Can retiring parents keep a life lease on the farmhouse after transferring the farm to a child in Ontario?

Yes — retiring parents can keep the right to live in the farmhouse for life even after transferring ownership of the farm to a child, through an arrangement commonly called a life lease or a reserved life interest. Instead of moving out the day the farm changes hands, the parents keep a documented right to occupy the house, and sometimes a portion of the surrounding land, for as long as they live, while the child takes over ownership and operation of the rest of the farm.

The key is putting this arrangement in writing and being specific: who pays for utilities, taxes, insurance, and upkeep on the house; what happens if a parent needs long-term care and can no longer live there; and how the arrangement interacts with the child's ability to mortgage or sell the property later. A poorly documented verbal understanding is a common source of real friction, especially if the child's circumstances change through a marriage breakdown, financial pressure, or a disagreement with the parents. Because this affects both the transfer structure and the child's ownership rights, it's worth having a lawyer draft the life lease alongside the farm transfer documents, not as an informal side arrangement.