There are many variations of life leases, just as there are different forms of other types of ownership. The most common form is the purchase by the resident of the exclusive right to occupy a residential unit for as long as the resident wants or is able, in exchange for the payment of the purchase of that right and a monthly fee. That monthly fee covers the resident s share of all of those common costs which are part of any type of ownership, taxes, insurance, maintenance and repairs. The initial costs and the monthly fees are usually quite similar to those of other comparable accommodation. In that event it is the market that will determine what that right is worth.
Lets look behind the life lease and examine just how it is put together.
The Sponsor Group in turn grants the life lease to individual residents, pursuant to a written agreement which details the cost, rights and obligations of the parties, and the regulations governing the use, termination and rights to equity. If a project is well designed and run, the right to occupy one of those units will be desirable to the market and it will command a reasonable value both initially and when it is time to resell the right. What makes life leases attractive is the sense of community, the ability to become directly involved in the Sponsor Group and the availability of additional services, in a setting allowing the mixture of independence and support that responds to changing needs. Most projects provide that all residents become members of the Sponsor Group, which makes them voting participants in the project. Residents are, in a very real sense, collectively the owner and individually the resident of the project.