More than 130,000 people live in 'land lease communities,' gated villages marketed to those over 50. However, these properties can become financial traps, as they are difficult to sell, and some companies charge residents expensive exit fees. Frustrated by these practices, some elderly Australians have decided to take on a billion-dollar corporate giant.
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TVTranscript
00:00Resort style living for the over 50s. I went into one and it looked like you were stepping
00:08into the Truman Show or Pleasantville. They all look the same and they're pitched as affordable
00:14housing and you buy the house and you rent the land. So you pay maybe $200 to $250 a
00:22week in rent. When you come to sell it, in lifestyle communities you pay an exit fee
00:28of up to 20% of the price of the sale. So if you sell it for a million dollars, they'll
00:33take $200,000 of it.
00:36Now the owners, some of the residents are saying that the contract had been manipulated.
00:41Explain why they're coming to that sort of allegation.
00:44They started by looking at some other competitors such as Stockland, which aren't charging exit
00:51fees on the way out. They started looking at the legislation and their contract and
00:56found that there may be some discrepancies, that maybe it might be in breach of the legislation.
01:02And they just felt that they were hoodwinked.
01:05And some residents are saying that this has become a financial prison, which is a horrible
01:10thing to be in at that time of your life. Is it a case of some people not reading the
01:15fine print properly?
01:17Well, lawyers don't really look at these. So one organisation in Melbourne wrote to
01:24the Law Society in Victoria to ask how many lawyers know about these contracts and they
01:31got an email back saying none of them. So they're quite deliberate contracts. And there
01:38are things in it such as they charge rent to the dead. So if you die, you have to keep
01:44on paying rent. So until the home is sold, family members can't move in, family members
01:51can't rent it out to somebody else. They have to sell it and it can take up to a year and
01:57they have to keep paying rent during that time.
01:59Real problem, isn't it? And apparently the laws on this are slightly different in Victoria
02:05compared to the rest of Australia. Why is that?
02:07Yeah, so the legislation in Victoria is under the Residential Tenancies Act, which is not
02:13– you know, that's designed for something else other than these type of properties.
02:17In other states they're deliberately customised legislation for them. But in South Australia
02:24exit fees are banned. In other states they're more prescriptive, what you can and can't
02:28do. So in Victoria it's really loose.
02:31So what's next for these residents who want to take action?
02:35So they're going to VCAT, which is a tribunal and you can air property disputes. So that's
02:42really the only course of action for them, to try and challenge whether these fees are
02:48legal or not. There have been other cases in VCAT with other operators and in one case
02:54the residents won. In other cases they tend to settle, so you don't know what happens.
02:59You've been speaking to some of the lifestyle communities as well. What have they been saying
03:03to you?
03:04They've been saying that they are confident that their contracts are legal, they put residents
03:09first, everything is fair, everybody's happy.