For almost a decade, pensioners Trish Reece and her husband Wayne have been living in a gated village in Shepparton in regional Victoria, run by the controversial land lease operator Lifestyle Communities.

Now they want to get out.

“We don’t want to live here anymore,” she says.

But she says they are stuck, financially, due to the so-called exit fees charged by the company when a resident sells their home.

Lifestyle Communities exit fees start at 4 per cent of the selling price and scale up to a cap of 20 per cent from the fifth year of ownership.

For a house that sells for $500,000, Lifestyle can take up to $100,000 in exit fees after five years.

Lifestyle specialises in land lease communities in Victoria, where residents buy the home, usually a manufactured or moveable dwelling, and rent the land, paying site rental fees of up to $250 a week for a couple.

It is part of a booming $12 billion land lease industry that houses more than 130,000 Australians, fuelled by a housing affordability crisis and an ageing population.

A significant number of residents are on a pension and given they own the home and rent the land, most are eligible to claim Commonwealth government rent assistance to help offset site rental fees.

ABC Investigations and 7.30 recently uncovered growing discontent among some Lifestyle residents, including 80 at its Wollert community on Melbourne’s northern fringe, who have lodged claims in the Victorian Civil and Administrative Tribunal (VCAT).

The investigation highlighted claims Lifestyle is gouging residents with unfair fees, which some of its competitors don’t charge, and charging dead people rent, a practice that is common across the industry.

The stories prompted the Victorian government to announce it would develop a series of reforms, including a standardised site agreement for land lease residents.

The company’s share price also took a flogging, falling 24 per cent as investors lost confidence after the company confirmed a significant downgrade of profit for 2024.

It pulled its forward outlook and estimates “due to the difficulty in quantifying the impact the uncertainty caused by recent media coverage might have on future sales and settlements”.

It told investors it had written to VCAT to ask for an urgent hearing.

The stories generated a flood of messages to the ABC from residents not just in Lifestyle villages but other land lease communities across Australia.

Trish Reece is one of them.

Her relationship with the company turned sour in 2021 when her mother-in-law Gwenda, who was living in the same Lifestyle community, had to move into aged care and gifted her home to Trish and Wayne, knowing they preferred her home and would move in.

Under Lifestyle’s contracts, the family faced the prospect of having to pay two exit fees: one for selling the home Trish and Wayne had been living in, and another for the couple to take ownership of Gwenda’s home.

Trish says they were told verbally by a manager at Lifestyle, who has since left, that the company would help them out and waive one exit fee if they decided to shift into Gwenda’s home if her circumstances changed.

Her husband Wayne was also at this meeting and recalls the offer being made.

When they eventually sold their home in the community and moved into Gwenda’s, the company made it clear they would have to pay two exit fees, which disappointed them, but Trish says she was unwell at the time and didn’t fight it.

All up, Lifestyle deducted $104,831 in exit fees, rent and selling fees, leaving them with $180,168. When they sell the place they are currently in they will face a third exit fee.

“We would have been better off financially if we stayed in the original home because we wouldn’t be up for three sets of exit fees,” she says.

“It’s so much of a chunk of our retirement savings gone … we’ll have to be carried out of here in a box. We can’t leave.”

In a statement, Lifestyle said it had spoken to its team and they “categorically deny a waiver was ever offered”.

It said the exit fees were applied in accordance with contracts signed by the home owners and that the family made a profit on both transactions after paying the exit fees.

Moving homes within Lifestyle is an issue of concern for a number of people.

One resident of a Lifestyle Community who wrote to the ABC said: “I’m not sure if you are aware that if you decide to sell your house in a Lifestyle Community and purchase another in the same village, Lifestyle also charge the same exit fees to both yourself as the vendor and also the vendor of the house you are purchasing, thereby doubling their profit. 

“I feel this is a very unscrupulous practice by Lifestyle.”

Some others have also expressed concern about exit fees. 

For five years, Deborah Jones has been fighting for her mother, who lives in a Lifestyle community.

Deborah is taking Lifestyle to VCAT over exit fees and is calling on the government to step in and regulate the industry.

“Enabling the [exit fee] is discriminating against Victorians, and the legislation needs to be brought into line with other states,” Deborah says in her VCAT claim, lodged in 2023.

Another person told the ABC that Lifestyle had charged a relative a 0.5 per cent handling fee and 2.5 per cent selling agent commission totalling $18,000 despite the relative finding the buyer and introducing the buyer to the Lifestyle agent.

“It was a friend of a friend who wanted to get into that particular site,” he said.

He said the exit fee cost tens of thousands of dollars to “get out of their clutches”.

“She has the psychological scar of feeling like a complete idiot for ever going there in the first place,” he said.

Lifestyle said in a statement the home owner chose to appoint Lifestyle Communities and signed its selling agreement, which sets out the terms of the engagement, including the fees charged.

“It is also important to note that Lifestyle does not make a profit on agent commissions,” the company said.

‘Do your homework’

Lifestyle, which declined to give an on-camera interview for the 7.30 investigation, wrote to all residents the day after the program aired, expressing it was “disappointed” with the coverage and that it was “distressed that this matter is playing out in the media and the impact this may have on the Lifestyle brand and potential value of your homes”.

It sparked debate among residents, some believing it was designed “to pit home owners against each other”.

Some contacted the ABC, defending the company and expressing anger that another side of their community had been ventilated.

At Shepparton, a meeting of residents gave support to Lifestyle.

At another village, a resident was concerned the stories could have a negative impact on the sale of properties “and the many advantages of these communities for most residents”.

Another said they looked at the paperwork before signing and were aware of what their family would incur.

Another said they were sorry there were some unhappy residents, “but do your homework before you sign on the dotted line”.

Lifestyle said the purpose of the letter to residents was to provide reassurance to concerned home owners regarding its model and the security of their homes.

“As a business for purpose, we have been hurt by recent allegations aired by the ABC,” it said in a statement, noting that it stood by its model.

It said it was easy to sell and move on from a Lifestyle community, adding the average profit per home owner was $86,000.

“Lifestyle stands behind the [exit fee] model and notes that most operators in Victoria have [an exit fee],” its statement said.

Discontent brewing in communities around the country

The issues raised by some of the residents at Lifestyle’s Wollert Community have put the national spotlight on a sector that until now has largely flown under the radar, despite its size and gaps in the state-based regulations.

Across the industry, stories of bullying, intimidation, fee gouging, excessive rent increases and misleading contracts abound.

In Queensland, Roger Marshall, the president of a volunteer group that advocates for land lease (also referred to as residential parks) residents, the Queensland Manufactured Home Owners Association (QMHOA), told the ABC the land lease sector has great potential as a retirement living option, but weak regulation had resulted in some questionable business practices being allowed to continue.

“It is the view of QMHOA that the factor which underpins all of the stories of dissatisfaction and concern from home owners about the way they are treated by park owners is a significant imbalance of power in the relationship between the two parties and the way in which park owners abuse their power advantage in pursuit of their own self-interest at the expense of their customers,” he said.

A survey across the Queensland land lease sector in 2022 found one of the biggest concerns was rent and housing affordability.

It found 60 per cent of respondents were not happy with how their last market review of site rent was conducted and 41 per cent indicated site rent increases had affected their ability to afford other essential items.

On the other side of the country, in Perth, Graeme Sinden helped organise a petition that was signed by more than 125 dissatisfied residents at the land lease community he lives in.

The petition, supplied to the ABC, says residents feel misled and that the facility has not met their expectations.

It also raises concerns about unfairness in the rental fee structure in the village, with some residents paying more than others due to an array of different agreements.

Another resident who signed the petition said the reason residents signed was that over the past three years potential residents were promised additional features and facilities by the marketing team, but these had not yet been delivered.

“This is still very much a work in progress and, in fact, has now been stalled and the area is fenced off. The proposed swimming pool appears from the picture on the website to be the size of a small paddling pool – hardly functional for a village of 397 residents (whose number increases each month),” the person said.

Back in Victoria, Judy Duff has seen firsthand some of the challenges with land lease communities.

She tried to leave her land lease community a few years ago but the exorbitant fees made it unaffordable to buy elsewhere.

Judy decided to do something about the lack of protections for retirees and 18 months ago set up a grassroots group, Victorian Manufactured Home Owners Association, to lobby for change.

She describes the situation in Victoria as a “legislative black hole”.

“The operators have been allowed to go on their merry way and do as they please,” she says.

“We need legislation, reform. We need standard leases; we need exit fees to be voided. We need dispute resolution. And we also need management to be trained in what is and what isn’t elderly abuse.”

She has created a series of photo boards of residents living in difficult conditions, including poor maintenance by some operators.

They include pictures of an uneven area where an elderly woman fell and broke her hip, a land lease operator that is selling homes in a community that lacks footpaths, requiring residents to walk on roadways with numerous potholes.

“Even when dry, this road is a major safety hazard,” the storyboard says.

In another, she says “many of these villages have hastily constructed homes with terrible building faults”.

“Some examples include mould growing in bathrooms, leaking windows, plumbing not connected, poor drainage and mould building up underneath houses from lack of ventilation.”

The day after 7.30 aired, the Victorian government said it would strengthen protections for Victorians living in land lease communities and said the commissioner for residential tenancies would lead a research project to “better understand issues impacting residents” in partnership with the Consumer Policy Research Centre and provide a report to the government by the end of the year.

The government has been aware of deficiencies in the legislation for more than a decade but has continued to drag its heels. 

Residents are hopeful that this time they will act.

Housing for the Aged Action Group chief executive Fiona York has been lobbying for change for years.

In terms of whether the reforms go far enough, she is encouraged the government is starting to take the sector more seriously, but says there is still a lot that needs to be done.

“We hope to see the government take action on things like unfair fees, management training and accreditation, and issues with dispute resolution,” she says.

She says over the past two and a half years, one of the land lease companies about which residents contacted her organisation most for advice was Palm Lake Resort Willow Lodge, operated by Palm Lake Group.

She says since new managers took over earlier this year, things have improved.

“We would say this supports our claim that the government should introduce mandatory training and accreditation for retirement housing managers,” she says.

‘They’re bullies’

Donna Moore saw firsthand the dirty tactics used by this operator after she inherited her grandmother’s home at the Willow Lodge community in Bangholme, Victoria, and tried to sell it.

She says she was told her grandmother’s 99-year lease did not exist and that the house had “serious defects,” which meant Palm Lake could not consent to the sale of the home in its current state. It instead offered her a small fee.

Donna challenged the operator in VCAT, saying she felt a responsibility to fight, to make it easier for the next person.

“Some poor old person who has to go into aged care, they’ll be left with nothing if they try to sell an older home,” she said.

The tribunal upheld her grandmother’s 99-year lease and in a separate hearing found that the house didn’t have “serious defects”.

Both parties to the dispute provided the tribunal with expert reports on the condition of the home. Palm Lake relied on an expert whose building licence had expired five years earlier.

The tribunal found the expert report relied on by Palm Lake “appeared to be exaggerated” and not supported by the photos.

It said the report included warnings of significant health and safety risks from asbestos and electrocution but noted the expert never observed these things and repeated references to “major wood rot” was not supported by the photos.

Ms Moore says she sold her grandmother’s home later that year for $240,000, which was significantly more than the original offer.

“They’re bullies, the power imbalance is so over the top,” she says.

She described the behaviour as elder financial abuse. 

In a statement, the company said: “There are several older Willow Lodge homes that do not pass modern building requirements because building standards have changed dramatically over the past five decades.”

“Palm Lake Resort is protecting future purchasers of these older-style homes by not issuing a site agreement until the home complies with modern building requirements.”

The company said it recently spent $1.5 million on improvements to the resort, and opened a $5 million community facility for residents.

Palm Lake’s Willow Lodge have been challenged in VCAT before.

Back in 2014, consumer advocacy group the Consumer Action Law Centre (CALC) took action on behalf of 14 residents, claiming the exit fees were an unfair contract term, operated as a penalty and were harsh and unconscionable.