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Tools & Resources

More and more people are embracing the benefits of land lease communities and seasonal resorts, as they learn more about it. Below are some tools and resources to help you, as you’re considering your needs and various available options.

  • Land Lease vs Life Lease
  • Your Protection
  • Myths About Land Lease
  • Financing a Land Lease Home

 

Land Lease vs. Life Lease  

There is another legal structure for home purchasing with a similar name, life lease, which  

may be confused with land lease housing. To help you understand the similarities and  

differences between land leases and life leases, please see the below table.

 

Topic 

Land Lease 

Life Lease 

Ownership 

In a land lease, the dwelling is owned by the resident and the land on which the dwelling site is leased. 

Life lease ownership means holding an “interest in property” providing the right to live in the unit, usually for the duration of the lease holder’s life or until the lease holder decides to move. 

Payment 

Rent is paid to the landowner (landlord) of the land lease community. Landlords may provide services and facilities to the community that are intended for the common use and enjoyment of the tenants. These amenities and that are included in their rent. 

Life lease holders purchase their units by paying a lump sum upfront, as well as and then pay monthly fees for maintenance and property taxes. 

Transfer 

Owned homes can be bought and sold by successive residents who, in turn, rent the lot from the landlord. 

Life leases can be sold by the life lease holder or inherited by heirs. However, while inheritors may profit from a sale of the lease, they cannot move into the unit without first applying to the sponsor and meeting their eligibility criteria. 

The Residential Tenancies Act 

The RTA applies to mobile home parks  

and land lease communities. 

The RTA does not apply to life lease housing, when there is a direct relationship between a lease holder and the project sponsor. 

 

 

 

Your Protection

Knowing your rights is key when buying or purchasing a home. Below are some key Acts and Codes to help protect you at this very important phase in your life.

 

Human Rights Act – The Human Rights Act in all provinces applies to everybody. Under the provincial act, everyone has the right to equal treatment without discrimination and harassment. In a residential environment, landlords are responsible for making sure housing environments are free from discrimination and harassment.

 

Planning Act – The Planning Act is provincial legislation that sets out the ground rules for land use planning in each province. The Act describes how land uses may be controlled, and who may control them. Each province has specific legislation that defines the authorities and rules around land use and management.   

 

The Residential Tenancies Act – The Residential Tenancies Act provides protection for residential tenants from unlawful rent increases and unlawful evictions; to establish a framework for the regulation of residential rent; to balance the rights and responsibilities of residential landlords and tenants; and to provide for the adjudication of disputes and for other processes to informally resolve disputes.

 

Building Code – The Building Code is a set of rules mandated by a province that specify the standards for constructed objects, such as buildings and nonbuilding structures. Buildings must conform to the provincial code to obtain planning permission, usually from a local council.

 

Myths About Land Lease

While widely understood in many countries, there is a general lack of knowledge about this housing option in Canada. Many don’t understand how the arrangement works and the related benefits. The majority of Canadians are unaware that land lease is even a homeownership alternative.  

Below are some frequently asked questions about land lease homeownership, and answers that correct the myths:

1. What happens when your lease is up?

Some people mistakenly think that their lease could change dramatically, or worse, they could lose their home. At end-of-lease term, a homeowner can either renew their lease or continue on a monthly basis. If someone sells, it just starts a new lease. We must follow the provisions set by the Residential Housing Act and Planning Act, which means increases and changes to the lease are governed by law.  

2. Does the value of your home rise like freehold homes?

Homes in land lease communities go up in price the same way as other homes on the market. In our experience, if you have a well-maintained home in Parkbridge, it will appreciate in value the same as freehold homes do in the same market.  

3. Are people in land lease homes typically lower income?

It’s unfortunate that perception exists. In reality, they have simply chosen to leverage their equity for the lifestyle they want to live – making their money go further and getting more living space for less.

4. Does the 21-year lease make it difficult to get a mortgage?

Since most mortgages have a 25- or 30-year amortization, the 21-year lease for most land lease homes could require adjustments. You may need a shorter amortization period based on your lease, which will mean higher monthly payments, but your home would be paid off more quickly. Parkbridge is working with financial institutions to support financing options.

5. Is it difficult to sell a land lease home?

Not at all. Homes go up at the same rate as freehold homes in the same area. If the home is well looked after, you should have no trouble selling it at a similar rate of return as any other house in your community.

6. Is the community closed off from the larger neighbourhood?

These are not gated communities. They are built to the same quality and look like other houses, streets and park areas in the broader local community.

 

Financing a Land Lease Home  

When it comes to financing, RBC Royal Bank has the most experience with land lease financing in Canada, due to their familiarity with this housing option. They offer both conventional and default insured mortgages and competitive rates.  

Some benefits to purchasing leasehold:  

  • No land transfer tax
  • Purchase prices tend to be more affordable compared to freehold homes
  • Same current-rates and terms are offered for these purchases

Here are tips for starting the process for a new leasehold mortgage:

  • Share all financial information with a Mortgage Specialist – this is especially important so that there are no surprises or delays with financing.
  • Have a Mortgage Specialist complete a pre-approval – knowing what one can afford before looking at new homes will set the buyer up for success every time.

When it comes to financing one of the biggest investments of a lifetime, it is important to find a mortgage specialist that can make it happen. Mortgage specialists will walk prospective homebuyers through the entire process from start to finish, leaving no questions unanswered.

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TOOLS & RESOURCES

Tools & Resources

More and more people are embracing the benefits of land lease communities and seasonal resorts, as they learn more about it. Below are some tools and resources to help you, as you’re considering your needs and various available options.

  • Land Lease vs Life Lease
  • Your Protection
  • Myths About Land Lease
  • Financing a Land Lease Home

 

Land Lease vs. Life Lease  

There is another legal structure for home purchasing with a similar name, life lease, which  

may be confused with land lease housing. To help you understand the similarities and  

differences between land leases and life leases, please see the below table.

 

Topic 

Land Lease 

Life Lease 

Ownership 

In a land lease, the dwelling is owned by the resident and the land on which the dwelling site is leased. 

Life lease ownership means holding an “interest in property” providing the right to live in the unit, usually for the duration of the lease holder’s life or until the lease holder decides to move. 

Payment 

Rent is paid to the landowner (landlord) of the land lease community. Landlords may provide services and facilities to the community that are intended for the common use and enjoyment of the tenants. These amenities and that are included in their rent. 

Life lease holders purchase their units by paying a lump sum upfront, as well as and then pay monthly fees for maintenance and property taxes. 

Transfer 

Owned homes can be bought and sold by successive residents who, in turn, rent the lot from the landlord. 

Life leases can be sold by the life lease holder or inherited by heirs. However, while inheritors may profit from a sale of the lease, they cannot move into the unit without first applying to the sponsor and meeting their eligibility criteria. 

The Residential Tenancies Act 

The RTA applies to mobile home parks  

and land lease communities. 

The RTA does not apply to life lease housing, when there is a direct relationship between a lease holder and the project sponsor. 

 

 

 

Your Protection

Knowing your rights is key when buying or purchasing a home. Below are some key Acts and Codes to help protect you at this very important phase in your life.

 

Human Rights Act – The Human Rights Act in all provinces applies to everybody. Under the provincial act, everyone has the right to equal treatment without discrimination and harassment. In a residential environment, landlords are responsible for making sure housing environments are free from discrimination and harassment.

 

Planning Act – The Planning Act is provincial legislation that sets out the ground rules for land use planning in each province. The Act describes how land uses may be controlled, and who may control them. Each province has specific legislation that defines the authorities and rules around land use and management.   

 

The Residential Tenancies Act – The Residential Tenancies Act provides protection for residential tenants from unlawful rent increases and unlawful evictions; to establish a framework for the regulation of residential rent; to balance the rights and responsibilities of residential landlords and tenants; and to provide for the adjudication of disputes and for other processes to informally resolve disputes.

 

Building Code – The Building Code is a set of rules mandated by a province that specify the standards for constructed objects, such as buildings and nonbuilding structures. Buildings must conform to the provincial code to obtain planning permission, usually from a local council.

 

Myths About Land Lease

While widely understood in many countries, there is a general lack of knowledge about this housing option in Canada. Many don’t understand how the arrangement works and the related benefits. The majority of Canadians are unaware that land lease is even a homeownership alternative.  

Below are some frequently asked questions about land lease homeownership, and answers that correct the myths:

1. What happens when your lease is up?

Some people mistakenly think that their lease could change dramatically, or worse, they could lose their home. At end-of-lease term, a homeowner can either renew their lease or continue on a monthly basis. If someone sells, it just starts a new lease. We must follow the provisions set by the Residential Housing Act and Planning Act, which means increases and changes to the lease are governed by law.  

2. Does the value of your home rise like freehold homes?

Homes in land lease communities go up in price the same way as other homes on the market. In our experience, if you have a well-maintained home in Parkbridge, it will appreciate in value the same as freehold homes do in the same market.  

3. Are people in land lease homes typically lower income?

It’s unfortunate that perception exists. In reality, they have simply chosen to leverage their equity for the lifestyle they want to live – making their money go further and getting more living space for less.

4. Does the 21-year lease make it difficult to get a mortgage?

Since most mortgages have a 25- or 30-year amortization, the 21-year lease for most land lease homes could require adjustments. You may need a shorter amortization period based on your lease, which will mean higher monthly payments, but your home would be paid off more quickly. Parkbridge is working with financial institutions to support financing options.

5. Is it difficult to sell a land lease home?

Not at all. Homes go up at the same rate as freehold homes in the same area. If the home is well looked after, you should have no trouble selling it at a similar rate of return as any other house in your community.

6. Is the community closed off from the larger neighbourhood?

These are not gated communities. They are built to the same quality and look like other houses, streets and park areas in the broader local community.

 

Financing a Land Lease Home  

When it comes to financing, RBC Royal Bank has the most experience with land lease financing in Canada, due to their familiarity with this housing option. They offer both conventional and default insured mortgages and competitive rates.  

Some benefits to purchasing leasehold:  

  • No land transfer tax
  • Purchase prices tend to be more affordable compared to freehold homes
  • Same current-rates and terms are offered for these purchases

Here are tips for starting the process for a new leasehold mortgage:

  • Share all financial information with a Mortgage Specialist – this is especially important so that there are no surprises or delays with financing.
  • Have a Mortgage Specialist complete a pre-approval – knowing what one can afford before looking at new homes will set the buyer up for success every time.

When it comes to financing one of the biggest investments of a lifetime, it is important to find a mortgage specialist that can make it happen. Mortgage specialists will walk prospective homebuyers through the entire process from start to finish, leaving no questions unanswered.