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Alberta intends to boost consumer protection for seniors entering life leases

Service Alberta and Red Tape Reduction Minister Dale Nally addresses new legislation on life leases on Monday. He is flanked by Alberta Seniors and Community Housing Association president James Nibourg, right, and Alberta Seniors Communities & Housing Association executive director Irene Martin-Lindsay, left. (Madeline Smith/CBC - image credit)
Service Alberta and Red Tape Reduction Minister Dale Nally addresses new legislation on life leases on Monday. He is flanked by Alberta Seniors and Community Housing Association president James Nibourg, right, and Alberta Seniors Communities & Housing Association executive director Irene Martin-Lindsay, left. (Madeline Smith/CBC - image credit)

The Alberta government is introducing new regulations on life-lease housing for seniors to address what they call "serious gaps" in protections for leaseholders.

The legislation comes after a growing group of people raised vocal concerns about long wait times — some stretching to two years or more — for an Edmonton developer to repay hundreds of thousands of dollars to former retirement home residents.

The new rules will apply only to life-lease contracts signed after the bill gets royal assent, meaning it won't help the estimated 170 seniors and their families waiting for money they put into life leases with Christenson Group of Companies.

Service Alberta and Red Tape Reduction Minister Dale Nally said Monday he asked for life-lease protections to be included in his mandate letter specifically because of that issue.

"Recently, we have [been] made aware of some serious gaps in protections for life-lease holders and their families," he said.

Nally added that he consulted with life-lease operators and residents, and he heard a need for change from former Christenson Group building residents and family members.

"They all agreed that there needs to be protections put in place so this doesn't happen again, and we heard you. We're responding."

Representatives from the Alberta Life Lease Protection Society, a group formed by people in the queue for Christenson Group repayments, said they were caught off guard by the legislation. The group was expecting more time to give input, and help shape the new rules, they said at a news conference Monday.

"These families, they're devastated ... to find out now that this legislation will not help them," society vice president Jim Carey said.

"We're going to be even busier and even noisier than we were. We're angry, and we're upset," president Karin Dowling said.

Life leases to be governed by Consumer Protection Act

A life lease is like a blend of owning and renting. Residents pay an upfront lump sum — often from the proceeds of selling their home — for the right to occupy a unit for life, or as long as they're able to stay. They also make monthly payments to cover operating costs but the monthly amount is typically less than renting.

When a resident dies or moves out, their initial investment is returned minus a percentage that the housing operator keeps and puts toward refurbishing the unit for the next occupant.

Bill 12, tabled Monday, brings life leases under the authority of the Consumer Protection Act. The legislation mandates that money owed to residents when the life lease ends must be repaid within 180 days.

After that period, interest can accrue and life-lease operators could face consumer enforcement penalties, including court action that comes with fines of up to $300,000 or two years in prison.

There will also be a mandatory 10-day "cooling-off period" after a life-lease contract is signed, to give prospective residents a chance to change their minds.

Jim Carey, left, and Karin Dowling, right, helped set up the Alberta Life Lease Protection Society to advocate for seniors and their families waiting in queues for money that developer Christenson Group of Companies owes them from life lease payments.
Jim Carey, left, and Karin Dowling, right, helped set up the Alberta Life Lease Protection Society to advocate for seniors and their families waiting in queues for money that developer Christenson Group of Companies owes them from life lease payments.

Jim Carey, left, and Karin Dowling, right, helped set up the Alberta Life Lease Protection Society to advocate for seniors and their families waiting in queues for money that developer Christenson Group of Companies owes them from life lease payments. (Scott Neufeld/CBC)

The legislation doesn't set specific requirements for what operators must do with leaseholders' entry fees, which Carey and Dowling say is a problem.

"If there was a trust going forward, there'd be no issue, and we wouldn't be repeating this fiasco," Carey said.

Nally said the government could set new standards in the future, but he ruled out asking that the money be held in trust, saying life-lease operators told him that would damage affordability too much. Surety bonds are a possibility, but Nally said there aren't currently any available on the market designed for life leases.

If that changes, the legislation could, too, he said.

"There's going to be transparency and disclosure that doesn't exist today," he said.

"We believe that this will find the balance between protecting Albertans and not killing the industry."

In a statement, NDP Service Alberta critic Parmeet Singh Boparai said Bill 12 doesn't ease fears for Albertans who have already invested in life leases, and new legislation should apply to both current and future life leaseholders.

Third province with life-lease legislation

The life-lease model has been used for decades across Canada, mostly for seniors' housing. If passed, Alberta's legislation would make it the third province, after Saskatchewan and Manitoba, with specific life-lease rules.

Life leases are most often offered by non-profit organizations, and that's the case in Alberta too. According to the government, there are 22 life-lease providers in the province but only five are for-profit companies.

The five include the Christenson Group, which is pulling away from the model. The company's nine retirement homes in Edmonton and central Alberta that include life leasing are being converted to rental-only buildings, including remortgaging to repay those waiting for their money.

Christenson Group's Village at Westmount, in Edmonton, is one of nine buildings where former residents are waiting in a queue to be repaid money they're owed after terminating life leases.
Christenson Group's Village at Westmount, in Edmonton, is one of nine buildings where former residents are waiting in a queue to be repaid money they're owed after terminating life leases.

Christenson Group's Village at Westmount, in Edmonton, is one of nine buildings where former residents are waiting in a queue to be repaid money they're owed after terminating life leases. (Travis McEwan/CBC)

Former life-lease residents in Christenson Group retirement homes should have received their initial payment back, minus an eight per cent cut, shortly after terminating their lease.

But their contracts also say that if life-lease unit vacancy exceeds six per cent, residents are put in a queue to wait for repayment.

Christenson Group president Greg Christenson has previously told CBC News that the queue started to grow out of control because they couldn't move new residents in during the COVID-19 pandemic.

He said Monday that he supports life-lease legislation, and the new rules will offer some consistency for operators.

"It really comes down to the return of the loan, and then what's the mechanism for that."

Nally said he won't comment specifically on the Christenson situation because an active investigation is underway through Alberta's consumer protection unit.