Lifestyle Communities’ announcement on DMF changes for existing homeowners
The group told the ASX it has been weighing up offering existing homeowners the option to shift to its new DMF model and wants them to be able to make that choice with full information once the appeal is resolved.
The Victorian land lease community operator will offer all existing homeowners the option to move to a New DMF Model once an appeal to VCAT is determined, regardless of the outcome of the appeal.
Lifestyle Communities, which has seen its market capitalisation drop from $1.53 billion in July 2024 to $659.83 million today (9 December), faces a potential $117 million loss if all homeowners move to the New DMF Model.
In July 2025, Lifestyle Communities updated its Deferred Management Fee (DMF) to align with the findings of the Victorian Civil and Administrative Tribunal (VCAT) ruling issued on 7 July 2025.
For new homeowners entering into a Residential Site Agreement (RSA) with Lifestyle Communities, the DMF is now calculated on the homeowner’s purchase price and pro-rated over a five-year period to a maximum of 20% of the purchase price (New DMF Model).
VCAT found that in certain Lifestyle Communities RSAs signed before the ruling, the DMF clause was invalid because it could not be calculated precisely at the time the RSA was entered into. Since the fee was expressed as a percentage of the eventual “sale price”, the Tribunal deemed the DMF clause void.
Lifestyle Communities has written the carrying value of its DMF entitlements for existing homeowners down to zero as at 30 June 2025, following the VCAT decision it is currently appealing.
The group told the ASX it has been weighing up offering existing homeowners the option to shift to its new DMF model and wants them to be able to make that choice with full information once the appeal is resolved.
“Following positive engagement with many existing homeowners on the new DMF model, Lifestyle Communities will offer all existing homeowners the choice to move to the new DMF model once the appeal of the VCAT decision has been determined, irrespective of the outcome,” the Board said.
Rationale and benefits
Lifestyle Communities states that offering the New DMF Model to all existing homeowners after the VCAT appeal is determined could:
• generate substantial goodwill and sentiment amongst its homeowner community.
• contribute to homeowner satisfaction and both protect and strengthen a strong sales referral rate which has historically contributed up to 50% of sales.
• reduce potential litigation and regulatory risk that may be associated with offering the New DMF Model prior to the outcome of the appeal.
Lifestyle Communities says it will adjust the carrying value of the DMF component of its investment properties as existing homeowners choose to transition to the New DMF Model.
In its FY25 results, the company noted that if all homeowners as at 30 June 2025 opted into the new model, the total recalculation of the DMF asset could be as much as $117 million.
