Victorian land lease community operator Lifestyle Communities, which is appealing a tribunal ruling that struck out its Deferred Management Fee (DMF) clause, has pushed back the release of its FY25 financial results.
Lifestyle Communities said the delay is to allow time to reassess the carrying value of its investment properties in light of the recent VCAT decision.
The results, originally due on Thursday, 21 August, will now be released a week later.
Lifestyle Communities' stock last traded at $4.90. Its shares were sitting at $12.57 in July 2024 when an ABC 7.30 report raised concerns over its operations. Lifestyle Communities' market cap has since dropped from $1.53 billion to $597.74 million – wiping almost $1 billion off its value.
The land lease community operator recently changed its Deferred Management Fee (DMF) contracts after Justice Ted Woodward, President of the Victorian Civil and Administrative Tribunal ruled while the state's Residential Tenancies Act 1997 does not prohibit the DMF (Exit fees), the DMF clause in Lifestyle Communities' contracts was void due to the lack of disclosure around the precise amount on leaving the community.
The ASX-listed operator updated its contracts for new homeowners from 7 July in line with the ruling until the appeal is resolved.
- For deposit holders and future homeowners: Lifestyle Communities will now calculate the DMF based on the purchase price of the home, pro-rated over a five-year period to a maximum of 20%.
- For existing homeowners leaving a community: the operator will continue to operate under the existing contract arrangements, unless VCAT issues final orders directing otherwise.
- For deceased estates, Lifestyle Communities will no longer charge rent. Justice Woodward found that while charging rent post-death is permissible, the estate should be allowed to have someone live in the home in the intervening period, with Lifestyle Communities’ written consent – which should not be unreasonably withheld.
