Residents of over-50s estates win case against exit fees | 7.30

Key Concepts:

• Exit fees in over 50s estates
• Unconscionable conduct
• Residential Tenancies Act
• Retrospective claims
• David and Goliath struggle

Legal Victory Against Lifestyle Communities:

• 83 residents of over 50s estates in Melbourne won a case against ASX-listed Lifestyle Communities.
• The residents accused the company of charging exorbitant exit fees when they move out.
• The Victorian tribunal ordered the company to stop this practice, impacting thousands.
• Justice Ted Woodward also heard that some families had been forced to continue paying rent for their relatives after they had died.

Impact on Residents and Families:

• Anyone who sold their property and was charged a 20% exit fee going back years is now eligible to get that money back from the company.
• The average exit fee was $88,000, but for some, it was as high as $200,000.
• The decision is retrospective, meaning families of deceased residents who paid the exit fee can also claim the money back from the company's estate.

Company Response and Potential Appeal:

• Lifestyle Communities' share price fell 37% after the decision was announced.
• The company has stated its intention to appeal the decision and is seeking a stay on the order until after the appeal.

Unconscionable Conduct Details:

• The judge stated 18 times that the conduct was unconscionable.
• The company was charging rent to the families of deceased residents until the property was sold, even though the families couldn't live there.
• Exit fees were up to 20% of the property's sale price.
• A retired detective discovered that the exit fees didn't comply with the Residential Tenancies Act.

Contract Complexity and Intention:

• The contracts were very confusing, especially the section on exit fees.
• The contracts are believed to intentionally bamboozle residents, and even lawyers find them difficult to understand.

Notable Quotes:

• Adele Ferguson: "Anyone who actually sold their property and were charged a 20% exit fee going back years, they're now eligible to get that back from the company."
• Adele Ferguson: "It was very clear the judge said 18 times it was unconscionable what was done and it was in the residential tenency act they hadn't done the right thing so it was void."

Synthesis/Conclusion:

The Victorian tribunal's decision represents a significant victory for residents of Lifestyle Communities' over 50s estates who were subjected to exorbitant and unconscionable exit fees and rental charges after a resident's death. The retrospective nature of the ruling allows past residents and families of deceased residents to reclaim these fees. Despite Lifestyle Communities' intention to appeal, the judge's strong condemnation of the company's practices and the clarity of the violation of the Residential Tenancies Act suggest a difficult road ahead for the company. The case highlights the potential for exploitation in complex contracts and the importance of clear and fair practices in the retirement living sector.