Lifestyle Communities seeks to claw back $117m after exit fee ruling
ASX-listed Lifestyle Communities, which has over 25 retirement villages, is trying to claw back over $100m after a landmark ruling found they unlawfully charged residents “exit” fees.
ASX-listed retirement village giant Lifestyle Communities is trying to claw back over $100m that was previously written off after a tribunal ruling found they unlawfully charged residents “exit” fees.
The Victorian company is in the process of appealing the decision, and has announced it will offer existing homeowners the option to shift to a new fee model, which would restore value to its balance sheet if residents opt in.
By switching homeowners to the revised model, Lifestyle could recover up to $117m that was previously written down to zero in the most recent financial year.
But it is still lower than the $193m the business estimates they would get back if they kept the original contracts.
The company has over 25 retirement villages in Victoria – on the Bellarine Peninsula, the Mornington Peninsula, the Bass Coast, and in outer suburban Melbourne, Shepparton, Warragul and Yarrawonga.
Lifestyle said in a statement to the ASX this week that it will offer all existing homeowners the option to move to the new fees model once the Victorian Civil and Administrative Tribunal matter is finalised, regardless of the outcome of the appeal.
“Lifestyle Communities anticipates this offer will generate substantial goodwill and sentiment amongst its homeowner community,” the Board said.
“(The company) could benefit from any goodwill which could contribute to homeowner satisfaction and both protect and strengthen a strong sales referral rate which has historically contributed up to 50 per cent of sales.”
Lifestyle updated its “deferred management fees” model to align with the findings of the landmark VCAT ruling issued in July this year.
Tribunal president Justice Ted Woodward sided with the group of battler residents who launched legal action, finding the exit fees were illegal because they were based on figures which were unknown when retirees signed up to live at the company’s villages.
Homeowners in the company’s villages were typically slugged more than $60,000 in fees when they moved out or died.
Justice Woodward said at the time the company’s practice of charging dead people fees was “at least harsh, if not unconscionable”.
For new homeowners, fees are calculated on the home’s original purchase price and pro-rated over five years, capped at 20 per cent.
It comes after Lifestyle was forced to offload land and delay upgrades to help cover a $77m bill for illegal exit fees, revealed in its most recent annual results, which triggered a $54m after-tax writedown.
The company’s operating profit in 2024-25 was $45.2m, down from $52.9m the year before.
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Originally published as Lifestyle Communities seeks to claw back $117m after exit fee ruling
