Alberta seniors waiting for payments after ending life leases for housing frustrated by delays

An Edmonton property developer that offers life-lease housing for seniors is facing issues meeting financial obligations when residents move out or die.

Former residents of several Christenson Group of Companies retirement buildings have been waiting in queues — in some cases up to two years — to be repaid hundreds of thousands of dollars they put into life leases.

Karin Dowling, an Edmonton woman whose mother-in-law is waiting for her own repayment, started a Facebook group last month to help others in the same situation connect. The group has already grown to more than 100 members.

Families feel lost about what they should do, and seniors who currently live in life-lease units are frightened too, Dowling told CBC News. In 2021, her mother-in-law, Marion Dowling, moved out of Christenson's Devonshire Village in southwest Edmonton.

Marion now lives in long-term care. The family has been waiting since March 2022 for nearly $400,000 owed to her from the lump sum she paid toward the life lease. To date, they have only received 10 per cent of it.

"Daily, we go in and talk to her and she'll say, 'So have you heard anything?' or 'Has the money come in yet?'" Karin Dowling said.

"And it's heart-wrenching to tell her that no, your money is still not with you."

She said she'd like to see the government implement more regulation.

"Somebody has to step up and make it right."

How life leases work

Life leases are housing agreements that have been used for decades in Ontario and the western provinces, mostly for seniors' housing. Attractive because they typically cost less over time than renting, the agreements are usually for life or for a fixed term.

Life-lease models vary across the country, but they offer something like a cross between renting and owning: residents pay a lump sum upfront — often from the proceeds of selling their home — for the right to occupy a unit. They also make monthly payments to cover operating costs.

When residents die or move out, their initial investment is returned, minus a percentage that the housing operator keeps and puts toward refurbishing the unit. Under the Christenson Group's life-lease agreements, the company keeps eight per cent of the lump-sum payment.

Nine Christenson Group retirement communities in Edmonton and surrounding areas offer life leases for a portion of their units.

Devonshire Village, in southwest Edmonton, has dozens of former life-lease holders waiting in repayment queues. (Janet French/CBC)

About 100 people are currently waiting in life-lease repayment queues, company president Greg Christenson told CBC News.

That's because some buildings saw more than six per cent of life-lease residents terminate their leases, and the agreements state that when that happens, a queue for repayment begins.

Residents are put in the payout queue in the order they submitted their notices of termination.

On its website, the Christenson Group says that queuing is a measure to protect property values. It says that less than six per cent of all life-leased suites in a building must be available for re-leasing at any time, "to avoid depressing the suite values."

This type of queue is a common feature of life leases. But Christenson said the current situation is something he's never seen in the 25 years the company has offered them.

"We would love to be able to pay out 100 people," he said. "But fundamentally, the structure never contemplated paying out 100 people at a time."

He also stressed that the residents' investments haven't been lost.

"They're secured by a second mortgage," Christenson said, adding the buildings have retained their value.

But he said it isn't possible to repay everyone right now.

"Eventually they'll all get repaid.... But the question is timing. It takes time to go through signing leases, meetings, refinancing. It's not going to be a short process."

On Sept. 29, the Christenson Group sent a letter to residents of Devonshire Village that said the complex reached the six per cent life-lease termination threshold in December 2018.

According to the letter, 80 payments have been refunded over that time, with an average wait time of 10½ months.

"That wait time has increased considerably, however, with the first person in queue waiting since June 30, 2021 for repayment. The last refund was paid May 4, 2023," the notice said.

As of the end of September, there were 44 outstanding payments in the Devonshire Village queue, reaching a total of $15 million.

Residents' families left in limbo

Mona MacKenzie was certain the nest egg she'd carefully saved for her retirement would go to her family. They haven't got it yet.

Mona MacKenzie, who died in January 2023, moved into life-lease housing in 2019. Her son has been unable to settle her estate while the lump sum she put toward her unit is waiting in a repayment queue. (Submitted by Steve MacKenzie)

In 2019, as she entered her 90s, MacKenzie put money into a life lease for an independent living unit in Christenson Group's Royal Oak Village in Lacombe, Alta., about 125 kilometres south of Edmonton by road.

She put about $150,000 toward her first unit, then in 2021 added another $50,000 to move to a larger suite.

When she died in January of this year, her son, Steve MacKenzie, was expecting to be repaid just under $200,000.

Instead, he got a letter from the Christenson Group informing him he was in the queue, since Royal Oak Village had hit the six per cent termination threshold.

"On top of our normal seasonal slowdowns, the unfortunate passing of some of our residents and an abnormal number of relocations, new residents coming to our community are choosing to rent their suites or to rent until their homes sell," the letter said.

"Adding to that is the alarming situation related to COVID-19 which had temporarily slowed down our re-leasing."

Almost nine months after his mother's death, MacKenzie hasn't been able to settle her estate and doesn't know when the payout might come.

"She saved all her life so that she would have some money to help her in her final years in safety and security," he said. "The estate's in limbo now, so we can't get that money out. Our grandkids could use it right now. But Christenson's got it."

Lengthy queues an 'outlier,' consultant says

Christenson said the majority of people waiting for money are in a few buildings — like Devonshire Village and St. Albert's Citadel Village East — where life leases had been more popular for some of the larger units.

According to notices sent at the end of September, Citadel Village East has 28 termination payments due, totalling $9.5 million. At Bedford Village in Sherwood Park, similar letters say there are 20 payments to former life-lease holders in the queue, adding up to nearly $7 million.

Christenson said the company is now moving away from life leases, but that will take time, and has to be handled delicately.

"Fundamentally, I believe we have to go back to mortgage markets and refinance on a rental model," he said.

Kate Mancer is principal of Vancouver-based seniors' housing consultant firm Lumina Services. She has also written a book on life-leasing.

Having people wait years for their initial payments to be returned is an "outlier," she said, adding that she isn't seeing lower demand for life-lease housing elsewhere.

"I always describe myself as Canada's No. 1 advocate of life-lease housing," Mancer said.

"I'm very alarmed by what's going on in Alberta, about how that could tarnish the reputation of life lease, which can be an extremely satisfying and beneficial way to create seniors' housing."

Alberta has also been unusual among other provinces that have life leases, Mancer said, because there are more for-profit companies, like the Christenson Group, offering them.

Private companies own life-lease developments in other provinces too, but they're more common among non-profit organizations and religious or community groups, she said.

Province looking at life leases

Alberta doesn't have specific legislation that governs life leases. Only Manitoba has a dedicated Life Leases Act, which has been in force for nearly 25 years.

While the group waiting for payouts from the Christenson Group is getting vocal about its concerns, the provincial government is taking a closer look at life leases.

Premier Danielle Smith's July mandate letter to Dale Nally, the minister for Service Alberta and Red Tape Reduction, includes a directive to analyze life leases and make recommendations "to ensure appropriate protections are in place for Albertans."

In a statement, Nally said he's consulting with holders of life leases across the province.

Service Alberta and Red Tape Reduction Minister Dale Nally has been directed to analyze life-lease protections in the province. (Ty Ferguson/CBC )

Karin Dowling said she and her husband helped her mother-in-law carefully consider the life-lease agreement years ago. They were aware of the queue clause, but they never anticipated waiting this long for repayment.

She said she and others feel they weren't properly informed of the risks when they entered the life lease — something Greg Christenson denies.

"We do a full-disclosure agreement akin to a condominium, which is not common on rental properties," he said. "The legal papers are very clear. There's always a reference to reviewing it with your lawyer and your accountant."

He said seniors who signed on to life leases weren't making a mistake. There was just no way to anticipate how COVID would change everything.

"It's not their fault. We didn't contemplate it, and we're going to do our damnedest to get them paid back 100 per cent."