Province to tighten life-lease regulations

Alberta's UCP government introduced new legislation Monday to protect seniors from future housing contracts that have already forced some to wait for repayments of hundreds of thousands of dollars.

Under the life lease model, which is currently unregulated in Alberta, residents pay a large entrance fee up front to move into a unit with more affordable monthly costs. When they pull out of the lease, they're supposed to be refunded their mortgage-sized entrance fees, minus the cost of preparing the unit for a new resident.

But, with a growing queue of lease holders who are owed repayments, the model has prompted pleas for action, including from the newly-incorporated Alberta Life Lease Protection Society. The society said some seniors and their families have been waiting for almost three years for repayments of up to $500,000 each.

If passed, Bill 12, the Consumer Protection Life Lease Protection Amendment Act, will mandate that operators return entrance fees within 180 days of the termination of a lease, and apply interest penalties for those who don't follow through.

The new law won't apply to existing life leases, however — only to those entering new agreements.

Service Alberta and Red Tape Reduction Minister Dale Nally told reporters before introducing the bill Monday that it's about protecting vulnerable seniors while still making sure life leases remain a viable housing option in the province.

Nally said he's long heard concerns from his constituents, and consulted with operators and leaseholders.

“They all agreed that there needs to be protections put in place so that this doesn't happen again,” he said, promising the new rules will create transparency for lease holders to know where their money is being held and how it's being invested.

It will put the life lease industry under the authority of the province's Consumer Protection Act.

Under that law, operators can be hit with administrative penalties of up to $100,000. If cases are convicted in court, fines could reach $300,000 or two years of jail time.

FAMILIES `DEVASTATED'

Karin Dowling is the Alberta Life Lease Protection Society president and told reporters Monday her 95-year-old mother-in-law and their family do not have time to wait for her to be made whole. She said they've been “blindsided” without being properly consulted, and the legislation doesn't establish that the loans need to be held in trust.

Vice-president Jim Carey said there are 161 families in the queue waiting for repayments of life lease loans that total up to $55 million from Edmonton property developer Christenson Group of Companies, and the government could backstop the loans.

“These families are devastated ... and this legislation will not help them,” he said.

Mandating repayment is no different than a court judgment, he said, adding that the interest payment penalties will only “delay until there's insolvency.”

Nally declined to comment on lawsuits currently before the courts involving the Christenson Group of Companies.

“Right now investigations are taking place and conversations are being had and let me be clear that those (seniors) are always front of mind when we're talking about this issue,” said Nally.

Alberta Opposition NDP Service Alberta critic Parmeet Singh Boparai said the bill will do nothing to alleviate the concerns of Albertans who have millions of dollars tied up in life leases.

“It is important that the new legislation apply not only to future, but also to current life lease holders,” he said.

There are 22 operators who offer life leases across Alberta — five are for-profit and 17 are non-profit. Government officials were unable to provide an estimate of how many Albertans are waiting for repayment under life leases.