Well this post has two issues to it
assuming we are talking about site creation not hosting

1) is this common practice.. ??
while not common it is the legal default as I understand it (unless it has changed recently) is that the person who creates the design or code owns it and you are paying for their service.. IE unless you have it in the contract that you own it technically the company who created it does.. this means if you walk they can keep your site..

NOW this brings me to q2
2) what does this mean ?
well it could mean one of two things and only you know these people so for you to judge .. they could be badly wording that you do have the right to your code - OR - and because they want you to host on their servers .. this seems more likely.. that they have some small line item that allows for them to cancel that lifetime license.. or allows them to charge you for it or.. or .. or .. most likely there is a caveat -

when I do design I sign it over the customer in the contract.. as an act of good faith.. if they won't do that then I would probably decline using them...

just my 2 cents ;)