An Occupation Right Agreement, often referred to as an ORA, is the legal contract signed when moving into a retirement village. It sets out the terms of your residency and defines the relationship between you and the village operator.
Understanding the ORA
The ORA sets out your right to live in a specific home within the village and to use the village facilities. In most cases, this means you are buying a right of occupation rather than owning the home and land outright, although the legal structure can differ between villages.
Because of this, the terms of an ORA can vary, which is why it’s important to understand exactly what you are agreeing to.
What the agreement includes
The agreement details all key terms, including:
- The initial entry payment.
- Ongoing fees for maintenance and services.
- How the exit payment is calculated when you leave.
- Responsibilities of both the resident and the operator
- The process for terminating the agreement.
Why the ORA matters
Understanding your ORA is one of the most important steps before moving into a retirement village, as it governs both your financial commitments and your rights as a resident.
Occupation Right Agreement FAQs
Is an ORA the same as buying a home outside a retirement village?
No. An ORA is different from buying a home on the open market. It gives you a right of occupation within the village rather than full, unrestricted ownership. In some villages, residents may own the home itself, but the ORA still governs how the home can be used, what fees apply, and what happens when you leave.
Can ORAs differ between villages?
Yes. ORAs can vary significantly between villages, particularly in how fees are structured, how exit payments are calculated, and what services are included. Always read the ORA and disclosure statement carefully and seek legal and financial advice before making a commitment.
Can the ORA change once I move in?
The core financial and occupancy terms of your ORA cannot be changed without your agreement. Village rules, which are usually referred to within the ORA but set out in a separate document, can be updated over time by the operator, within the limits set by the agreement and legislation.
What happens to my ORA if I need to move into care?
This depends on the village and the type of care available. If a village has an on-site care home and you move into a care room, your ORA for independent living will come to an end and the relevant exit terms will apply.
Some villages also offer care suites that operate under an ORA. In these cases, the ORA for your independent home or serviced apartment will end, and a new agreement for the care suite begins.
Do I need a lawyer to sign an ORA?
Yes. New Zealand law requires residents to receive independent legal advice before signing an ORA, and a lawyer must certify that the agreement has been explained.
The costs of living in a retirement village
