.
“When people are putting this money down, they will know where that money is being held, how it's collected, how it's going to be invested,” Nally said.
But the legislation does not force life-lease operators to put the loans into a trust. A complaint of former tenants of Christenson buildings was they believed their loans were being held in a trust when the money was actually being invested in Christenson’s properties.
“What we heard from all of the operators of life leases in Alberta is that would damage the affordability option in this industry, and so they did not want us to put it into trust for that reason,” Nally said.
When managed appropriately, the life lease system can help provide viable, affordable living space for seniors, Nally said.
The province “wrote the legislation with flexibility” so that in the future, loan repayments could be guaranteed through surety bonds. But surety bonds don’t exist yet for life leases, Nally said.
Anyone who signs a life lease will also be permitted a 10-day cooling-off period to reconsider if they're having second thoughts about handing over the money.
The legislation will not retroactively help leaseholders who have been waiting for their loan repayments.
“Those people are always front of mind when we're talking about this issue,” Nally said, but he could not comment further because of an ongoing legal dispute between former tenants and the Christenson Group of Companies.
One of the Christenson Group’s life-lease buildings operates in Nally's riding.
“I heard first-hand from my constituents about what was happening and the distress that was being created for the seniors,” he said.
St. Albert resident Sandy Clark participated in round-table discussions with Nally. She has been fighting to get her mother’s life lease loan back for more than a year and a half.
Clark’s mother is 21st in a queue of 28 leaseholders awaiting loan repayment from the Citadel Mews East retirement home in St. Albert, and she has been in that spot since August 2022.
Clark called the legislation “toothless.”
The loan that Clark’s mother gave to Christenson Developments started accruing interest 30 days after she moved from her apartment, Clark said. It was part of the agreement her mother signed.
“This legislation actually waters down what she already has,” she said.
But Clark’s biggest issue with the legislation is it still gives life lease operators control of the loan money.
“It’s giving them all the power,” she said. “It doesn't put enough in place to protect these vulnerable seniors.”
Clark’s mother has Alzheimer's that has accelerated to the point that she forgets the names of family and friends.
The 89-year-old, who Clark asked not to be named to protect her welfare, is in failing health and lives in a memory care facility that costs $5,000 a month.
But at least once a week, Clark’s mother asks when the loan will be repaid.
It’s “sad that in the last days, weeks, months, hopefully years of her life, she has to be concerned about somebody giving her $406,000 back,” Clark said.
Without the loan money, Clark isn’t sure she will be able afford the memory care facility long-term.
In meetings with Nally, Clark “was very vocal” about her desire to create rules that would force life lease operators to put loan money into a trust.
Now, she just doesn’t want to see families trapped in the same situation she is currently experiencing.
“[The money] should not be able to leave the building you’re occupying,” she said. “And if that model doesn't work for life-lease operators, then maybe we shouldn't have life-lease options at all.”
Alberta is the third province to introduce life-lease legislation, following Manitoba and Saskatchewan.
