The family of a Calgary woman is raising concerns about a seniors accommodation market in Alberta that seems to be essentially unregulated.

Janet Wilson, who CBC has agreed not to use her real name to protect her identity, was in her mid 80s when she decided to sell her Calgary condo and move into an independent living facility in the city’s northwest. 

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She found a two-bedroom, two-bathroom unit with a full kitchen that cost $190,000 as well as a monthly occupancy fee that covered food, housekeeping and other services.

Wilson was happy there, but her health care needs changed as she aged and she needed more day-to-day assistance.

After seven years, Wilson moved into an assisted living facility owned by the same company — real estate developer Statesman.

When Wilson moved out, her family — which now had control of her finances — says she had signed an agreement that didn't allow her to capture any market gains in the value of her unit.

Although she had lived there for seven years during a real estate boom in Calgary, her family says her contract stated it would sell her unit back to the facility for the same price she bought it for, minus a few thousand dollars for refurbishing.

“We did expect Janet to get some money back, simply because she was moving from a very large unit to a much smaller one (in a different facility),” says Wilson’s niece.

Somewhere between ownership and renting

“But when the paperwork came through we learned that she had to put more equity in.”

Wilson's monthly occupancy fee rose at the assisted living facility to $3,000 per month for extra care, and the roughly $190,000 in equity she has in her unit depletes by 10 per cent per year. 

So after a decade, it would be gone and Wilson will have to move out if she is still alive.

It seems Wilson and her family stumbled into a market that is somewhere between ownership and rental — often called a life lease or quality assurance agreement — and is not regulated in Alberta, so there are no laws to protect seniors.

The life lease has a long history in Canada, and is usually supported by non-profit organizations or community groups.

Kate Manser, the president of Lumina Consulting, is a big advocate for life leases in general because research has shown that residents tend to feel like they’re part of a community.

In many provinces, such as Ontario and Saskatchewan, life leases allow residents to capture the capital appreciation of their units.

But Manser points out that they are different in Alberta.

“In an Alberta life lease, you would have a choice of paying say $4,000 a month for your apartment and your whole package of services, or you could pay $200,000 upfront and then $2,000 a month," she said. "You put the prepaid rent up front, your monthly costs are lower, and then when you move out, you get varying amounts of the $200,000, maybe 80 or 90 per cent.”

Manser wasn’t familiar with Wilson’s arrangement with Statesman, but suggested that by paying for the equity upfront it should lower Wilson’s monthly payments, making it a reasonable option for someone who has equity from selling a property.

For-profit seniors housing market growing

Statesmen didn’t respond to a request for an interview.

Life leases have become more common in Alberta, part of the tremendous growth in the private for-profit seniors accommodation market.

In Calgary alone, seven private independent or assisted living facilities have be built in the past five years.

Many charge rent, which ranges from $3,000 to $7,000 a month, but the option to add equity to prepay rent is also growing.

Wendy Armstrong, with the Alberta Consumer’s Association, watches senior’s issues very closely. She says that seniors who are considering this kind of move are at a vulnerable point in their lives.

“People are expected to have assets from the sale of a house and use those assets for rent or to invest through a life lease and hope that you have still enough income to pay to the monthly fees," said Armstrong. "It’s like an inheritance tax, you have to spend every penny before you die.”

That is the situation that Wilson’s family is worried about, that she will not have enough to manage the monthly fees that will go up as she needs more care.

Armstrong says this problem is not likely to go away, simply because there aren’t many options for seniors.

“One of the huge drivers of people moving into these kinds of settings is with our discharge policies from hospitals," she said. 

"If you live on your own, you’re discharged very soon without adequate support, so other than a family member taking two or three weeks off work, there’s nowhere to turn for help. The attraction of many of these residences is that there’s something in place or someone who can monitor them if they get sick.”

Armstrong says Albertans need to a place to go for advice.

“We all want more responsive care where people can lead more normal lives, but what people haven’t realized is how many of the costs and responsibilities of care are off loaded to the individual and their families," she said. "What we also need is an independent place where people can go to get more information and counselling and more access to legal support.”