Lifestyle Communities is making changes for its homeowners. After the Victorian Civil and Administrative Tribunal (VCAT) appeal, all existing residents can choose to switch to a new Deferred Management Fee (DMF) model, no matter the outcome of the appeal. This company builds and manages land lease communities, focusing on affordable housing for retirees, complete with various amenities.
In July, Lifestyle Communities updated the DMF structure for new residents. A VCAT ruling invalidated agreements made before July 7. The previous fee setup was based on a percentage of the future sale price, which the tribunal deemed confusing and unclear. The new model instead takes the original purchase price, capping the DMF at 20% over five years.
This ruling led Lifestyle Communities to reassess the value of its DMF assets. As of June 30, they had to mark these assets down to zero. They’ve collected positive feedback during discussions about extending the new model to current homeowners. If all residents decide to switch to the new DMF, the company estimates a potential adjustment of up to $117 million, as the value would change based on homeowners’ choices.
The potential for this adjustment reflects broader housing trends. As more seniors seek affordable living, companies like Lifestyle Communities are adapting to meet these needs. A recent survey found that 72% of retirees prioritize community amenities and financial stability when choosing a residence. This shift in preference underlines the importance of flexible housing options.
Overall, these adjustments aim to enhance customer satisfaction and attract new residents. Keeping residents informed and engaged could strengthen goodwill, which is crucial as referral-driven sales have historically accounted for about 50% of all sales in the community.
For more insights on housing trends and retirement living, visit this HUD report on affordable housing strategies.
