Lifestyle Communities to offer upfront contracts with no Exit Fee

Lifestyle Communities is preparing to give incoming residents more choice over how and when they pay village fees, as it reshapes its contract model following a bruising year of legal and media scrutiny.

Chief Executive Henry Ruiz told shareholders at the ASX-listed operator’s annual general meeting that from Q3 FY26, residents will be able to choose between two contract options, including a new No Exit Fee model.

“LIC expects to introduce a new model that will provide choice to customers to either free up cash now (pay later), or buy with no exit fee (pay upfront),” he said.

Under the proposal, buyers will be able to decide when they pay their management fee – either 10% upfront, or up to 20% when they sell.

The overhaul follows a July decision by the Victorian Civil and Administrative Tribunal (VCAT), which found that Lifestyle Communities’ long-standing contract – used for 22 years – was illegal because the Deferred Management Fee (DMF) was calculated on the exit value of the home. At the time the contract was entered into, that exit value was unknown and therefore void.

Lifestyle Communities, which is appealing the ruling, has since changed its DMF so it is calculated on the purchase price instead of the sale price, allowing homeowners to retain 100% of any capital growth.

Claims made to VCAT – first aired in an ABC 7.30 investigation and disputed by Lifestyle Communities – have significantly dented investor confidence. Before the ABC report, the operator’s market capitalisation was $1.53 billion. By last Friday, it had fallen to $640 million.

The company also used the AGM to update shareholders on FY26 trading:

• As at 31 October 2025, Lifestyle Communities had 202 unsold completed homes, down from 257 at 30 June 2025 – a 21% reduction. There are 10 unsold homes under construction, compared with 12 at 30 June 2025.
• Net debt as at 31 October 2025 was $338.3 million, down from $460.5 million at 30 June 2025, driven largely by the receipt of $100 million in land sale proceeds.
• As of 19 November 2025, Lifestyle Communities had made 93 new net sales.

“We have 240 contracts on hand. Of the 240 contracts on hand, 150 relate to homes that are expected to be available for settlement in FY26,” the company said.