Hundreds of Albertans, including 40 in St. Albert, are still in the queue waiting for life lease repayments from the Christenson Group of Companies (CGC), and a letter sent by the company to its residents is blaming the Government of Alberta's current regulations for their inability to pay.
A life lease — also called an entrance fee — is a sum of money, typically around $200,000, paid up front in exchange for cheaper monthly rent payments. These payments are meant to be refunded when a resident moves out or passes away.
At homes operated by CGC, there is a clause stating that once a building reaches a six per cent vacancy rate, loans will enter a queue to be paid at a later date. But in a letter to residents CGC president Greg Christenson said new legislation that would require the company to pay interest fees on outstanding leases could hamper their ability to repay residents.
Karin Dowling, a resident of St. Albert and past president of the Alberta Life Lease Protection Society (ALLPS), says her mother-in-law is still in the queue after moving out of Devonshire Village in Edmonton in Dec. 2021. She said the talk of insolvency and the prospect of life leases not being repaid is worrying and frustrating.
"It's definitely a scary thing," Dowling said. "When you look at the size of a company like this, $100,000 should not make a company insolvent at all."
As of Dec. 31, 2024, there are currently 217 outstanding life lease loan refunds for all nine CGC facilities in Alberta. The total outstanding amount that has yet to be refunded has nearly reached $75 million.
At St. Albert's Citadel Village, there are a total of 40 loans in the queue as of Dec. 31, 2024. The total amount outstanding has surpassed $13 million.
Dowling said that ALLPS would like to see more efforts from Christenson Group and the government to make people waiting on life lease repayments whole. She said the group will meet with Morinville-St. Albert MLA and Red Tape Reduction and Service Alberta Minister Dale Nally on Feb. 20.
"We're basically asking the government to be more creative when working through this, whether it might be taking over the operations of the buildings," Dowling said.
"Obviously there's regulations in place that are not working. The actual life lease legislation isn't helping anybody who's currently in the queue," she said. "The government has always stated that they promised to help make all the life lease holders whole. And that hasn't happened yet."
The government taking over the buildings is one potential solution she wants Alberta to look into. Another option she posed was having the government repay the seniors' life leases, and then enter a direct agreement with Christenson to be paid back.
"Part of this is because the amount of stress and strain that is going on in these seniors' lives, and their families' lives," she said. "This is hundreds of thousands of dollars, right? It's not just little bits of money here. These people need some reprieve from this."
Interest hampering payments
Nally introduced Bill 12, the Consumer Protection (Life Leases) Amendment Act in 2024, which states that a "building operator must return the leaseholder's entrance fee within 180 days of termination of a life lease." If they don’t comply, they can face fines or jail time.
On Nov. 7, 2024, the province passed the Life Leases Interest Rate Regulation, which establishes a fixed nine per cent interest rate on unreturned entrance fees after 180 days. The interest rate only applies to life leases terminated after May 16, 2024, the date when the Consumer Protection (Life Leases) Amendment Act came into effect.
The Life Leases Interest Rate Regulation states that a lease operator "must pay the interest accrued each month on any unreturned portion of the entrance fee to the former leaseholder or the former leaseholder’s agent or estate within 5 business days of the last day of the month in which the interest accrued."
In a letter sent to Christenson residents, Christenson said the interest-only payments will hamper the company's ability to repay those in the queue.
"As life lease terminations increase, the volume of interest payments will rapidly surpass our available funds, making it impossible to refinance assets or make principal payments toward the queue as previously planned," Christenson said in the letter. "The resulting strain on cash flow will also lead to insolvency for each property with life lease loans, and stop refinancing plans."
In an emailed statement, Minister Nally's Press Secretary Brandon Aboultaif said that they "expect life lease operators to structure their operations in a manner where they can be compliant with the legislation."
He also said that the government has no intentions of taking over Christenson's operations, or assume life lease holders debts.
"It is important that former and current life leaseholders are repaid as quickly as possible. However, the government will not assume financial debts of life lease companies, or take over their operations," he said.
The ministry continues to meet with Christenson Group of Companies on a regular basis to hear updates on their repayment efforts, and to encourage repayments as soon as possible. Leaseholders also continue to have the option of filing a consumer complaint with the Consumer Investigations Unit or pursuing action through the courts."
Aboultaif said the upcoming meeting with ALLPS is intended to maintain open communication about the situation, and encouraged them to "continue to hold operators responsible for their contractual obligations and pay the money owed to life leaseholders."
Christenson did not respond to the Gazette's request for comment in time for publication. In the letter sent to residents, he said Christenson Communities Limited "is committed to repaying all life lease loans and contracted interest."
