In an update to the ASX, the business with a $2.11 billion market capitlisation, said it has "limited exposure" to contracts which include a Deferred Management Fee (DMF).
Last week, VCAT President Justice Tim Woodward ruled the DMF contract issued to Lifestyle Communities was void because they were calculated in a way that benefitted the operator if home values increased but did not penalise it if values declined.
Ingenia said the value of DMFs across the Group’s portfolio at 30 June 2025 represented approximately $26 million (circa 1% of the Group’s investment property value).
"The average annual revenue from deferred management fees has been $3 million over the last three years. The Group does not sell any new homes with a DMF or exit fee, however has four communities in Victoria which were acquired with a legacy DMF in place. The Group will review the recent VCAT decision and consider any potential changes to the operation of the DMF within Ingenia’s business," the company said.
In July last year, ABC 7.30 featured Lifestyle Communities Wollert resident Geoffrey Gauci. The report stated a number of Lifestyle Communities residents were taking the operator to VCAT on the DMF (Exit Fees) contracts and the continuation of paying rent after their loved one had died.
Reporter Adele Ferguson told ABC 7.30 last Wednesday, "Anyone who actually sold their property and were charged a 20% Exit Fee going back years, they are now eligible to get back from the company as well as the ones living there now who are about to sell. It is on average about $88,000 but for some people it is $200,000, a huge amount of money."
As The Weekly SOURCE reported earlier last Wednesday, Lifestyle Communities told the ASX it wanted to appeal and asked to stay Judge Woodward's decisions. Lifestyle Communities' share price has dropped significantly and sales have dropped alarmingly since the ABC's allegations were aired. At 4pm yesterday, Lifestyle Communities was trading at $4.36, a fall of 57.67% in the past 12 months. Lifestyle Communities' market capitalisation has dropped from $1.53 billion to $532 million - it has lost $325 million in value since Justice Woodward's preliminary ruling.
It's said in every cloud there is a silver lining. On 10 June, Citigroup Global Markets purchased more than 7 million stocks of Lifestyle Communities. It now has 5.8664% of voting rights, making it the fifth largest stake in the company. AustralianSuper is the major shareholder.
