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Bill 208 - The Life Leases Act

Ms Blakeman:

Thank you very much, Mr. Speaker, and my compliments to the mover of the bill. This is a much-needed piece of legislation in this province. Frankly, I was working on my own version, so I’m very grateful that the member has saved me a lot of hard work.

Now, I’m going to talk about some of the things that we would like to see included or adjusted in the proposed legislation that the member has put before us. Don’t misunderstand me; that’s not to say that this isn’t overall a pretty good bill and a pretty good stab at it. As was mentioned, life lease is a great option, particularly for seniors. Using money that they may well have accumulated in their family home, that money, because of the way this particular housing option is organized, allows them to often get a much more well- appointed or a larger unit in a very nice facility. Essentially, the developer is able to save on borrowing costs by using the entrance fee; therefore, that money saved can be redirected into, frankly, a much nicer place to live.

I am very fortunate in having one of the three life-lease units in Edmonton in my fabulous constituency of Edmonton-Centre. The two other ones in Edmonton are in Riverside and Castle Downs. I think mine is actually the longest one; that’s Lions Village Railtown, just over on 109th Street here. So I’ve had to learn a lot about lifeleases over the years. The biggest problem is we had no governing legislation, so I think this is a really great piece of legislation brought in front of us. Having said all that to put it in context, there are a couple of issues that my constituents who are joining us in the gallery today have brought forward to me – and I think I added on one of my own here – and feel is of importance. We’d like to see them included in amendments to the bill as we move forward with this. Very quickly, the list is: a preamble, the retroactivity of the bill, audits, the trustee sections, the Canada revenue act, and, if we have time, the use of excess funds.

I think it would be helpful if we had a preamble to the bill that recognized that the overriding principle of a life-lease act was to protect the consumer. I think there is a fair amount of protection, and indeed this whole housing option makes it very attractive to developers. Frankly, I’m not worried about the developers here. I’m worried about the human beings that are going to live in this and to make sure that in a preamble we would be able to shape the legislation by saying that this is primarily for consumer protection. We would like to see a preamble added to the bill that laid that out as an overriding principle.

One of the things that we’re noticing is that when we develop this legislation – and I’ll refer back to the condo act, which is the one we have in front of us – we’re really good about laying out how we start these and all the nitty-gritty about who is responsible for which piece and how we divide it all up to begin with. Well, what we didn’t anticipate in the bill – and I’m hoping that we can overcome that problem in this piece of legislation – is: do we design a piece of legislation that works for us 30 years down the road? That’s the situation we now have with condominiums. For anybody representing the larger cities we have – or just about any riding now has condominiums in it – the condominium act that we have does not anticipate what it’s like living in that building 30 or 40 years down the road. So I’m trying to make sure that we don’t make that same mistake with this legislation.

Second, and I would say from my constituents’ point of view the largest area of concern, is the way the bill is written. This appears in section 2(1). For those of you following along, it appears on page 3 of the actual bill. It does not capture those that are already in units. It only goes forward. Frankly, that’s not uncommon, but I think we need to revisit that decision. What we have is: “every unit that is the subject of a life lease and every residential complex that contains such a unit, where the life lease is entered into after this Act comes into force.”

We would advocate that that last subsection, “where the life lease is entered into after this Act comes into force,” is deleted. Now, I’m committing myself, but if I can’t get the member to do it, I may bring forward an amendment when we’re in Committee of the Whole that would delete that section because then it would capture those that are already living in life leases. As I said, you know, there are already three of them in Edmonton, there are probably at least that many in Calgary, and there may well be others in places like Medicine Hat or Red Deer or Lethbridge, et cetera, et cetera.

The problem that we run into, of course, is that there is a certain amount of turnover that we have. In checking with my constituents, they were saying: yeah, it’s about 10 per cent. You know, people move on; they go into long-term care; they may pass away. There’s about a 10 per cent turnover. If we did that, for example, in Lions Village Railtown, we’d end up with about six people a year who would come in after the act took effect, but everybody else in the unit would not be covered by the act.

So increasingly we have disproportion as to who the act applies to, and I think it’s important that we anticipate that problem and deal with it. We need to have some sort of retroactivity or a phase-in where we capture the people who are already in life leases. I mean, let’s not kid ourselves. This is, I would say, the most vigorous kind of living situation that seniors are choosing in this day and age. Although it’s a building designed for seniors, it really is independent living. These are very, very vigorous, active people who are living there, so we’re going to end up with them in these units for a very long period of time, another 20 years or 30 years potentially. We just don’t want to see that kind of disproportion on who’s covered by the act and who isn’t, so we need to address that.

Holy mackerel. I’ve got two minutes left.

The next issue that was of real concern was the audits. We need clarity in the act around the audits. In particular, we need an independent auditor. There has to be a clear separation in audit statements between various buildings that are owned by the same organization, whether that’s private or not-for-profit, and the information has to be made available to the leaseholders. Right now there is no current requirement for reliable, consistent annual financial reports to be given to the leaseholders. And we need to sort out the problem of an audit versus a review. I don’t want to see smaller buildings take an unfair financial hit to produce an audited statement; nonetheless, the people that are leaseholders deserve to know what’s happening with their money and how it’s being handled. So we do need monitoring.

We need a criteria, a method that this is going to be done by; we need enforcement – for example, a fine system if these statements aren’t made available – and adequate penalties, perhaps on a sliding scale; and we need to address the issue that the majority vote can remove the requirement to produce an audited report. That can come around through various kinds of coercion or a landlord telling people it isn’t necessary. I think the review has to be there, and it cannot be waived for any reason.

The fourth area is around a trustee, and that’s covering sections 19 to 23 in the act. My question is: why does the act view the trust money as the landlord’s money and not the tenant’s money? There are some issues that have been raised by my constituents around who is determining the trustee. It needs to be a professional designation, and it needs to be more clearly laid out than what we have currently in the legislation. It could go under the section 1(1)(p), that description of a trustee, but I think that it needs to be someone with an actual professional designation, something more along the lines of what we’re seeing in section 22(1)(b). So who determines this and the fact that it should be a professional?

The trustee should also be mutually acceptable and independent, and the communication must be freely given, and access to the trustee must also be freely available. I think there are a number of court cases before us right now that run counter to that.

Thank you for the opportunity. I didn’t get through my list, but I will in Committee of the Whole. Thank you.