Landmark decision about exit fees and rent charged to dead residents in over-55s land lease communities

A group of residents were successful this week in an application brought against the operators of the Wollert Lifestyle Community (Lifestyle).  The application concerned the validity of exit fees in residents’ Residential Site Agreements (RSA) and covenants that allow rent to be charged after a resident dies.  

Residents typically buy a home from Lifestyle and rent land on which the home is located, and are then required to enter an RSA which requires them to pay an exit fee, calculated as a percentage of the price when they on-sell their homes.  Also, on the death of a resident, the RSA says their estate must keep paying rent but they are not able to occupy the home.

VCAT President Justice Woodward delivered his ruling on Monday, 7 July 2025, finding that: 

1. exit fees in RSAs could not be charged if the amount of those fees is not disclosed up front.  As the amount of a resident’s exit fees is not known until sale, Lifestyle’s model of exit fees as a percentage of sale price can never comply with and cannot be charged under s 206S of the Residential Tenancies Act 1997 (Vic) (RTA);  and
2. to require grieving relatives of a deceased resident to pay rent but not be able to occupy the home is ‘harsh, if not unconscionable’, and the RSAs are to be varied under s 206G of the RTA to allow the estate of a deceased resident to sub-let the home before sale.

The decision will have flow-on affects for residents not only at Wollert Lifestyle Community, but any resident at the 24 operating Lifestyle Communities in Victoria with these kinds of clauses in their RSAs.

See below links to Justice Woodward’s ruling and recent media coverage by The Age and Sam’s interview with ABC Radio National Breakfast.

Sam Hopper SC and Eli Fryar