ASX-listed housing provider Lifestyle Communities has been directed to scrap certain exit fees following a ruling by the Victorian Civil and Administrative Tribunal (VCAT). The tribunal found that the company had been charging some residents significant exit fees, known as deferred management fees, without adequate disclosure. Lifestyle Communities develops and manages land lease communities, providing affordable housing solutions for downsizers. It aims to deliver vibrant communities with resort-style facilities.
President of VCAT, Justice Edward Woodward, stated that these controversial exit fees were deemed “void” and that Lifestyle Communities must not demand their payment. The tribunal’s decision follows a review of the company’s fee structures and disclosure practices. The case highlighted concerns about transparency and fairness in the application of deferred management fees within the residential communities sector.
While the VCAT is yet to issue formal orders, the ruling signifies a substantial blow to Lifestyle Communities’ revenue model. The impact on the company’s financial performance will likely be closely monitored by investors and industry stakeholders. This decision could set a precedent for similar cases involving retirement and lifestyle communities across Australia.
The full implications of the ruling are still unfolding, but it underscores the importance of clear and transparent fee structures within the housing sector. Further details regarding the specific orders and their implementation are expected to be released by VCAT in due course. The decision will likely prompt a review of disclosure practices within similar communities.
