# Retriement living concept..you buy it but continue paying after you are gone



## carverman (Nov 8, 2010)

This interesting CBC GO Public article caught my eye.

Apparently, they have come up with yet a new scheme to milk seniors and keep on milking them (or their families) after
they are long gone. 

After all..if you signed the contract..you are on the hook and there is nothing you can do about it..except try to rent it out because you can't sell it anymore. 

http://www.cbc.ca/news/canada/briti...tinue-after-seniors-die-or-move-out-1.3003411


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## Davis (Nov 11, 2014)

It's not dissimilar to a regular condo or strata, though. If your apartment is vacant, you still have to pay the condo/strata fees because the corporation still has its expenses. It is not the same because condos and stratas don't usually have restrictions (e.g., age) on who can live there, but co-operatives often impose restrictions to prevent anyone butthe owner from living in the apartment -- if you move out, you can't rent it, so either you sell it, or keep it vacant and keep paying for the upkeep of the building.

It does sound like a bad deal, but one that the buyer should have understood when signing up.


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## Userkare (Nov 17, 2014)

Davis said:


> It's not dissimilar to a regular condo or strata, though.


The article states that this is on top of the regular condo fee...

"_However, the company also requires owners like him to continue to pay hefty monthly fees, which cover residents’ meals, housekeeping, recreation and other services, even after their unit is vacant. The fees are over and above the owners’ strata (condo) fees._"

I could understand needing to continue paying the condo fees to maintain the common areas; but in this case, they're being asked to continue paying for meals and recreation for a deceased person.


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## Davis (Nov 11, 2014)

I guess I read the article too quickly - I saw the $200-300 break for meals, but would have to take a look at the more detailed breakdown of costs. Housekeeping for the building would be a reasonable cost, but that should be part of the stara feees. Housekeeping for a vacant apartment does not seem reasonable.


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## carverman (Nov 8, 2010)

Userkare said:


> The article states that this is on top of the regular condo fee...
> 
> "_However, the company also requires owners like him to continue to pay hefty monthly fees, which cover residents’ meals, housekeeping, recreation and other services, even after their unit is vacant. The fees are over and above the owners’ strata (condo) fees._"
> 
> I could understand needing to continue paying the condo fees to maintain the common areas; but in this case, they're being asked to continue paying for meals and recreation for a deceased person.


It's just a new scam to lift some of those retirement funds from seniors. The problem in the cases where the affected seniors bought these units outright is now they can't sell them individually any more. The company that bought them won't allow that, just rental of the units so that they can collect their $1000 month indefinitely...even if they offer a $200 rebate on the meals that the senior (who has moved out or died)
is no longer using. 


> Retirement Concepts then bought the majority of suites in the building and took over the service agreements with 17 other individual owners.


it was probably a bad deal for the affected seniors to buy these units in the first place, but at the time the units
were offered for sale..it was later on when the Retirement Concept bought the building and grandfathered the
owned units in their sheme of rentals. Although the article doesn't mention it, the other apartments are more than
likely rentals and once the senior dies or moves out, the payments don't apply..as long as they can find someone else
to rent the unit(s).

It's a catch 22...the owners can't sell their units anymore...and there are more rental units than new prospective renters.


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## Beaver101 (Nov 14, 2011)

carverman said:


> It's *just a new scam to lift some of those retirement funds from seniors.* ... .





> it was probably a bad deal for the affected seniors to buy these units in the first place, but at the time the units
> were offered for sale..it was later on when the Retirement Concept bought the building and grandfathered the
> owned units in their sheme of rentals. Although the article doesn't mention it, the other apartments are more than
> likely rentals and once the senior dies or moves out, the payments don't apply..as long as they can find someone else
> ...


... the scam part is my first thought. 

What is the difference between these 17 units with contracts that are unbreakable versus the other rentable units? Would a real estate lawyer (or lawyers) not have reviewed these contracts prior to purchase and provide some kind of advice what these seniors and their families were getting into? Or somewhere along the line, were those affected contracts modified? 

Would be interesting if Ms. Berubeland can provide some input here.


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... the scam part is my first thought.
> 
> What is the difference between these 17 units with contracts that are unbreakable versus the other rentable units?


That is the main question here..I would expect it had something to do with the maintenance fee of the units.
if the existing owners at the time signed that the Condo Corp would do the maintenance in exchange for a set fee,
rather than have the owners do it themselves..(ie a condo corporation where registered owners are responsible for common element maintenance must pay a monthly fee..(condo fee)...or if the new contract the seniors signed was for "*complete care", including 3 meals a day*). 

From what I read, some of the owners that got duped by the Retirement Concept corp were later diagnosed with Alzehiemers, and had to be transfered to a LTC.
This would also be true for any medical situation where the senior could no longer live there without 24/7 supervision.

[/quote]
Would a real estate lawyer (or lawyers) not have reviewed these contracts prior to purchase and provide some kind of advice what these seniors and their families were getting into? Or somewhere along the line, were those affected contracts modified? 

Would be interesting if Ms. Berubeland can provide some input here.[/QUOTE]

Yes..we need Ms 'B' to expand on this. From what I read, these retirement units were sold for $175k at the beginning, then later on, "the corporation" bought the building(s) for rental purposes to seniors, and incorporated any of the sold units into some kind of agreement that obviously is a contractual obligation that can't be broken.

In the case of one senior that died, his son has to pay them $1000 a month for an empty unit until it is sublet. ..nasty!


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... From what I read, some of the owners that got duped by the Retirement Concept corp were later diagnosed with Alzehiemers, and had to be transfered to a LTC ...


I can see complaining that the Retirement Concept group is not deviating from what's quoted as "standard rebates" or break the contract. 

The duping (if any) seems to be more the responsibility of "original building owner planned to add an assisted living wing" that the contract was signed with.




carverman said:


> ... From what I read, these retirement units were sold for $175k at the beginning, then later on, "the corporation" bought the building(s) for rental purposes to seniors, and incorporated any of the sold units into some kind of agreement that obviously is a contractual obligation that can't be broken.


 ... which seems to have already been in place as "Retirement Concepts then bought the majority of suites in the building and took over the service agreements with 17 other individual owners."




carverman said:


> ... In the case of one senior that died, his son has to pay them $1000 a month for an empty unit until it is sublet. ..nasty!


Worse ... the son is too young to be able to at least make use of it until finding a sublet. 


Cheers


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## carverman (Nov 8, 2010)

Eclectic12 said:


> I
> 
> ... which seems to have already been in place as "Retirement Concepts then bought the majority of suites in the building and took over the service agreements with 17 other individual owners."


This is what appears to be the crux of the matter. What the article doesn't say is under what conditions/arrangements the original 17 owners who bought their places at 175K, and why they would even buy them in the first place...unless they were thinking that these places become part of 
their estate once they pass on. 

Retirement Concepts offer different levels of senior living:


> Independent Living: Designed for seniors who don’t wish to remain home alone anymore and who prefer the lifestyle of retirement living communities, where they are no longer isolated. Living with neighbours their own age.


Assisted Living: 


> In most Assisted Living buildings residents live independently in comfortable apartments. They receive two meals a day (usually lunch and dinner), often a bistro breakfast snack if necessary and housekeeping and flat linen laundry service is provided.


In addition assisted living housing offers seniors the use of all the facilities and amenities in the building, which includes such things as a theatre, craft room, activity rooms, exercise room, corner store, hairdresser/barber, spa, bistro, gardens, lounges, decks, outdoor walking paths, and 24 hour emergency response.


> The criteria for assisted living is that residents must be self directing and must be somewhat mobile. When we say somewhat mobile, we mean they must be able to transfer. Use of a cane, walker or even wheelchair is permitted as long as the resident is able to transfer from the wheelchair to bed, chair etc.


So it would seem them, that once the owners of these units signed up with Retirement Concepts, they are
part of a full care facility, assimulated into the rest of the properties and units that Retirement Concepts own. 
Obviously, the remaining owners can still sublet to seniors over 55, if they leave these units for more serious
health reasons (dementia) or die, but they may have difficulty selling these units now..as Retirement Concepts would be involved to prevent any sale to people that want to buy them... as an investment rather than live in them..assuming they are age 55.


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## Beaver101 (Nov 14, 2011)

^ So what happens if these owners (deceased or not) refuse to pay all these fees because either they can't (no money) or they'll be dead eventually. Will Retirement Concepts put a lien, take possession of these units or go after the estate to claim back ownership of these units? The no-escape clause(s) imposed all sound predatory in the first place and there is no (consumer-protection) law for this?


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## carverman (Nov 8, 2010)

Beaver101 said:


> ^ So what happens if these owners (deceased or not) refuse to pay all these fees because either they can't (no money) or they'll be dead eventually. Will Retirement Concepts put a lien, take possession of these units or go after the estate to claim back ownership of these units? The no-escape clause(s) imposed all sound predatory in the first place and there is no (consumer-protection) law for this?


I would think, Beav, that the owners (or the inheritors of these units) have to pay the fees,otherwise the Retirement Concept could go after them (contractural agreement), and either place a lien or somehow, deduct the fees + legal costs against the units and when enough outstanding money is accumulated..force a sale from the owners or inheritors at a much lower discounted price.

Here's my view on this rather "one sided arrangement"..
I doubt that the owners of these remaining private units can put these units on the open real estate market, because the owners of the assisted living scheme (Retirement Concepts) do not want anyone making a profit from these 17 owned units, unless they make the profits themselves. 
I'm sure that if the inheritors just signed away their rights to "mom or dad's" condo unit, they would be very happy...otherwise its'
pay $1000 a month (and condo fees + property taxes on condo units) for x years...lets say it works out to $1000 + $200 +$100 in property taxes on each condo unit (forever)..that's at least $1300 a month (estimated of course)...$15.6K a year. Not sure if the $200 discount for NOT PROVIDING meals to the deceased or LTC owner is in or out. 

In ten years, if the owners/inheritors can't find a renter that meets all the requirements of Retirement Concept enterprises, that's around $156k they have already spent on a unit they "own" yet can't use themselves (unless they are age 55) or profit from by renting.

I somehow doubt however, that the inheritors of "dad"s estate, would put up paying these steep fees out of their own pocket for that long....
so it may be a case of " Let's make a deal here...sell it to us well below market price if you want to get rid of it"


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## Eclectic12 (Oct 20, 2010)

carverman said:


> This is what appears to be the crux of the matter. What the article doesn't say is under what conditions/arrangements the original 17 owners who bought their places at 175K, and why they would even buy them in the first place...


They quote the sister as saying he signed for the meal plan with the original owner and later refer to new owner "taking over the service agreements". If the new owner changed the agreement in place, I'd expect then the agreement could be broken on both sides.

My aunt bought into a complex like this in Welland, where there was town homes, apartments and nursing home type care from day one. In her case, the plans were options that were pay as you go ... her daughter had no problem selling the town home when she died.




carverman said:


> So it would seem them, that once the owners of these units signed up with Retirement Concepts, they are part of a full care facility, assimulated into the rest of the properties and units that Retirement Concepts own.


Just because there's full care offered does not mean it's offered at all locations owned by the company.

Then too, as I read the article ... there was no "sign up with Retirement Concepts", the existing agreement was taken over.




carverman said:


> Obviously, the remaining owners can still sublet to seniors over 55, if they leave these units for more serious health reasons (dementia) or die, but they may have difficulty selling these units now..as Retirement Concepts would be involved to prevent any sale to people that want to buy them... as an investment rather than live in them..assuming they are age 55.


The problem is there isn't a market to rent or sublet due to the glut of privately owned retirement suites across the country. If the new owner thought they could could buy out the existing owners at a reasonable price and rent it out, I'm sure they'd jump on it. This would save the bad press as well as simplify the setup.


Cheers


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... Here's my view on this rather "one sided arrangement"..
> I doubt that the owners of these remaining private units can put these units on the open real estate market, because the owners of the assisted living scheme (Retirement Concepts) do not want anyone making a profit from these 17 owned units, unless they make the profits themselves.


The owners say they have put it on the market, with price reductions where the pre-existing service agreement is scaring off buyers.



carverman said:


> ... I somehow doubt however, that the inheritors of "dad"s estate, would put up paying these steep fees out of their own pocket for that long....
> so it may be a case of " Let's make a deal here...sell it to us well below market price if you want to get rid of it"


Until something changes the combination of what's being paid and the rental market - this won't happen as I'd expect the two rounds of price reductions and a third cut on the way would have put the price low enough for the a low ball bid but clearly this isn't attractive.


Cheers


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## carverman (Nov 8, 2010)

Eclectic12 said:


> They quote the sister as saying he signed for the meal plan with the original owner and later refer to new owner "taking over the service agreements". If the new owner changed the agreement in place, I'd expect then the agreement could be broken on both sides.
> 
> My aunt bought into a complex like this in Welland, where there was town homes, apartments and nursing home type care from day one. In her case, the plans were options that were pay as you go ... her daughter had no problem selling the town home when she died.
> 
> ...


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... It's the maintenance fee and according to the article...a contract is a contract and they claim that it can't be broken.


 ... which reinforces that it was signed with the original owner and the takeover company has left it as is. Maybe someone with more legal experience can comment but I'd expect any changes to the contract would need approval and delivering anything less than what's in the contract would be breach of contract - letting the relatives do something about it.




carverman said:


> ... Doesn't say how involved the deceased owner was aware of this...


A notice/letter in the mail box? When the mortgage companies buy/sell mortgages - how are the home owners notified? When a grass cutting service is bought out by another company - how are the clients notified? 

How involved were the Met Life or London Life insurance customers sold off their business? What changed in their life insurance contracts without mutual agreement?




carverman said:


> ... I'm sure that that may be the case eventually..because 17 units at say $175k each is nearly 3 million.


With a third round of price reductions on the way ... I'd expect that the chance of buying for less than $175K (no idea of how much less) so that it would be occupied by someone paying the full rate would make business sense ... never mind, dealing with one set of residents (i.e. 100% renters) instead of two.


Cheers


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## carverman (Nov 8, 2010)

Eclectic12 said:


> ..
> With a third round of price reductions on the way ... I'd expect that the chance of buying for less than $175K (no idea of how much less) so that it would be occupied by someone paying the full rate would make business sense ... never mind, dealing with one set of residents (i.e. 100% renters) instead of two.


It may be a case of oversupply of these retirement homes at prices most seniors simply cannot afford.
so the managing company is not interested in buying them..just collecting their monthly fees.



> *Independent living is pricey – ranging between $3,000 and $8,000 a month – and most seniors aren't interested in it until they hit their eighties, and only then when they're healthy.
> 
> 
> 
> ...


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## Eclectic12 (Oct 20, 2010)

carverman said:


> It may be a case of oversupply of these retirement homes at prices most seniors simply cannot afford.
> so the managing company is not interested in buying them..just collecting their monthly fees.


It has to be at minimum an oversupply of both the rental *and* the ownership unit types for that area, if not the country in general. 

The company is collecting $200 to $300 less for the vacant owned suite. If they could rent it, the fees collected would increase at the same time as it seems clear that the owned units could be purchased at under $175K (there's no indication of how much a discount or what the average buying price worked out to for the rental suites). Never mind that there might be some savings from owning only one type of unit (i.e. rentals) instead of having to deal with two.


They are also having trouble with the rentals so both could be over-priced.

Cheers


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