When retired policeman Geoff Gauci packed up his old life and moved to an over-50s gated community on Melbourne's northern fringe, he pictured his next chapter as peaceful.

After spending 36 years investigating shoplifters, drug trafficking, burglary, fraud and deception, it was time for the quiet life.

Seduced by promises of low maintenance and resort-style living at an affordable price, he bought into a Lifestyle Communities development at Wollert, impressed with its high-security cameras and boom gates that guarded a manufactured urban landscape of neat rows of uniform houses and perfectly manicured fake lawns.

It was a setting reminiscent of the Hollywood movie The Truman Show.

"The way it was presented to me and my wife, I expected everything to be above board, knowing that I'm dealing with Lifestyle, a publicly listed company," he says.

"I did my homework, and I checked on them. And I would have assumed that everything was kosher."

But 18 months later, earlier this year, he and two other residents, Thom Meads and Steve Doudle, found themselves investigating the utopia they thought they'd bought into.

"To me, it's like I'm in a financial prison," Gauci says.

"I've got to bail myself out in order to get out, and it's just wrong."

A booming $12 billion industry

Lifestyle Communities specialises in land lease communities in Victoria, where residents buy the home, usually a manufactured or moveable dwelling, and rent the land, similar to a caravan park.

The company is part of the booming $12 billion land lease industry, a sector that houses more than 130,000 Australians across the country, fuelled by a housing affordability crisis and an ageing population.

Its growing popularity has attracted property heavyweights including Stockland, Mirvac and GemLife to the fray, all vying for a slice of the industry's fat profit margins and a ready supply of over-50s.

Lifestyle has been in the land lease business for more than 20 years, operating 22 communities and selling homes to 5,500 residents across Victoria.

For most of that time it has stayed under the radar, but Gauci is one of dozens of residents who are now challenging some aspects of its business model.

Speaking exclusively to 7.30, Gauci and some other residents at the Wollert community accuse the company of immoral and unethical conduct, ranging from charging dead people rent and misleading marketing to questionable fees when residents come to sell their home.

So far, 80 residents at the Wollert Lifestyle Community have quietly lodged a claim against Lifestyle Communities in the Victorian Civil and Administrative Tribunal (VCAT) over fees they believe are excessive and in breach of the law.

Targeting 'Miss Lonely, Miss Homely and Miss Active'

It comes as a tide of discontent washes over investors who in recent months have been raising their own questions about Lifestyle after it tapped them for $275 million in fresh equity to grow the business.

Weeks later, in April, the company announced a downgrade of its new home settlements for the year to June 2024, which triggered a sharp fall in Lifestyle's share price from $18 to $12.50.

Privately, some investors told 7.30 they had been further disquieted by comments made at an investor conference in Sydney in May, when Lifestyle described single retired women, a key cohort of its prospective buyers, as "Miss Lonely, Miss Homely and Miss Active" then referred to a marketing campaign as "targeting her between the eyes".

One fund manager said it made them feel sick.

"It sounded like a predator preying on the vulnerable. Not a good look for the culture," the fund manager said.

The company declined an interview but answered a series of questions. It said it regretted the language used at the conference and said it was not reflective of its brand.

When 7.30 told Gauci about the labels the company had ascribed, he said he was disappointed but wasn't surprised.

The price of leaving Lifestyle

Gauci's battle with Lifestyle began when he realised one of its competitors, Stockland, was not charging its land lease residents exit fees, but had been selling properties at similar prices, off the plan, which would charge a similar rent and provide similar facilities, just a short ride from his home.

Exit fees are calculated on the sale of the home starting at 4 per cent of the selling price and scaling up the longer the person has owned the home, up to a cap of 20 per cent from the fifth year.

This means Lifestyle benefits from any capital gain but doesn't bear any capital loss.

A house that sells for $500,000 after five years leaves the resident with $400,000.

When Gauci queried the local Stockland sales representative, he says he was told exit fees weren't allowed in Victoria.

"Well, that was a red rag to a bull for me," he says.

Doudle believes the exit fee was misrepresented to him, and he would have never bought into the community if he knew then what he does now.

"Being here now after three and a half years, knowing what I know, if I knew that at the time of signing, I would not be here," he says.

Lifestyle makes about $13 million a year from exit fees, arguing on its website they keep the home price and weekly site fee "at an affordable level".

Exit fees are a key attraction for Lifestyle's investors, who value the company at $1.5 billion.

The company's biggest shareholder, AustralianSuper, owns almost 15 per cent of Lifestyle and for years has had a common director on Lifestyle's board, most recently as chair.

AustralianSuper said in a statement that it regularly engaged with companies it invested in to understand their business strategy "consistent with our objective of maximising long-term value for members".

In the case of Lifestyle, it said as there were legal proceedings underway it would not be appropriate to comment on specific issues, "but we have engaged with the company and believe they are focused on addressing the issues raised in a consistent and considered manner".

It said as a long-term shareholder it "looks to support the companies we invest in when they raise capital".

"Our participation helps these companies and has delivered strong returns for members."

Estates charged rent after residents die

Charging dead people rent is another concern of some of the residents.

It has become an emotional issue for dozens of residents at Lifestyle's Wollert community after the families of a couple of deceased residents struggled to find buyers, while the rent continued to rack up and the exit fees ballooned.

The contract states that when a person dies or leaves the community, they or their estate have to keep paying rent until the house is sold, which can take months or years.

Dayle Callus experienced this firsthand when Lifestyle charged her mother-in-law Diane's estate almost $12,000 in rent for a year after she died.

When the house finally sold, the company included an extra 4 per cent on the exit fee, due to the extra year of ownership while it sold, bringing it to more than $70,000.

"When Diane passed, I asked if they [Lifestyle] could list the property for sale. And they declined. They said to me that it's not in their best interest to sell the property. They blatantly told me that they had other new homes available," Callus says.

She is suspicious that a few buyers for her mother-in-law's home changed their mind for one of Lifestyle's new homes and that the sale of the house was not a priority for the workers at Lifestyle.

Lifestyle said it had "no incentive to delay the sale of a home and the team works closely to support and advise deceased estates to ensure the home is advertised for a reasonable price and will transact quickly to avoid ongoing fees."

It said the average time to resell a home in 2024 was 63 days. It said residents could use external real estate agents to sell a property.

However, some real estate agents are deterred from listing land lease properties because they aren't as readily understood by the wider public and, depending on the operator, the contracts can be complex.

It puts land lease operators in the box seat to control the market, prioritising the sale of new houses over resales and charging rent, even if the place is empty. Residents are not allowed to sublet their homes.

The issue of charging dead people rent prompted Gauci to write to Lifestyle earlier this year, saying it was "disrespectful, unreasonable, unfair and inhumane for this deceased person to continue to pay for a service that they can no longer use or enjoy".

It's become a hot topic for some residents, who last month attended a gathering at Wollert's clubhouse to share some of their concerns.

"When I die … it could take two years to sell or three … why would somebody want to buy in here, when they can go down the road and buy one with no [exit] fees … and by the time maybe they sell it, there'd be nothing for my children," one resident said.

Lifestyle said home owners who exited in 2023 made an average profit of $79,609 after paying the exit fee.

It said entry prices into Lifestyle were "substantially lower" than competitors that did not have exit fees.

In relation to charging dead people rent, the company said these costs could be suspended and deducted from the proceeds of the sale of the home.

It said its policies were in line with relevant legislation and other operators.

Legal test looms

Residents at Lifestyle's Wollert community hope to test the validity of Lifestyle's exit fee in VCAT.

Experts such as Housing for the Aged Action Group (HAAG) chief executive Fiona York have been challenging exit fees in VCAT for years. She believes they are likely to be illegal.

South Australia has banned exit fees on land lease residences and NSW regulates them.

But Victoria has been slower to act despite a series of reviews dating back to 2016 that highlighted deficiencies in the legislation and inadequate internal dispute resolution processes for vulnerable people.

Victoria is also one of the only states that doesn't have its own dedicated legislation for land lease operators. Instead, it operates under a section of the Residential Tenancies Act.

York says this is why some unscrupulous Victorian operators have been wrongly charging exit fees, which she believes is a breach, but for residents VCAT is one of the few avenues for redress.

"The Residential Tenancies Act just wasn't meant to regulate this kind of housing, and changes to the law haven't kept pace with a rapidly growing and changing industry," she says.

"Some of the provisions are unclear or provide insufficient protections for residents, and even the protections that do exist are rarely enforced. This has let some operators get away with charging unfair and even unlawful fees."

York says VCAT is a lengthy process that can be stressful for some elderly residents.

She says HAAG has had success with a number of cases, including arguing in one case that an exit fee based on the sale price of a dwelling – since that sale price is unknowable at the time the site agreement is entered into – is prohibited under this section of the act.

There have been some other cases that have gone to VCAT, but they have been settled in confidential agreements.

"We do think that land lease communities could be a really great housing option, and it could address the housing crisis for older people with low incomes and low assets.

"However, at the moment, it just really isn't, isn't something that we would recommend because of the lack of legal protections."

In a statement, Lifestyle said it was confident of its contracts and said its agreements complied with the law.

"We welcome the opportunity to resolve this matter in a legal setting," it said.

It said it was concerned that a "small group of home owners" had facilitated a campaign at the Wollert community suggesting the business model and legal construct was not lawful.

It said most home owners disagreed with the current action by the 80 Wollert residents and felt "undue pressure" was being applied on home owners who were unaware what they were signing up to with a VCAT application.

It said it had a high satisfaction rate with most of its residents, describing its customers as its "north star", and that exit fees were common in the sector.

It said it did not make money from developing a site — only from resales through an exit fee — which it said allowed new home prices to be as low as possible.

'Victims of the advertising jingle'

While there are few complaints about the standard of the facilities, which include swimming pools, a bowls green and gym, some residents say aesthetics can come at a high price.

One elderly resident said she was told she couldn't put a ramp at the front of her house for a wheelchair.

"I've been diagnosed with an autoimmune disease, so, shortly in 12 months, I'm going to end up in a wheelchair and we have been told by Lifestyle, there's no way you can put a ramp in the front of your house … because that will spoil the look of the houses, so what have I got to do — to get through the garage to get up into the house?"

Lifestyle said in a statement that the front of all properties was maintained to preserve the look and feel of the community.

Robert Humphris says he tried to get out after realising what he bought wasn't what he expected.

He told 7.30 "we were victims of the advertising jingle," noting that the marketing spin made everything look like Disneyland.

He says it cost him close to $100,000 in fees and other costs to leave the community, wiping out most of the capital gain he made when he sold the house, but says the feeling of relief from getting out was worth it.

"There is no sanctuary and no peaceful bliss at Lifestyle Wollert, there may be at another establishment, but it certainly didn't exist there," he says.

"So, we made up our minds that it wasn't for us, and we were out."

He says in the contract, Lifestyle says it will do everything to assist with the sale, but he's convinced that when it came time to sell, they didn't help because their priority was selling new properties in the same community.

"I've got it in writing from one of the managers when we questioned about putting the home on the market. Will you assist us to sell? And he said no," Humphris says.

He hired a real estate agent, but he says he was suspicious prospective buyers were directed to new properties with cash incentives, free electricity, dinners and other inducements.

"They were directed away from our home – if they showed any interest or indicated that they'd looked at our home that was for sale, they were told, 'no, you don't want that one. We've got a better one for you'," he says.

He says it cost him almost $100,000 to get out of Lifestyle, including $63,000 in exit fees, short term rental and home improvements, wiping out most of his capital gain.

"And in your late 60s you never get that back," he says.

Lifestyle said it was aware of this case and "the home owners' price expectations were too high, and presentation of the home was a key challenge that impacted time on market".

Lifestyle offers a range of incentives to residents if they successfully introduce a new customer who goes on to buy a new home. They include $1,000 cash offers, dinners, free electricity for two years and expensive international holidays worth thousands of dollars.

The purchaser also gets various incentives including cash offers and free electricity.

Humphris believes this use of rewards for referrals played a role in the delays to the sale of his established home.

Rewards for referrals have become a powerful sales tool for Lifestyle.

On its website it says it is "passionate about putting our home owners and their needs first" and "as a result of this commitment, our surveys show that 95 per cent of our home owners are prepared to recommend Lifestyle Communities to friends and family".

Importantly, it says 52 per cent of new home sales come from referrals "by satisfied existing home owners".

But some residents say the heavy use of referrals is starting to feel uncomfortable. Geoff Gauci is one of them.

Before he started investigating Lifestyle, he was one of the group's biggest referrers.

Last year he was rewarded with special dinners, theatre tickets and cash prizes. He won and accepted an overseas trip valued at more than $10,000 after making seven referrals that converted to settlements.

Now he says he feels guilty. "We're basically aiding and abetting Lifestyle, to bring people into the community to sell the product," he says.

Another resident told 7.30 she has received emails saying, "Why have I never referred anyone to a Lifestyle village because people get $1,000 or $2,000 for referring someone," she says.

"I'm not comfortable referring someone else, if I'm not comfortable here."

7.30 has obtained a copy of a marketing leaflet distributed earlier this month at a function in Melbourne, titled "Spread the word" and "unlock the Lifestyle Plus rewards by introducing friends to Lifestyle Communities".

It offers $1,000 cash for each name and phone number that isn't in their database.

It comes as the company informed investors of a downgrade in the sale of new homes for the year to June 30, 2024.

For now, the 80 residents at Wollert have pinned their hopes on VCAT for some resolution.

It has made them unpopular with the company and some other residents, but they hope their case will lead to reform.

"It's fantastic that they're taking action in VCAT," Fiona York says.

For every person that does have the time and the patience and the strength to go to VCAT, there's a whole lot of other people that are suffering in silence."

Watch Adele Ferguson's story on iview.