The Retirees' Newsletter
Faculty & Librarian Retirees' Association, University of Windsor

Issue #14, October, 1995

THE "LIFE LEASE" AS A RETIREMENT HOUSING OPTION

Ralph Cowan

IN A WORLD OF RISK AND UNCERTAINTY, retirees should use particular caution when making decisions on their housing. A house is one of our most valuable and volatile assets, perhaps even the most vulnerable. In most cases it is the largest part of our net worth and mortgage free!

For many retirees, their house was built to house a family of 4 to 6 people, and its space is more than adequate for our present and future needs. Taxes, utilities, maintenance etc. could be lower for a less spacious mansion. By selling, we might realize a capital gain (tax free) and spend less on a smaller replacement.

WHAT ARE SOME OF THE POSSIBLE OPTIONS? Should we sell, and downgrade to a smaller house? Should we sell, and rent satisfactory housing? Or should we go into a "Life Lease" which in recent years has captured certain retirees?

In my view the most risky option is the Life Lease. Since it is a relatively new concept and the complaint level is high, if you are considering this option, I would ask you to consider these points:

1. TALK to as many people as possible who have had experience in housing with the life lease.

2. READ THE CONTRACT carefully, keeping in mind that the Board of Directors administering it will probably change and may interpret the Lease differently from what the earlier Board did.

3. GET GOOD LEGAL ADVICE (and heed it!) regarding your responsibilities and rights as well as those of the Board of the Leasing Group. Don't let down your guard because that group represents a religious or charitable organization.

4. REMEMBER, if you sign the Life Lease and find that the Board of the Life Lease group have violated the lease, and you decide to sue, you may have to wait six months to two years to get your day in court. Also don't forget you will likely have heavy legal fees, court costs, etc.

5. WHATEVER OPTION YOU CHOOSE, keep an eye on the possible impact on your "cash flow" and "net worth". Keep your equity up as long as possible. One way to do this is through ownership and control of your assets (especially housing) as you glide through your retirement years.

ADDRESS CHANGES AND CORRECTIONS

New addresses are as shown:

John F. Callaghan,
Assumption Church, 350 Huron Church Road,
Windsor, N9C 2J9. 253-2493.

J. Francis Leddy,
1333 Ouellette Ave., Apt. 1210,
Windsor, N8X 4V4.

Peter Sonnenfeld,
Apt. 305, 280 Simcoe Street,
Toronto, ON., M5T 2Y5. (416) 598-0469.

Maurice B. Powley,
3691 Charlevoix Ave.,
Windsor, N9E 3B4. 966-0640 (A correction)

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