This is an unofficial archived version.
This version was current from June 17, 2010 to June 29, 2010.Note: It does not reflect any retroactive amendment enacted after June 29, 2010.
To find out if an amendment is retroactive, see the coming-into-force provisions
at the end of the amending Act.
C.C.S.M. c. L130
The Life Leases Act
(Assented to June 29, 1998)
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
INTERPRETATION AND APPLICATION
In this Act,
"development" means
(a) the purchase, construction, rehabilitation or purchase and rehabilitation of residential premises to form a residential complex, or
(b) the conversion, or purchase and conversion, of non-residential premises into a residential complex,
and includes the acquisition of land and all activities ancillary to the development of the complex, but does not include the construction or provision of a tenant's extra; (« aménagement »)
"entrance fee", in relation to a rental unit, means an amount, other than a security 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, 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, if the agreement is entered into after the coming into force of this Act in respect of a rental unit in a residential complex in which no unit has been the subject of a life lease that was entered into before the coming into force of this Act,
and includes any separate agreement under which the entrance fee has been paid or is payable; (« bail viager »)
"minister" means the member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; (« ministre »)
"non-profit landlord", in relation to a residential complex, means a landlord of the complex that is a corporation
(a) to which Part XXII of The Corporations Act applies, and
(b) that meets any prescribed requirements as to payments to its members, directors and officers and as to the distribution of its property on dissolution or at any other time; (« locateur sans but lucratif »)
"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;
"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 19(2); (« fonds de remboursement »)
"tenant" means a tenant, as defined in The Residential Tenancies Act, under a life lease or assignment of a life lease and includes a prospective tenant; (« locataire »)
"tenant's extra" means an alteration or improvement that is agreed to by the landlord and the tenant before the rental unit is first occupied by the tenant under a life lease, and
(a) in the case of an initial tenant, means an alteration or improvement to the landlord's standard specifications respecting the tenant's rental unit, and
(b) in the case of a tenant other than an initial tenant, means an alteration or improvement to the tenant's rental unit; (« extra du locataire »)
"trustee", in relation to a residential complex, means a trustee appointed by the landlord of the complex to receive and administer entrance fees, to hold and administer the refund fund or to hold and administer the refund fund and the mortgage referred to in section 28. (« fiduciaire »)
Every term or expression in this Act other than "regulation" that is not defined in this Act and is defined in The Residential Tenancies Act has the same meaning in this Act as in The Residential Tenancies Act.
For the purposes of this Act, an entrance fee in respect of a rental unit shall be considered to be refundable if, when the tenant takes possession of the rental unit, the landlord is obligated, absolutely or contingently, to effect any undertaking under which the tenant is or may be entitled to be paid an amount, other than a refund of a security deposit, on or after the termination of the tenant's tenancy of the rental unit.
In this Act, where a life lease is in respect of a rental unit not yet in existence, "rental unit" means the proposed rental unit and "residential complex" means the residential complex or proposed residential complex in which the proposed rental unit is to be located.
Except as otherwise provided in this Act or the regulations, this Act applies to and in respect of every life lease, every tenant and landlord under a life lease, every rental unit that is the subject of a life lease and every residential complex that contains such a rental unit, whether the life lease is entered into or the rental unit or residential complex comes into existence before or after this Act comes into force.
This Act binds the Crown.
Non-application to living accommodation
This Act does not apply to premises occupied as living accommodation as referred to in subsection 3(1) of The Residential Tenancies Act.
If there is a conflict between this Act and any other Act, this Act prevails.
If there is a conflict between a provision of an agreement and a provision of this Act, the provision of this Act prevails.
Restriction or waiver of application void
A provision of an agreement that restricts or waives or purports to restrict or waive the application of this Act, or a person's rights or obligations under this Act, is void.
Residential complex on leased land prohibited
No landlord shall enter into a life lease in respect of a rental unit in a residential complex located on leased land.
Exception for pre-existing residential complexes
Subsection (1) does not apply to any rental unit in a residential complex where, before the coming into force of this Act, the landlord has entered into a life lease of a rental unit in the complex.
PAYMENTS AND DISCLOSURE
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.
Payments subject to section 6 requirements
After the coming into force of this Act, except as otherwise provided in Part 6, a landlord who receives or permits a trustee to receive a payment under subsection (1) shall comply with the requirements of section 6.
Pre-lease payments prohibited after occupancy date
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.
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; and
(c) any additional prescribed information.
A landlord shall not receive or permit a trustee to receive a pre-lease payment that exceeds an amount that is prescribed or determined in a prescribed manner.
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 under section 10;
(d) where the tenant is an initial tenant, the landlord has appointed a trustee under subsection 19(1) to receive and administer entrance fees; and
(e) where the entrance fee is refundable, the landlord has appointed a trustee under subsection 19(2) to administer a refund fund.
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.
Content of acknowledgement of receipt
The acknowledgment of receipt shall set out the following:
(a) the amount received;
(b) the date it was received;
(c) the purpose of the payment;
(d) if available, the address or location of the rental unit and residential complex in respect of which the payment was made.
PRE-LEASE PAYMENTS
Pre-lease payment held in trust
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
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 appointed under subsection 19(1), 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
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
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 to the tenant on terms and conditions comparable to those contained in a life 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 appointed under subsection 19(1).
Each amount payable under subsection (2), (3) or (4) shall be paid within 14 days after it first becomes payable.
ENTRANCE FEES
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 10(2) has expired.
General limitation on use of entrance fees
Except as otherwise provided in this Act or the regulations, entrance fees and any income or gains earned or realized by the landlord, directly or indirectly by means of a trust or any other means, from the investment of entrance fees may be used only for the purposes of the residential complex in respect of which they were received.
Refund of entrance fee to tenant
If
(a) the tenant withdraws the offer to lease before it is accepted by the landlord; or
(b) the landlord rejects the tenant's offer to lease or fails to accept it within the time permitted for acceptance;
the landlord shall, within 14 days after that event, refund the full entrance fee or cause it to be refunded to the tenant.
CANCELLATION RIGHTS
Statement of cancellation rights from landlord
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 other than an assignee.
Subject to subsection (3), a tenant, other than an assignee, 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
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.
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
A life lease is cancelled under this section when notice is given to the landlord in accordance with section 39.
Refund of entrance fee to tenant
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.
ASSIGNMENT OF LIFE LEASES
A tenant may assign a life lease unless
(a) the lease prohibits assignment; and
(b) the lease provides that at least 95% of the entrance fee, other than any portion of it that was paid for tenant's extras, paid in respect of the lease is refundable.
A tenant who assigns a life lease may receive consideration for the assignment from the assignee.
On the assignment of a life lease the term of which is for the life of the tenant, unless the landlord, tenant and assignee amend the lease to provide for a term that is for a fixed number of years or for the life of the assignee, the lease is deemed to be amended to provide for a term that is for the life of the assignee.
Where a certificate of title has been issued under The Real Property Act for a leasehold estate respecting a rental unit that is subject to a life lease,
(a) if the life lease is assigned, a transfer of the leasehold estate may be registered under subsection 85(1) of The Real Property Act, with a copy of the assignment attached as evidence; and
(b) if the term of the life lease is amended or deemed to be amended as referred to in subsection (3), the amendment may be registered under subsection 91(3) of The Real Property Act.
No person shall register an instrument described in subsection (4) before the period for cancellation referred to in subsection 12(1) has expired.
No action against district registrar
No action lies or is maintainable against a district registrar or Land Titles Office under The Real Property Act for damages that accrue by reason of any action of the district registrar or Land Titles Office as a result of registration under this section or a failure to present an instrument described in subsection (4) for registration.
No tenant shall assign a life lease and no landlord shall provide its consent to the assignment of a life lease unless the assignee has been given the following, set out in the prescribed manner:
(a) the prescribed information respecting the lease and the residential complex;
(b) a prescribed statement of the assignee's cancellation rights under section 12.
An assignee of a life lease may, by written notice to the assignor and the landlord before taking possession of the rental unit under the assignment, cancel the assignment within seven days after the latest of the following:
(a) the day that the assignor signs the assignment;
(b) the day that the assignee signs the assignment;
(c) the day that the landlord provides its written consent to the assignment;
(d) if the statement of cancellation rights required by subsection 11(7) is not given to the assignee before he or she signs the assignment, or is not set out in the prescribed form, the day that the statement is actually given to the assignee.
A notice of cancellation is adequate if, however expressed, it indicates the intention of the assignee to cancel the assignment.
Effective date of cancellation
A cancellation under subsection (1) is effective when notice of the cancellation is given to the assignor and the landlord in accordance with section 39.
Refund of amount paid for assignment
An assignee who cancels an assignment under subsection (1) is entitled to a refund, within 14 days after giving notice of the cancellation, of any amount paid in respect of the assignment.
Despite the terms of an assignment or agreement for assignment of a life lease, the assignee may hold back all or any part of the amount payable to the assignor in consideration for the assignment until the expiry of the period for cancellation provided for in subsection (1).
FAILURE TO GIVE POSSESSION
Subject to subsection (6), 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
A cancellation under subsection (1) is effective when notice of the cancellation is given to the landlord in accordance with section 39.
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
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
The landlord shall refund the entrance fee, or cause it to be refunded, to the tenant within 60 days after the cancellation becomes effective.
If, on an application made by the landlord, a judge of the Court of Queen's Bench determines that the failure to give possession within the time period required by subsection (1) was due to unavoidable delay in completing the development of the rental unit and was not the fault of the landlord, the judge may extend the time for completion.
NOTICE OF POSSESSION DATE
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
A tenant who receives notice under subsection (1) may agree to an earlier possession date.
CHANGE IN LANDLORD
Subject to subsection (2), a person who acquires a landlord's interest in a residential complex or a rental unit is deemed to be the landlord under each subsisting life lease.
Where the landlord's interest in a residential complex or a rental unit is acquired by a person on a mortgage sale, a tax sale or a foreclosure under The Real Property Act, unless the person otherwise agrees,
(a) each subsisting life lease is terminated; and
(b) the person is not bound by an obligation to repay all or part of an entrance fee paid under a life lease.
Right to continue in occupancy
Each tenant whose life lease is terminated under clause (2)(a) has a right
(a) to remain in occupancy of his or her rental unit at least until the end of the month in which the life lease is terminated; and
(b) at the end of that month, to continue in occupancy of his or her rental unit under a deemed tenancy agreement for successive rental payment periods, as described in section 23 of The Residential Tenancies Act, subject to a rent increase that complies with the applicable provisions of Part 9 of that Act.
RESERVE FUNDS, INSURANCE AND ANNUAL REPORTING
RESERVE FUNDS
Reserve fund for non-profit landlord
A non-profit 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.
In addition to being used for the purposes set out in subsection (1), funds set aside under that subsection may be used
(a) to cover any unforeseen cost of the residential complex or shortfall in the revenue of the complex; or
(b) as required by an order made under section 140.1 (application for rent review) of The Residential Tenancies Act.
INSURANCE
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.
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.
ANNUAL REPORTING
The landlord of a residential complex shall call a meeting of the tenants not later than 16 months after the occupancy date of the complex and thereafter not later than six months after the end of each fiscal year of the landlord, or within such further time as the director under The Residential Tenancies Act allows,
(a) to present the financial statements referred to in subsection (3); and
(b) to hear any representations by tenants respecting
(i) the financial statements referred to in subsection (3),
(ii) the audited financial statements, if any, provided under section 18.2, or
(iii) the operation of the complex.
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.
The landlord shall include in or with the notice given under subsection (2) the following information, set out in accordance with the regulations:
(a) if the landlord has established a refund fund under subsection 19(2), or any other fund for the purpose of refunding entrance fees, a statement setting out in respect of that fund,
(i) the amounts contributed to, and the amounts paid out of, the fund during the preceding fiscal year, showing separately the amounts paid out to tenants and the amounts paid out to the landlord,
(ii) the balance in the fund at the end of that year, and
(iii) the amounts, if any, owing to former tenants of the residential complex;
(b) if the landlord is a non-profit landlord, a statement from the landlord setting out, in respect of any reserve fund maintained by it,
(i) the amounts contributed to, and the amounts paid out of, the reserve fund during the preceding fiscal year,
(ii) the balance in the reserve fund at the end of that year, and
(iii) an estimate of the amounts to be contributed to, and the amounts to be paid out of, the reserve fund during the current fiscal year;
(c) if the rents charged by the landlord under the life leases are, for any tenant, a share of the costs of the residential complex as specified in the lease, including a contribution to any reserve fund or refund fund, for that tenant,
(i) a statement of the revenues and expenditures of the residential complex for the preceding fiscal year, and
(ii) a detailed budget for the current fiscal year;
(d) any additional prescribed information.
Statement by trustee or landlord
The statement referred to in clause (3)(a) shall be made by a trustee appointed under subsection 19(2) or, if no such trustee has been appointed, by the landlord.
Owner representative to attend meeting
At least
(a) one director of the board of the owner of a residential complex that is owned by a corporation; or
(b) one authorized representative of owners holding a majority interest in a residential complex that is not owned by a corporation;
shall attend the annual meeting and report to the board or to the owners on any concerns or issues raised by tenants.
TENANT REPRESENTATION AT BOARD MEETINGS
Tenant representation at board meetings
The tenants of a non-profit landlord may select one or two tenants, or a greater number if provided for in their life leases or the landlord's by-laws, and alternates, to represent them at meetings of the landlord's board of directors.
The landlord shall give each tenant representative selected under subsection (1)
(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.
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, but this section does not give a tenant representative the right to vote.
A landlord may restrict the rights of a tenant representative under subsection (3) to matters that do not involve personal information pertaining to individual tenants or to personnel of the landlord.
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. But this personal information may be provided to a tenant representative if the person the information is about consents.
A tenant representative may give other tenants access to the minutes.
AUDITED FINANCIAL STATEMENTS
Meaning of "majority of tenants"
For the purposes of this section, "majority of tenants" means a majority of the tenants in occupied rental units in a residential complex. In calculating the majority,
(a) multiple tenants of one rental unit count as one tenant; and
(b) a tenant who has given or has been given notice of termination of the tenancy is not counted.
If a non-profit 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) subject to subsection (4), continue to obtain audited financial statements for each succeeding fiscal year.
Tenant entitled to a copy of audited statements
If a non-profit landlord has obtained audited financial statements for the residential complex for the preceding fiscal year, whether obtained under subsection (2) or otherwise, the landlord shall provide a copy of the statements to a tenant on request.
A request to obtain audited financial statements under subsection (2) may be withdrawn by a written notice given to the landlord that is signed by a majority of tenants.
Personal information in financial statements
For the purposes of subsection (3), the landlord must take reasonable steps to avoid disclosing personal information pertaining to personnel of the landlord.
TRUSTEES AND REFUNDABLE ENTRANCE FEES
APPOINTMENT AND QUALIFICATIONS OF TRUSTEES
Appointment of trustee re entrance fees
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
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.
A trustee in respect of a residential complex shall be
(a) a body corporate, incorporated under the laws of Canada or a province of Canada and authorized under The Corporations Act to carry on the business of a trust corporation or an extra-provincial trust corporation, that meets any prescribed requirements; or
(b) a person who meets prescribed requirements and qualifications for trustees under this Act.
The landlord or any tenant for whose benefit funds are administered by a trustee may apply to the Court of Queen's Bench for an order that the trustee be replaced on the ground that the trustee does not meet the requirements or the qualifications under subsection (1), and the court may make an order on any terms it thinks appropriate.
Where a trustee ceases to be a trustee in respect of a residential complex and had, immediately before ceasing to be a trustee, any continuing or outstanding obligations to the landlord or the tenants of the complex, the landlord shall immediately appoint another trustee in its place to fulfil those obligations unless the court has done so under subsection (2).
Application of The Trustee Act
Any matter arising in relation to a trust or a trustee under this Act that is provided for in The Trustee Act and is not specifically provided for in this Act or The Residential Tenancies Act, shall be determined under The Trustee Act.
INITIAL TENANTS' ENTRANCE FEES
Meaning of "unleased rental unit"
For the purposes of clause (4)(b), "unleased rental unit" means a rental unit that, before the first amount is paid out under this section, is not leased to a bona fide initial tenant whose lease has not been and can no longer be cancelled under section 10.
Upon the expiry of the period for cancellation under subsection 10(2), the landlord shall pay the full entrance fee of each initial tenant, together with any interest earned on it, to the trustee appointed under subsection 19(1), unless the landlord has refunded it to the tenant.
Trustee to hold entrance fees and pre-lease payments
Any pre-lease payments paid under clause 8(4)(b) to a trustee appointed under subsection 19(1) and all entrance fees received by that trustee, other than those entrance fees that are required by this Act or an order under section 154 of The Residential Tenancies Act 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 requirements of clauses (4)(a) and (b).
A trustee appointed under subsection 19(1) shall not pay to or for the benefit of the landlord any amount held by the trustee under subsection (3) until the landlord has provided to the trustee
(a) all evidence required by the regulations respecting
(i) the landlord's legal interest in the lands on which the residential complex is or is to be located,
(ii) the projected costs of the development of the complex,
(iii) the availability of funds to complete the development,
(iv) registration of any mortgage required by a lender to finance development of the residential complex,
(v) contracts entered into for the development and security for the performance of those contracts,
(vi) the obtaining of any regulatory approvals required to carry out the development,
(vii) insurance coverage for the complex as required under section 17,
(viii) the certification of expenditures incurred or work completed in the development of the complex, and
(ix) any other prescribed matter; and
(b) an irrevocable letter of credit or equivalent security for an amount that is not less than the total of the first year's rent that would be payable for all unleased rental units, if they were leased under life leases in respect of which the minimum entrance fees required by the landlord had been paid.
Security reduced if rental unit leased
If, before the end of the first year after the occupancy date of a residential complex, a rental unit for which security has been provided under clause (4)(b) is leased to a bona fide initial tenant, the amount secured under clause (4)(b) may be reduced by the amount of the rent that would be payable under the lease, if the tenant had paid the minimum entrance fee required by the landlord, from the tenant's possession date to the end of that year.
Where a letter of credit or other security is provided under clause (4)(b) in respect of a residential complex, the funds obtained by the trustee under the letter of credit or on the realization of the other security shall be applied monthly to the operating costs of the complex during the first year after its occupancy date, to the extent of the difference between
(a) the total rent that would, if the rental units referred to in clause (4)(b) were rented under life leases in respect of which the minimum entrance fees required by the landlord had been paid, be payable for the month for those units; and
(b) the total rent that is payable for the month by tenants for those rental units.
Except as otherwise provided by the regulations, funds paid to or for the benefit of the landlord of a residential complex by the trustee appointed under subsection 19(1) shall be used for one or more of the following purposes:
(a) to pay for development of the complex;
(b) to pay for tenants' extras;
(c) to refund all or any part of one or more entrance fees paid in respect of the complex;
(d) to fund the landlord's contribution to a refund fund in respect of the complex;
(e) to satisfy an order made under section 154 of The Residential Tenancies Act in respect of an entrance fee;
(f) to reimburse the landlord for amounts paid by the landlord for any of the foregoing purposes;
and any balance not required for these purposes shall be used only for the purposes of the complex.
REFUNDABLE ENTRANCE FEES AND THE REFUND FUND
At least 95% of each entrance fee payable in respect of a residential complex, other than the portion of the entrance fee payable in respect of a tenant's extras, shall be refundable if
(a) the landlord is not a non-profit landlord; or
(b) the term of the lease is for the tenant's life.
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 to the refund fund an amount not less than the minimum amount stipulated in the landlord's disclosure to the tenants under subclause 6(4)(b)(i).
In this section, a tenant's "priority date" means
(a) in the case of a cancellation of the tenant's lease under section 13, the effective date of the cancellation; and
(b) in any other case, the later of
(i) the day on which the tenancy under the lease is terminated, and
(ii) the last day of the third month after the month in which notice of the termination was given by the landlord or the tenant.
Effective date of cancellation
For the purpose of clause (1)(a), where the cancellations of two or more life leases are effective within the same calendar month, the cancellations are deemed to be effective on the last day of the month.
A tenant whose entitlement to a refund of all or part of his or her entrance fee has not been paid in full,
(a) in the case of a cancellation of the tenant's lease under section 13, within 60 days after the effective date of the cancellation; and
(b) in any other case, by the tenant's priority date, or any earlier date provided for in the lease;
is entitled to be paid, out of the funds available in the refund fund, the balance owing by the landlord to the tenant.
No deduction for damage or arrears
A landlord shall not deduct any amount from a tenant's entitlement to a refund of an entrance fee for
(a) damage to the rental unit or residential complex;
(b) rent arrears; or
(c) other compensation that the landlord claims from the tenant;
except an amount to satisfy a final decision or order for compensation made in the landlord's favour by the director under The Residential Tenancies Act.
If the amount available in the refund fund is less than the total amount payable under this section and section 13 in respect of two or more leases, the trustee shall pay the available funds to the tenants in the order in which their priority dates occurred and, if the available funds are less than the amounts owing to two or more tenants having the same priority date, the available funds shall be paid to them pro rata in proportion to the amounts payable to them.
If the balance in the refund fund of a non-profit landlord exceeds the total of
(a) the minimum amount stipulated in the landlord's disclosure to the tenants under subclause 6(4)(b)(i); and
(b) the amounts refundable to tenants whose leases have been cancelled or terminated or who have given notices of termination;
the landlord may withdraw the excess from the refund fund and use the proceeds for the purposes of the residential complex or for any other purpose permitted by the regulations.
If any entrance fee paid in respect of a residential complex is refundable, the landlord shall not use an entrance fee received after the occupancy date of the residential complex for any purpose other than to refund an entrance fee unless, immediately after it is used, the balance in the refund fund equals or exceeds the total referred to in section 25.
Meaning of "fully funded" refund fund
For the purposes of this section, a refund fund in respect of a residential complex is fully funded when, after the occupancy date of the complex, the amount in the fund is equal to or greater than
(a) the total amount payable to the former tenants of the complex whose entrance fees have not been refunded; and
(b) the total amount that would be payable to the current tenants of the complex from the refund fund if all the life leases were terminated.
If the landlord of a residential complex is not a non-profit landlord, when the refund fund is fully funded,
(a) each of the current tenants of the complex has the right to a refund of the refundable portion of his or her entrance fee; and
(b) the landlord shall notify each tenant of his or her right under clause (a).
If the landlord of a residential complex is not a non-profit landlord, after the refund fund is fully funded,
(a) the trustee's reasonable fees for the administration of the fund shall be charged to and paid out of the income and, if necessary, the capital of the fund; and
(b) any remaining income of the fund shall be earned by the trustee for the benefit of, and shall be paid at least annually to, the current tenants of the complex who have not requested or obtained a refund of the refundable portion of their entrance fees.
Payment of excess to certain landlords prohibited
The trustee in respect of a residential complex shall not pay any part of the refund fund to or for the benefit of a landlord that is not a non-profit landlord.
MORTGAGE SECURITY
If all or a portion of an entrance fee in respect of a residential complex is refundable, the trustee appointed under subsection 19(1) shall not advance or permit to be advanced, to or for the benefit of the landlord, any portion of the entrance fee except, subject to subsection (3), funds for the purchase of the land on which the residential complex is to be located, unless the landlord certifies that
(a) a mortgage that meets the requirements of subsection (2), and any additional requirements set out in the life lease, has been duly registered in the appropriate land titles office against the landlord's interest in the lands that include the complex; and
(b) the security provided by the mortgage will, in respect of the funds advanced, not rank inferior to any registered instrument or encumbrance other than
(i) a mortgage under which funds are advanced to finance the development of the complex,
(ii) one or more instruments referred to in section 141 of The Real Property Act, and
(iii) other registered instruments that are not materially adverse to the security provided by the mortgage or that are required by a government authority to permit the development of the complex.
A mortgage under clause (1)(a) shall be in registrable form and shall satisfy the following requirements, and may contain additional terms and conditions not inconsistent with the following:
(a) the trustee appointed under subsection 19(2) shall be named as the mortgagee;
(b) the mortgage
(i) shall secure at least the total of the refundable portions of all the entrance fees that have been paid and not previously refunded or are payable to the landlord or trustee, and
(ii) shall be repayable on demand by the trustee;
(c) if a life lease in respect of the residential complex so requires, the mortgage shall include an obligation of the landlord to pay interest on the amount demanded under the mortgage from the date of demand until the date of payment, and shall secure the payment of that interest; and
(d) the mortgage shall include all applicable prescribed terms and conditions.
The trustee may, before the mortgage under clause (1)(a) is registered, release funds to the landlord for the purchase of the land on which the residential complex is to be located only if the landlord provides a written undertaking
(a) to ensure that the funds are sent to the vendor of the land under one or more trust conditions stipulating that the landlord will receive title to the land subject only to agreed-upon encumbrances; and
(b) to register the transfer of the land under The Real Property Act in series with the mortgage referred to in clause (1)(a).
No landlord of a residential complex shall receive or permit a trustee to receive an entrance fee if it would result in the total of the refundable portions of all entrance fees paid in respect of the complex and not previously refunded exceeding the security provided by a mortgage (referred to as the "previous mortgage") that satisfies the requirements of section 28, unless the excess is secured by
(a) an amendment to the previous mortgage; or
(b) another similar mortgage that upon registration ranks equally with or next in priority to the previous mortgage, subject only to intervening registered instruments or encumbrances that are not materially adverse to the security provided by the mortgage.
When all entrance fees secured by a mortgage have been refunded, the trustee appointed under subsection 19(2) shall discharge the mortgage.
DEFAULT
If at the end of two years after the termination of a life lease, or any shorter period set out in the lease, not all of the refundable portion of a former tenant's entrance fee has been refunded, the trustee appointed under subsection 19(2) shall, upon the request of the former tenant, demand payment by the landlord of the unpaid balance within 30 days after the date of demand.
Mandatory foreclosure proceedings
Subject to subsections (3) and (4), if the landlord of a residential complex fails to comply with a demand made under subsection (1), the trustee shall commence mortgage sale and foreclosure proceedings under The Real Property Act and shall take all reasonable steps to advance those proceedings expeditiously.
If every former tenant of a residential complex who has a right to ask the trustee to take action under subsection (1) has given written notice to the trustee after the termination of his or her lease, waiving, or consenting to an extension of the time for, the payment of the balance of the entrance fee owing to him or her, the trustee shall accordingly refrain from taking, or delay the taking of, any action under subsection (2).
Before commencing mortgage sale and foreclosure proceedings, the trustee shall
(a) call a meeting of the tenants whose life leases have not been terminated to consider an application under clause (b); and
(b) if authorized by a majority of the votes cast at the meeting referred to in clause (a), with each life lease carrying an entitlement to one vote, apply to the Court of Queen's Bench for an extension of time for the landlord to comply with the demand before commencing mortgage sale and foreclosure proceedings.
After a mortgage sale or foreclosure or a tax sale of a residential complex, unless the new landlord agrees to be bound by the obligations of the former landlord respecting the entrance fees, the trustee shall distribute the balance of the refund fund, if any, then held by it in respect of the complex pro rata to the persons who were the tenants of the complex at the time of the sale or foreclosure in proportion to their entrance fees.
For the purpose of subsection 136(3) of The Real Property Act, the tenants of a residential complex at the time of a mortgage sale of the complex shall be paid, out of any surplus otherwise payable under that subsection to the landlord and in proportion to their entrance fees, the entrance fees paid under their life leases prior to any payment to the landlord.
GENERAL PROVISIONS
Non-profit landlord limited to one residential complex
No non-profit landlord of a residential complex shall after the coming into force of this Act become, otherwise than under clause (b) of the definition "landlord" in subsection 1(1), a landlord of another residential complex.
Exception for property managers
Nothing in subsection (1) prevents a non-profit corporation from acting as the property manager for more than one residential complex.
No person to whom a certificate of title has been issued under The Condominium Act for a rental unit that is the subject of a life lease shall sell the rental unit to a person other than the tenant, unless the tenant has been given an option, exercisable at any time before the unit is offered for sale to a person other than the tenant, but not less than 30 days after the date of receipt of the option, to purchase the rental unit at a price not exceeding the price at which the unit will be offered for sale and on terms that are not less favourable.
Notice of life lease filed against the land
If a rental unit in a residential complex is subject to this Act, the landlord shall, within 60 days after the occupancy date of the complex, file a notice in the prescribed form
(a) against the title to the land on which the residential complex is located, if the land is subject to The Real Property Act; or
(b) against the abstract records for the land on which the residential complex is located, if the land is subject to The Registry Act.
Failure to file a notice as required by subsection (1) does not affect the rights and obligations of any person under any other provision of this Act.
A landlord shall deposit or invest pre-lease payments, entrance fees and all amounts contributed to a reserve fund under subsection 16(1) in accordance with the regulations.
A trustee shall deposit or invest all amounts received by it under this Act in accordance with the regulations.
Payment of shortfall as a rent increase
Despite sections 118 and 119 of The Residential Tenancies Act, if
(a) a life lease provides for the tenant's rent to be the tenant's share of budgeted operating costs and contributions to reserve funds and to any refund fund;
(b) the actual operating costs and contributions exceeded revenue for the previous fiscal year; and
(c) the life lease requires the tenant to pay his or her share of the shortfall by one or more payments, whether or not such payments would constitute a second rent increase within a 12-month period;
a non-profit landlord may require the tenant to pay all or part of the tenant's share of the shortfall as a rent increase by a minimum of 12 equal monthly payments.
Landlord to give written notice
The landlord shall give the tenant at least three months' written notice of a rent increase resulting from a shortfall. Notice must be given in accordance with sections 25 and 27 of The Residential Tenancies Act.
Paying shortfall by a lump sum payment
Instead of paying a share of a shortfall in accordance with subsection (1),
(a) the tenant may pay his or her share of the shortfall by making one or more lump sum payments; and
(b) the landlord may receive the payment or payments at any time after the notice is given;
if the landlord and tenant agree and the tenant has received notice under subsection (2).
OFFENCES AND PENALTIES
Offence: false or misleading statement
A landlord, or a person who for consideration is engaged in the marketing or development of a residential complex, who 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;
is guilty of an offence.
Offence: contravention of Act or regulations
A person who contravenes any provision of this Act or the regulations is guilty of an offence.
Directors, officers and agents
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.
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.
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.;
and the court convicting the person may, in addition to any other penalty, order the person to pay compensation or restitution in respect of the offence.
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 director under The Residential Tenancies Act.
NOTICE AND MISCELLANEOUS
A notice or other document under this Act may be given to a person by
(a) handing it to the person, or
(i) if the person is a landlord or a trustee, handing it to an agent of that person, or
(ii) if the person is a tenant, handing it to an apparently adult person in the residence of the tenant; or
(b) sending it by prepaid, first class mail to the address where the person resides or carries on business.
Despite subsection (1), information that a landlord is required under subsection 6(2), clause 6(4)(b) or (c) or subsection 11(7) to give or disclose to a tenant shall be given by
(a) handing it to the tenant, an apparently adult person in the residence of the tenant or a person designated by the tenant to receive the information; or
(b) sending it to the tenant by prepaid registered mail to the address where the tenant resides.
Despite subsection (1), a notice of cancellation under subsection 10(2) or 12(1) shall be given to a landlord by a tenant before the end of the period for cancellation by
(a) handing it to the landlord or an agent of the landlord and, if the notice is under subsection 12(1), to the assignor or an agent of the assignor;
(b) delivering it to the address stipulated for this purpose by the landlord and, where applicable, by the assignor; or
(c) if authorized by the landlord or assignor, faxing it to the number provided to the tenant for this purpose by the landlord or assignor.
A notice or other document sent by mail
(a) under clause (1)(b) is deemed to be given on the fifth day after the date of mailing; and
(b) under clause (2)(b) is given on delivery;
unless the person to whom it is sent establishes that, acting in good faith, he or she did not receive the notice or other document, or did not receive it until a later date, because of absence, accident, illness or other cause beyond the person's control.
Director or commission may give directions
Despite the other provisions of this section, the director or the commission under The Residential Tenancies Act may direct a notice or document to be given in a manner that is not described in this section.
Although a notice or other document is not given in accordance with this section, it is sufficiently given if it actually came to the attention of the person to whom it was intended to be given within the time for giving it under this Act.
Substantial compliance with the requirements of this Act or the regulations respecting the content of forms, notices or documents is sufficient unless the director or the commission under The Residential Tenancies Act is of the opinion that it would result in unfairness to any person.
Certificate of director as proof
Section 186 (certificate of director) of The Residential Tenancies Act applies with necessary modifications to prosecutions and proceedings under this Act.
REGULATIONS
The Lieutenant Governor in Council may make regulations
(a) respecting the investments that a landlord or a trustee may make with funds received by a landlord or a trustee under or in respect of life leases and income earned on those funds;
(b) 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;
(c) respecting any other matter the Lieutenant Governor in Council considers necessary or advisable to carry out the intent and purposes of this Act.
The minister may make regulations
(a) prescribing requirements for the purpose of clause (b) of the definition "non-profit landlord" in subsection 1(1);
(b) prescribing information to be provided to prospective tenants or tenants for the purposes of subsection 6(2), clause 6(4)(b), subsection 11(7) and section 46, and the form and manner in which it is to be provided;
(c) prescribing the maximum amount of a pre-lease payment or the manner of determining the maximum amount for the purpose of subsection 6(3);
(d) for the purpose of subsection 9(2), respecting the use of entrance fees and any income or gains earned or realized from the investment of the entrance fees, including terms and conditions to be met by landlords or a class of landlords before using such funds;
(e) respecting the form and content of statements of cancellation rights referred to in subsection 10(1) and clause 11(7)(b), and the manner in which they are to be provided to tenants;
(f) respecting the insurance to be maintained by a landlord for the purpose of subsection 17(1);
(g) respecting information to be included in or with a notice under subsection 18(3);
(h) prescribing requirements and qualifications for trustees for the purpose of subsection 20(1);
(i) respecting requirements to be satisfied before a trustee releases funds to a landlord under clause 21(4)(a);
(j) respecting the purposes for which funds described in subsection 21(7) may be used;
(k) respecting the purposes for which excess funds withdrawn from the refund fund under section 25 may be used;
(l) prescribing terms and conditions to be included in a mortgage referred to in section 28;
(m) prescribing the notice referred to in section 36;
(n) defining any word or expression used in this Act but not specifically defined in this Act;
(o) respecting any matter required or authorized by this Act to be prescribed.
APPLICATION TO MATTERS ARISING BEFORE THE COMING INTO FORCE OF THIS ACT
Pre-lease payments made before coming into force
Subsections 6(1), (2) and (3) (pre-lease payments) and sections 7 (acknowledgement of receipt) and 8 (pre-lease payments) do not apply to pre-lease payments received before the coming into force of this Act.
Entrance fees paid before coming into force
Section 7 (acknowledgement of receipt) and subclause 6(4)(b)(ii) (disclosure) do not apply to entrance fees received before the coming into force of this Act.
Assignments made before coming into force
Subsection 11(7) does not apply to an assignment of a life lease to which the landlord has consented before the coming into force of this Act.
Life leases entered into before coming into force
Where before the coming into force of this Act a landlord has entered into a life lease in respect of a residential complex, the provisions or requirements set out in
(a) subsection 6(4) (entrance fees) other than subclause (b)(ii);
(b) section 8 (pre-lease payments);
(c) subsections 9(1) and (2) (entrance fees);
(d) clause 11(1)(b) (assignment);
(e) section 13 (failure to give possession);
(f) section 14 (notice of possession date); and
(g) Part 4 (Trustees and Refundable Entrance Fees), other than the following provisions:
(i) subsection 20(3) (replacement trustee), where applicable, and subsection 20(4) (application of The Trustee Act),
(i.1) subsection 24(3.1) (no deduction for damage or arrears),
(ii) where applicable, section 30 (mortgage discharged) with necessary modifications,
(iii) where applicable, subsection 31(3) (waiver or postponement) with necessary modifications and where applicable, subsection 31(4) (meeting of tenants),
(iv) section 32 (distribution of refund fund),
(v) section 33 (surplus on mortgage sale);
do not apply to the following:
(h) the residential complex or the landlord;
(i) any pre-lease payment or entrance fee paid in respect of the complex before or after the coming into force of this Act or the life lease under which it was paid or the tenant who paid it.
Entrance fee received after coming into force
Subject to section 47, a person who receives, after the coming into force of this Act, an entrance fee in respect of a residential complex to which subsection (1) applies shall hold the amount in trust for the benefit of the tenant until the period for cancellation under subsection 10(2) has expired.
Disclosure where entrance fee paid
Where before the coming into force of this Act a landlord
(a) has received an entrance fee from a tenant or consented to an assignment of a life lease; and
(b) has not disclosed to the tenant or the assignee substantially all of the information that it would, if the entrance fee were received or the assignment were made after the coming into force of this Act, be required by subsection 6(2), clause 6(4)(b) or clause 11(7)(a) to disclose to the tenant;
the landlord shall, within three months after this Act comes into force, disclose to any tenant under a life lease that is in effect as of the date of the disclosure, in accordance with the regulations, any information required by the regulations to be disclosed to the tenant in respect of his or her life lease or the residential complex.
Section 10 and subsection 45(2) do not apply to a life lease where the tenant has signed the lease or offer to lease before the coming into force of this Act.
Section 12 does not apply to an assignment of a life lease where the landlord has provided its consent to the assignment before the coming into force of this Act.
If the occupancy date of a residential complex is before the day this Act comes into force, section 18 (annual meeting) applies, with necessary modifications, to the landlord as if the occupancy date were the day this Act comes into force.
Notice of life lease filed against the land
If the occupancy date of a residential complex is before the coming into force of this Act, the landlord shall file the notice required by section 36 within 90 days after the coming into force of this Act.
A non-profit landlord of a residential complex the occupancy date of which was before the coming into force of this Act shall establish a reserve fund in accordance with section 16 (reserve funds) before the day notice is required to be given of the second annual meeting of tenants required by section 18 (annual meeting).
NOTE: These sections made up Part 7 of the original Act and contained consequential amendments to other Acts which are now included in those Acts.
C.C.S.M. REFERENCE AND COMING INTO FORCE
This Act may be cited as The Life Leases Act and referred to as chapter L130 of the Continuing Consolidation of the Statutes of Manitoba.
This Act comes into force on a day fixed by proclamation.
NOTE: S.M. 1998, c. 42 was proclaimed in force December 1, 1999.