Lifestyle Communities’ managing director said on July 30, three months after an investigation into the company revealed it had been charging exorbitant fees to residents to move out of the development. announced his resignation.
James Kelly, 65, who co-founded Lifestyle more than 20 years ago, will leave the company without a successor, the company announced to the Australian Securities Exchange (ASX) on Monday.
The company’s stock took a big hit in July, dropping 7.8% from $12.57 to $11.59 after the survey aired on July 30th.
Mr Kelly did not respond to questions about whether his retirement was related to the July 30 investigation.
James Kelly, Managing Director of Lifestyle Communities, has announced his retirement. (lifestylecommunity.com.au)
Lifestyle stocks have been down all year, falling 3.7% in morning trading.
Shares were trading at $9.03 per share shortly after 1 p.m. Monday.
Kelly made $43 million in September 2021 when he sold a portion of his Lifestyle stock, which was valued at more than $21 per share.
The company’s stock peaked at a high of $23.45 in October 2021 and then began to decline.
Lifestyle Inc. announced that it has begun the search for a new CEO. Kelly will step down on Dec. 31, and Chairman David Bright will run the company until a new president is appointed, the paper said.
The company operates “land lease” developments in which residents purchase homes (usually manufactured or mobile homes) and lease the land underneath.
It’s a rapidly growing sector worth $12 billion in Australia. This is exacerbated by the housing affordability crisis and an aging population.
“Financial Prison”
But former police officer Geoff Gauci, who lives in the Wollert lifestyle development in Melbourne’s north end, previously told the ABC the arrangement was “like being in a financial prison”.
Lifestyle Charge cancellation fees are calculated at 4% per year and cap at 20% after 5 years.
This means that if a resident sells their home for $500,000, they will have $400,000 left over after five years of fees.
Mr Gauci said he began pursuing the issue after learning that rival land leasing company Stockland, a major real estate developer, was not charging exit fees.
Approximately 80 residents of the Wallat development area have taken legal action against Lifestyle, claiming that the fees are exorbitant and in violation of the law.
Lifestyle denies the allegations and is contesting them in the Victorian Civil and Administrative Tribunal.
In a statement to the ASX, Mr Bright praised Mr Kelly for “creating a thriving business built on purpose and a strong culture”.
“While we are saddened by his departure, we have been discussing the timing of James’ retirement for some time and remain deeply grateful for his contributions and the positive impact he has had on the lives of many.” said.
Kelly said he will “spend more time with family and friends and perhaps explore some new ventures.”
“I am deeply grateful for the trust and support of our homeowners. Witnessing their experiences in our community is the most rewarding aspect of my role, and their stories are always It’s close to my heart.”
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Lifestyle told the inquiry that it is legal to charge an exit fee in Wallat and that most operators do so.
The company also defended its processes and the fees it charges as transparent and said it takes its compliance obligations extremely seriously.
The company announced in August that it would hire an independent expert to “monitor the business to see if any aspects of the model need to be readjusted.”
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