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.
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