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Land lease community developer Lifestyle Communities (ASX: LIC) reports a small percentage of customers cancelled their deposits for homes in response to critical coverage from the ABC in July, prompting managing director and co-founder James Kelly to make personal phone calls in a hearts-and-minds campaign to turn the tide.
After the company reported an operating profit decline of 26 per cent to $52.9 million following the market's close yesterday, this morning its leadership held a web conference to discuss the results and address concerns following the exposé.
Kelly explained that most of the customers who cancelled their deposits already had long lead times out to FY26, while the "overwhelming majority" remained on their journey to move into one of Lifestyle's communities.
"Having spoken to them all, we're sort of confident of getting them back, that the decision was taken quickly," he said.
"We expect to get most of them back over time. Post that first week, we haven’t seen cancellation rates continue for that reason. I know we had one established home deposit cancel.
"I've actually been picking up the phone, talking directly to some of them. I’ve saved two."
The company had 27 new home settlements completed between 1 July and 12 August, with 348 new home deposits on hand including 228 to be completed and available for settlement this financial year, and 120 homes for FY26.
Kelly added he would be visiting every community in September and October to meet with homeowners - a practice he said he did every six months anyway, but now the timing would be convenient in light of recent events so he could reassure people.
The ABC's 7:30 current affairs program called out Lifestyle for its exit fee policy for residents whereby the percentage to pay rises in increments of 4 per cent each year to a cap of 20 per cent, as well as materials from an investor conference where the company claimed it was targeting "Miss Lonely, Miss Homely and Miss Active".
For the report itself, Lifestyle provided a statement expressing regret over that specific language. The company has, however, stood by its position on exit fees, also known as deferred management fees (DMF).
Residents featured in the program, from Lifestyle's community in Wollert in Melbourne's north, said they felt like "prisoners" under these policies.
"We had eight sales at Wollert in the month of June and seven of those were referred, which is sort of ironic," Kelly said.
"Interestingly enough, we've made a couple of sales at Wollert this month; you’d think we wouldn’t sell in Wollert, where all the attention was focused.
"You've got people who really believe the model, and therefore will go out and help market it."
Following the media coverage the company has sought to expedite a hearing with the Victorian Civil and Administrative Tribunal (VCAT) where many of the complaints outlined in the story have been formally lodged with the regulator.
Lifestyle is still yet to receive guidance about when and in what format the hearing will take place given VCAT has a long wait list of other residential claims. In the meantime, Kelly says the company's community residents have sent "a lot" of complaint letters about the ABC's coverage to the Minister for Communications.
The co-founder claimed that homeowners were "really offended" by the coverage, alleging that it portrayed them as "stupid" and that they didn't know what they were doing.
He said there had been pushback against the coverage allegedly conveying the idea that "somehow everyone over 65 is old, frail and stupid". The program did not refer to any of the matters concerned being connected to the intelligence of customers.
"We explain it so clearly around why it works and how we keep our entrance price so low," Kelly said in the conference.
"I quite like the idea of having maybe an option of having to pay 20 per cent upfront or 20 per cent when you leave; either pay more, enjoy less, or enjoy more and pay later.
"I know which way most people go, but it kind of then debunks the whole thesis of the story that went through the ABC saying somehow people were financial prisoners because they had to pay a DMF, where they forgot that they actually paid a very, very low going price from the get-go.
"This is where we’re sort of interested in this review to sort of get independent eyes on which is the best way to tackle this."
LIC shares are down 5.87 per cent today at $8.50 at the time of writing.
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