HAAG executive officer Fiona York led a delegation to Federal Parliament this week to meet with Victorian MP Cassandra Fernando and other politicians in demanding housing support for older people. Photo: Facebook/HAAG.
Housing for the Aged Action Group (HAAG) is calling on the Victorian Government to establish a retirement housing ombudsman, following allegations a gated community provider has been charging fees that may be in breach of the law.
The group’s demands follow an ABC 7.30 report claiming that Lifestyle Communities has been overcharging residents in their over-50s dwellings, making it extremely difficult for them to leave. Broadcast over the weekend, it focused on 80 Lifestyle homeowners in the northern Melbourne suburb of Wollert who had lodged claims in the Victorian Civil and Administrative Tribunal (VCAT).
Executive officer Fiona York said the story was “unfortunately not a surprise” to HAAG, being just one example of many problems caused by a lack of regulation in the state.
“Land lease communities should be part of the solution to the housing crisis,” Ms York said. “But currently we’re seeing unscrupulous operators in an underregulated space trapping older people in bad situations.
“We speak with lots of older Victorians and their families who are concerned, being abused or harassed by park operators and managers.
“It’s a rapidly growing and changing industry and legislation just hasn’t kept pace.”
According to the ABC investigation, exit fees, one of Lifestyle’s major revenue sources in Victoria, are either banned or highly regulated in other states.
Calculated on the sale of the home, they begin at 4 per cent and increase to 20 per cent after five years of ownership. This means a house selling for $500,000 after this period would leave the resident with $400,000.
However, Lifestyle’s contracts make it such that when a resident dies or leaves the community, they or their estate must keep paying rent until the property is sold. This process can often be lengthy.
Since these revelations came to light, Lifestyle Communities’ share market value has fallen by more than $200 million. The company responded to the media in a statement on the ASX, rejecting all allegations made in the VCAT applications and flagging its intent to defend them.
“Lifestyle Communities have been engaging with the group of homeowners since February 2024,” the ASX statement said. “The homeowners have not been satisfied with our responses and have made applications to the Victorian Civil and Administrative Tribunal (VCAT).
“Lifestyle Communities respects the rights of homeowners to pursue the VCAT pathway and believes this is the appropriate forum for resolution of the matter.”
Ms York welcomed the Victorian Government’s announcement yesterday (15 July) that it has made regulatory reform of the sector a priority.
She said HAAG looked forward to working with the government to address these issues for elderly residents, recommending six measures:
- Establishing a retirement housing ombudsman
- Stopping “excessive” fees
- Addressing “complex and ambiguous” contracts by making them standardised like rental agreements
- Introducing training and accreditation standards for managers of land lease communities, bringing them in line with what is expected of residential real estate property managers
- Protecting residents’ right to sell
- Involving residents in any reform process.
Yesterday, Victorian Consumer Affairs Minister Gabrielle Williams said the government was working with residents on new protections for the residential parks community.
“I want as many residents and park operators as possible to participate in our research – so we can make sure we’re delivering the protections that residents need and deserve.”
According to the Minister, these new protections will ensure all site agreements are in a standard form and key information (such as rent increases) is disclosed ahead of entering into an agreement so rights and obligations are clear to residents and site owners.
Residential Tenancies Commissioner Dr Heather Holst is also set to lead a research project, in partnership with the Consumer Policy Research Centre, that will be provided to the State Government by the end of the year. The project will engage with residents, industry, housing experts and community organisations such as HAAG and the Manufactured Home Owners Association.
Minister Williams said there would be dedicated surveys for residents and operators for the government to understand what challenges they were facing, along with a review of the legal and policy settings for residential parks in other jurisdictions and research into the industry’s operating practices.
