Lifestyle Communities loses Victorian court appeal over management fees

Lifestyle Communities Limited has lost an appeal in the Supreme Court of Victoria regarding the calculation of Deferred Management Fees (DMF). The court upheld a previous VCAT ruling that requires DMFs to be calculated based on the resale price of homes rather than the purchase price.

In response to previous legal challenges, the Melbourne-based company had already transitioned its business model to base fees on the purchase price, capped at 20% over five years. This shift aligns with the proposed Consumer Legislation Amendment Bill 2026. The company has already recognized financial provisions for the repayment of fees collected from previous homeowners impacted by the initial VCAT orders.

Despite these legal setbacks, the company reported a recovery in sales momentum for the 2026 financial year. Net new home sales rose 55.4% to 216 units. The company reported a statutory profit after tax of $46.9 million, a significant turnaround from a $195.3 million loss in FY25, although operating profit after tax decreased to $25.4 million due to lower settlements and higher interest expenses.