The managing director of Lifestyle Communities has announced his retirement, three months after a 7.30 investigation into the company exposed the high fees it charged residents when they left its developments.
James Kelly, 65, who co-founded Lifestyle more than two decades ago, is leaving without a successor in place, the company told the Australian Stock Exchange (ASX) on Monday.
The company's share price was hit hard in July — when 7.30 broadcast its investigation — falling 7.8 per cent from $12.57 to $11.59.
Mr Kelly did not respond to questions about whether his retirement was linked to the 7.30 investigation.
James Kelly, managing director of Lifestyle Communities, has announced his retirement. (lifestylecommunities.com.au)
Shares in Lifestyle, which have been falling all year, dropped 3.7 per cent in morning trade.
Shortly after 1pm on Monday, it was fetching $9.03 a share.
Mr Kelly made $43 million from selling some of his stake in Lifestyle in September 2021, when the stock was worth more than $21 a share.
Company shares hit a peak of $23.45 in October 2021 before beginning to slide.
Lifestyle said it has started looking for a new CEO. Mr Kelly will finish on December 31 and chair David Blight will run the company until the new boss starts, it said.
The company runs "land lease" developments where residents buy homes — usually a manufactured or moveable dwelling — and then lease the land underneath it.
It is a booming sector worth $12 billion in Australia. It is fuelled by a housing affordability crisis and an aging population.
However, retired ex-policeman Geoff Gauci, who lives at a Lifestyle development in Wollert, on Melbourne's northern fringe, has previously told the ABC the arrangement was like being "in a financial prison".
Lifestyle charges exit fees calculated at 4 per cent a year and capped at 20 per cent after five years.
This means that if a resident sells their house for $500,000, after five years of fees they would be left with $400,000.
Mr Gauci said he started pursuing the issue after learning that a rival land lease operator, property development giant Stockland, did not charge exit fees.
About 80 residents of the Wollert development have taken legal action against Lifestyle, alleging its fees are excessive and in breach of the law.
Lifestyle denies the allegations and is fighting the claim at the Victorian Civil and Administrative Tribunal.
In a statement to the ASX, Mr Blight praised Mr Kelly for "creating a thriving business grounded in purpose and strong culture".
"While we are saddened by his departure, we have been discussing the timing of James's retirement for some time and we remain deeply grateful for his contributions and the positive impact he has made in the lives of many," he said.
Mr Kelly said he would be "spending more time with family and friends and perhaps exploring a few new business ventures".
"I extend my heartfelt thanks to our homeowners for their trust and support. Witnessing their experience in our communities has been the most rewarding aspect of my role, and their stories will always remain close to my heart."
Responding to the investigation, Lifestyle said charging the exit fee at Wollert was legal and most operators did so.
It also defended its processes and the fees it charged as transparent and said it took its compliance obligations extremely seriously.
In August, the company said it would also hire an independent expert to "run a ruler over the business to see if we need to recalibrate any aspects of our model".
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