Life Leases Act, 2023 — Bill 125 (43rd Parliament, 1st Session)

Bill 125, 43-1

Ontario — Bills

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Bill 125, Life Leases Act, 2023

Khanjin, Hon. Andrea

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Status

Debates

Original

Bill 125 Original (PDF)

EXPLANATORY

NOTE

The

Bill enacts the Life Leases Act, 2023 .

life lease is a written tenancy agreement that involves payment of an entrance

fee for a rental unit. The person who is first entitled to occupy the rental

unit is granted a right of occupancy for life or for a fixed term of not less

than 50 years.

The

Bill authorizes certain payments in respect of life leases and requires the

disclosure of information relating to life leases. The information that a landlord

is required to disclose to a tenant includes the estimated entrance fee, the

projected completion date, information regarding governance and management of

the residential complex, the estimated amount of other fees, including monthly

occupancy fees, and the estimated refund that a tenant would receive upon

termination of the lease. Prescribed landlords are required to maintain a

reserve fund to pay for any unforeseen major repair to or replacement of assets

of the complex. The landlord is also required to maintain insurance policies

in accordance with the regulations. The Bill includes rules relating to

meetings of tenants and board meetings, including requirements in respect of

notice and timing. A landlord is required to appoint a trustee to receive and

administer a tenant’s entrance fee in accordance with specified requirements.

Bill 125 2023

Act respecting life leases

Contents

PART I

GENERAL

Interpretation

General

application

Restriction

or waiver of application void

Minister

may prepare guide

PART II

PAYMENTS AND DISCLOSURE

Permitted

payments

Acknowledgement

of receipt

Pre-lease

payment held in trust

Entrance

fee held in trust

Statement

of cancellation rights from landlord

Failure

to give possession

Notice

of possession date

PART III

RESERVE FUNDS, INSURANCE AND ANNUAL REPORTING

Reserve

fund for prescribed landlord

Insurance

required

Meetings

Notice

of board meeting

Audited

financial statements

information

PART IV

TRUSTEES AND REFUNDABLE ENTRANCE FEES

Appointment

of trustee re entrance fees

Entrance

fee paid to trustee

Minimum

refundable

Refund

fund

PART V

OFFENCES AND PENALTIES

Offence:

false or misleading statement

PART VI

REGULATIONS

Regulations

by L.G. in C.

PART VII

COMMENCEMENT AND

SHORT TITLE

Commencement

Short

title

His

Majesty, by and with the advice and consent of the Legislative Assembly of the

Province of Ontario, enacts as follows:

PART I

GENERAL

Interpretation

(1) In this Act,

“entrance

fee”, in relation to a rental unit, means an amount, other than a deposit or

rent payable on a periodic basis annually or more frequently, paid or payable

in respect of the rental unit to the landlord or a trustee; (“frais d'entrée”)

“initial

tenant”, in relation to a rental unit, means the first tenant to enter into a

life lease in respect of the rental unit; (“premier locataire”)

“landlord”

means a landlord, as defined in the Residential Tenancies

Act, 2006 , of a residential complex and includes, in relation to a

proposed residential complex, a person who,

(

a) will

be the landlord of the complex, or

(

b) alone

or together with others initiates or sponsors,

(

i) the

organization, development or marketing of the complex, or

(ii) the

founding or constituting of the landlord; (“locateur”)

“life

lease” means a written tenancy agreement under or in respect of which,

(

a) an

entrance fee has been paid or is payable in respect of a rental unit, and

(

b) the

person first entitled to occupy the rental unit under the agreement is granted

a right of occupancy for life or for a fixed term of not less than 50 years; (“bail

viager”)

“Minister”

means the member of the Executive Council to whom responsibility for the

administration of this Act is assigned or transferred under the Executive Council Act ; (“minister”)

“occupancy

date”, in relation to a residential complex, means the first day of the month

after the month in which an occupancy permit for the complex is issued by an

authority having jurisdiction to issue the occupancy permit, and for the

purpose of determining the occupancy date, where the development of a

residential complex occurs in stages the complex is deemed to be the part that

contains the tenant’s rental unit; (“date d'occupation”)

“offer

to lease” means an offer by a landlord or tenant to enter into a life lease in

respect of a rental unit; (“offre de bail”)

“possession

date” means the date when a tenant is entitled to occupy a rental unit under a

life lease and the landlord is entitled to payment of rent under the lease;

(“date de possession”)

“pre-lease

payment” means an amount paid by a prospective tenant to a landlord as an

expression of interest in entering into a life lease in respect of a rental

unit in a residential complex under development or proposed to be developed;

(“paiement antérieur au bail”)

“prescribed”

means prescribed by a regulation made under this Act; (“prescrit”)

“projected

completion date” means the date disclosed to a tenant as the latest date when a

rental unit is to be available for occupancy by the tenant; (“date prévue

d'achèvement”)

“refund

fund” means one or more funds established under subsection 18 (2); (“fonds de

remboursement”)

“tenant”

means a tenant, as defined in the Residential Tenancies

Act, 2006 , under a life lease and includes a prospective tenant;

(“locataire”)

“trustee”,

in relation to a residential complex, means a trustee appointed by the landlord

of the complex to perform such functions as may be provided for under this Act

and the regulations. (“fiduciaire”)

PART II

PAYMENTS AND DISCLOSURE

Permitted

payments

(1) Subject to subsection (2), a landlord may

receive or permit a trustee to receive from a tenant a pre-lease payment or an

entrance fee in respect of a life lease or a residential complex.

Pre-lease

payments prohibited after occupancy date

(2) A

landlord shall not receive or permit a trustee to receive a pre-lease payment

from a prospective tenant of a residential complex on or after the occupancy

date of the complex.

Information

to be disclosed

(3) Before

receiving or permitting a trustee to receive a pre-lease payment, a landlord

shall disclose to the tenant, in accordance with the regulations,

(

a) the

estimated entrance fee that will be payable in respect of each type of rental

unit in the complex or each type in which the tenant has expressed an interest;

(

b) the

projected completion date;

(

c) prescribed

information regarding the governance and management of the complex, including

information regarding staffing, finances and the roles and responsibilities of

tenants;

(

d) the

estimated amount of any other fees that may be charged, including monthly

occupancy fees, and a

summary of the process by which any future increases to

fees are to be determined and communicated;

(

e) the

estimated amount of the refund that the tenant would receive upon termination

of the lease and information regarding the method of calculating that amount;

and

(

f) any

additional prescribed information.

Amount

of pre-lease payment

(4) A

landlord shall not receive or permit a trustee to receive a pre-lease payment

that exceeds the prescribed amount or the amount that is determined in a

prescribed manner.

Entrance

fees permitted

(5) A

landlord may receive or permit a trustee to receive an entrance fee from a

tenant if,

(

a) the

tenant has signed a life lease or an offer to lease and given it to the landlord;

(

b) the

landlord has disclosed to the tenant in accordance with the regulations,

(

i) if

the entrance fee is refundable, the minimum amount that will be contributed to

the refund fund, and

(ii) any

additional prescribed information;

(

c) the

landlord has given the tenant a written statement of the tenant's cancellation

rights;

(

d) where

the tenant is an initial tenant, the landlord has appointed a trustee to

receive and administer entrance fees; and

(

e) where

the entrance fee is refundable, the landlord has appointed a trustee to

administer a refund fund.

Acknowledgement

of receipt

6 A person who receives a payment in respect of a pre-lease

payment or entrance fee shall give the payer a written acknowledgement of

receipt, setting out the prescribed information.

Pre-lease

payment held in trust

(1) A landlord who receives a pre-lease payment

from a prospective tenant shall hold the amount in trust for the benefit of the

tenant until it is paid out in accordance with this

section or is otherwise

refunded by the landlord.

Pre-lease

payment: life lease entered

(2) Where

a landlord and a tenant enter into a life lease in respect of which the tenant

has paid a pre-lease payment, the landlord shall pay the pre-lease payment,

(

a) to

the trustee, to be credited to the entrance fee payable by the tenant; or

(

b) to

the tenant, if the entrance fee has been paid in full.

Pre-lease

payment: development not completed

(3) The

landlord shall refund a tenant's pre-lease payment, unless it has already been

paid to the trustee under clause (2) (a), if it becomes reasonable to conclude

that the development of the residential complex will not be completed by the

projected completion date disclosed to the tenant.

Pre-lease

payment: failure to enter into lease

(4) If

a tenant who paid a pre-lease payment in respect of a residential complex and

the landlord have not entered into a life lease by the occupancy date of the

complex, unless the pre-lease payment is refunded to the tenant, the landlord shall

pay the pre-lease payment,

(

a) to

the tenant, if by the occupancy date the landlord has not offered a life lease

lease of a rental unit in the same complex comparable to the rental unit in

which the tenant expressed an interest; and

(

b) in

any other case, to the trustee.

Time

of payment

(5) Each

amount payable under subsection (2), (3) or (4) shall be paid within 14 days

after it first becomes payable.

Entrance

fee held in trust

(1) A landlord or a trustee who receives an

entrance fee from a tenant shall hold it in trust for the benefit of the tenant

until the period for cancellation under subsection 9 (2) has expired.

Refund

of entrance fee to tenant

(2) In

prescribed circumstances, the landlord shall refund the full entrance fee or

cause it to be refunded to the tenant within the prescribed period of time.

Statement

of cancellation rights from landlord

(1) A landlord shall include, in accordance with

the regulations, a prescribed statement of cancellation rights in a life lease

that is given to a tenant.

Cooling-off

period

(2) Subject

to subsection (3), a tenant may, by written notice to the landlord before

taking possession of the rental unit, cancel his or her life lease within seven

days after the day on which the life lease or offer to lease signed by the

tenant is given to the landlord.

Statement

of cancellation rights not in lease

(3) If

a statement of cancellation rights is not included in the life lease or is not

in the prescribed form, the seven-day period under subsection (2) does not

commence until the day on which the landlord gives the tenant the prescribed

statement of cancellation rights.

Adequacy

of wording

(4) A

notice of cancellation is adequate if, however expressed, it indicates the

intention of the tenant to cancel the life lease.

Effective

date of cancellation

(5) A

life lease is cancelled under this

section when notice is given to the landlord

in accordance with the regulations.

Refund

of entrance fee to tenant

(6) If

a tenant cancels a life lease under this section, the landlord shall, within 14

days after notice is given under subsection (5), refund the full entrance fee

or cause it to be refunded to the tenant.

Failure

to give possession

(1) Subject to the regulations, a tenant of a

rental unit who has not been given vacant possession of the rental unit 30 days

after the projected completion date may, by written notice to the landlord

before being given vacant possession of the unit, cancel his or her life lease.

Effective

date of cancellation

(2) A

cancellation under subsection (1) is effective when notice of the cancellation

is given to the landlord in accordance with the regulations.

Early

notice

(3) A

tenant may, during the 30-day period after the projected completion date, give

the landlord early notice of cancellation, but the cancellation is effective

only at the end of the 30-day period and only if by that time the landlord has

not offered the tenant immediate and vacant possession of the rental unit.

Tenant

entitled to full refund

(4) A

tenant who cancels a life lease under this

section is entitled to a refund of

his or her full entrance fee.

Refund

within 60 days of cancellation

(5) The

landlord shall refund the entrance fee, or cause it to be refunded, to the

tenant within 60 days after the cancellation becomes effective.

Notice

of possession date

(1) A landlord shall give an initial tenant

written notice of the possession date at least 60 days before that date.

Tenant

may agree to earlier date

(2) A

tenant who receives notice under subsection (1) may agree to an earlier possession

date.

PART III

RESERVE FUNDS, INSURANCE AND ANNUAL REPORTING

Reserve

fund for prescribed landlord

(1) A prescribed landlord of a residential

complex shall, at all times after the occupancy date of the complex, maintain a

reserve fund to pay for any unforeseen major repair to or replacement of assets

of the complex, including, without limitation, roofs, exteriors, buildings,

roads, sidewalks, sewers, heating, electrical or plumbing systems, elevators

and laundry, recreational and parking facilities.

Same

(2) Under

no circumstances shall the reserve fund maintained for a residential complex be

used for any purpose related to another complex.

Use

of reserve fund

(3) In

addition to being used for the purposes set out in subsection (1), funds set

aside under that subsection may be used for such matters as may be prescribed.

Insurance

required

(1) The landlord of a residential complex shall,

at all times during and after the development of the complex, maintain one or

more insurance policies in accordance with the regulations.

Notice

to tenants

(2) The

landlord shall give at least 30 days prior written notice of any cancellation,

lapsing or reduction of the insurance required under subsection (1) to all

tenants of the residential complex.

Meetings

(1) The landlord of a residential complex shall,

at least four times in each calendar year, call a meeting of the tenants in

accordance with the regulations.

Timing

of meetings

(2) In

scheduling the meetings, the landlord shall ensure that a minimum of 60 days

have elapsed between meetings.

Notice

of meeting

(3) The

landlord shall give each tenant of the residential complex a written notice of

the time and place of the meeting at least 30 days and not more than 50 days

before the meeting.

Content

of notice

(4) The

landlord shall include in or with the notice the prescribed information, set

out in accordance with the regulations.

Same

(5) In

addition to complying with subsection (4), the landlord shall include in or

with the notice the following information if the meeting is a meeting referred

to in paragraph 1 of subsection (7):

1. A

statement setting out the revenues and expenses of the residential complex for

the preceding fiscal year.

2. A

detailed budget for the current fiscal year.

3. A

statement setting out the balance of the residential complex’s reserve fund.

4. Such

other information as may be prescribed.

Manner

of notice

(6) The

landlord shall,

(

a) deliver

a copy of the notice to each residential unit in the complex;

(

b) post

a copy of the notice in a prominent location in the complex that is accessible

to tenants;

(

c) send

the notice electronically, if the landlord and tenants regularly communicate by

email; and

(

d) give

the notice in such other manner as may be prescribed.

Meeting

(7) The

landlord shall ensure that the meeting is conducted in accordance with the

following rules:

1. At

least one meeting held during the first six months of each fiscal year must

include a review of the prescribed financial information regarding the

residential complex.

2. Such

other rules as may be prescribed.

Notice

of board meeting

(1) The landlord shall give each tenant

representative that has been selected by the tenants in accordance with the

regulations,

(

a) a

copy of the landlord's by-laws; and

(

b) notice

of the time and place of each board meeting, with the agenda for the meeting,

at the same time and by the same method that notices and agendas are given to

the directors.

Right

to attend and be heard

(2) A

tenant representative, or his or her alternate, is entitled to place matters on

the agenda for a board meeting and to attend and speak at the meeting.

Confidential

matters

(3) A

landlord may restrict the rights of a tenant representative under subsection

(2) to matters that do not involve personal information pertaining to individual

tenants or to personnel of the landlord.

Board

minutes

(4) After

each board meeting, the landlord must give each tenant representative a copy of

the minutes of the meeting, not including any part of the minutes that contains

personal information about a tenant or about personnel of the landlord.

Access

to minutes

(5) A

tenant representative may give other tenants access to the minutes.

Audited

financial statements

(1) If a prescribed landlord has not obtained

audited financial statements for the residential complex for the preceding

fiscal year, the landlord shall,

(

a) obtain

those audited financial statements as soon as practicable, if requested to do

so in writing by a majority of tenants; and

(

b) continue

to obtain audited financial statements for each succeeding fiscal year.

Tenant

entitled to a copy of audited statements

(2) If

a prescribed landlord has obtained audited financial statements for the

residential complex for the preceding fiscal year, whether obtained under

subsection (1) or otherwise, the landlord shall provide a copy of the

statements to a tenant on request.

Personal

information in financial statements

(3) For

the purposes of subsection (2), the landlord must take reasonable steps to

avoid disclosing personal information pertaining to personnel of the landlord.

information

17 A landlord shall ensure that contact information for the

management of the residential complex is given to each tenant on the tenant’s

occupancy date and that updated information is given to each tenant when the

information changes.

PART IV

TRUSTEES AND REFUNDABLE ENTRANCE FEES

Appointment

of trustee re entrance fees

(1) A landlord who enters into a life lease with

an initial tenant shall appoint a trustee to receive and administer the

tenant's entrance fee in accordance with this Act and the regulations.

Appointment

of trustee re refund fund

(2) If

an entrance fee in respect of a residential complex is refundable, the landlord

shall establish, and shall appoint a trustee to administer, a fund to secure

the landlord's obligations to refund entrance fees.

Qualifications

of trustee

(3) A

trustee in respect of a residential complex shall be a person who meets the prescribed

requirements and qualifications for trustees.

Entrance

fee paid to trustee

(1) Upon the expiry of the period for

cancellation, the landlord shall pay the full entrance fee of each initial

tenant, together with any interest earned on it, to the trustee, unless the

landlord has refunded it to the tenant.

Trustee

to hold entrance fees and pre-lease payments

(2) Any

pre-lease payments paid to a trustee and all entrance fees received by that

trustee, other than those entrance fees that are required to be refunded or

paid to a tenant, shall be held by the trustee for the benefit of the tenants

until the landlord has met the prescribed requirements.

Prerequisites

to payment

(3) A

trustee shall not pay to or for the benefit of the landlord any amount held by

the trustee under subsection (2) until the landlord has provided to the trustee

such information and documents as may be prescribed.

Use

of funds

(4) Funds

paid to or for the benefit of the landlord of a residential complex by the

trustee shall be used for such purposes as may be prescribed.

Minimum

refundable

20 The regulations may prescribe the circumstances in which an

entrance fee payable in respect of a residential complex is refundable and may

prescribe a minimum refundable amount.

Refund

fund

(1) If any entrance fee paid or payable in

respect of a residential complex is refundable, the landlord shall, before the

occupancy date of the complex, contribute the prescribed amount or the amount

determined in accordance with the regulations to the refund fund.

Refund

of entrance fees

(2) A

tenant whose entitlement to a refund of all or part of his or her entrance fee

has not been paid in full is entitled to be paid in accordance with the

regulations, out of the funds available in the refund fund, the balance owing

by the landlord to the tenant.

PART V

OFFENCES AND PENALTIES

Offence:

false or misleading statement

(1) A landlord, or a person who for consideration

is engaged in the marketing or development of a residential complex, is guilty

of an offence if the landlord or other person makes a statement that is false

or misleading with respect to any material fact or who omits to state any

material fact, the omission of which makes the statement false or misleading,

(

a) to

a prospective tenant that may induce or induces the tenant to enter into a life

lease; or

(

b) in

a life lease, an offer to lease, an advertisement offering or soliciting

interest in one or more life leases, or in any information required by this Act

or the regulations to be disclosed to a tenant.

Offence:

contravention of Act or regulations

(2) A

person who contravenes any provision of this Act or the regulations is guilty

of an offence.

Directors,

officers and agents

(3) Every

director, officer or agent of a corporation who authorizes, acquiesces in or

participates in an offence under subsection (1) or (2) is guilty of an offence

under subsection (1) or (2), as the case may be.

Defence

(4) No

person is guilty of an offence under this

section if the person can prove on a

balance of probabilities that he or she took reasonable steps to avoid the

commission of the offence.

Penalties

(5) A

person guilty of an offence under this

section is liable on

summary conviction,

(

a) in

the case of an offence under subsection (1),

(

i) by

an individual, for a first offence, to a fine of not more than $20,000 or to

imprisonment for a term of not more than one year, or both, and for a

subsequent offence, to a fine of not more than $30,000 or to imprisonment for a

term of not more than three years, or both, and

(ii) by

a corporation, for a first offence, to a fine of not more than $50,000 and for

a subsequent offence, to a fine of not more than $60,000; and

(

b) in

the case of an offence under subsection (2),

(

i) by

an individual, for a first offence, to a fine of not more than $3,000 or to

imprisonment for a term of not more than one year, or both, and for a

subsequent offence, to a fine of not more than $10,000 or to imprisonment for a

term of not more than three years, or both, and

(ii) by

a corporation, for a first offence, to a fine of not more than $10,000 and for

a subsequent offence, to a fine of not more than $25,000;

Same

(6) A

court convicting a person under this

section may, in addition to any other

penalty, order the person to pay compensation or restitution in respect of the

offence.

Limitation

(7) A

prosecution for an offence under this

section may be commenced not later than

one year after the day on which evidence sufficient to justify a prosecution

for an offence under this

section came to the knowledge of the Minister.

PART VI

REGULATIONS

Regulations

by L.G. in C.

23 The Lieutenant Governor in Council may make regulations,

(

a) governing anything that is required or

permitted to be prescribed or that is required or permitted to be done by, or

in accordance with, the regulations or as authorized, specified or provided in

the regulations;

(

b) defining

any word or expression used in this Act but not specifically defined in this

Act;

(

c) exempting

residential complexes, rental units, tenants or landlords under life leases, or

a class of any of them, from this Act or the regulations or a specified

provision of this Act or the regulations;

(

d) governing

the assignment of life leases in circumstances where assignment is not

addressed in a life lease agreement;

(

e) governing

notices required to be given under this Act;

(

f) governing

transitional matters relating to the coming into force of this Act;

(

g) governing

conflicts between this Act and other Acts;

(

h) respecting

any other matter the Lieutenant Governor in Council considers necessary or

advisable to carry out the intent and purposes of this Act.

PART VII

COMMENCEMENT AND

SHORT TITLE

Commencement

24 This Act comes into force on a day to be named by

proclamation of the Lieutenant Governor.

Short

title

25 The

short title of this Act is the Life

Leases Act, 2023 .

Date Bill stage Event Outcome Committee

June 6, 2023

First Reading

Ordered for Second Reading

June 6, 2023

First Reading

Vote

Carried

First Reading

June 6, 2023

Carried

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Document details

Collection	Ontario — Bills
Citation	Bill 125, 43-1
Type	bill
Volume / chapter	p43 s1 bill-125 html
Language	en
Format	html
Source	PROVINCIAL
Identifier	848bd1e4cc9c134f75359fd18cf1467521c8c49e

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