Our Solicitor, Sarah Steer, recently shared an article with the Horowhenua Chronicle about Occupation Right Agreements and whether or not a Retirement Village is right for you.
Are you thinking of moving into a Retirement Village? Maybe your garden is getting on top of you, or you don’t want to be worried about fixing the hot water cylinder again. Retirement Villages can offer you peace of mind that someone else will take care of these problems for you. But is there a catch?
When you move into a Retirement Village you enter into an Occupation Right Agreement (“ORA”). An ORA gives you the right to live in the unit that you have signed up for, but it does not give you any property rights in that building or land. You have the right to live in the building as your home, but you don’t have the right to sell your unit, mortgage your unit or, in most cases, rent your unit to someone else.
The Retirement Villages Act 2003 and supporting regulations and rules lay down benchmarks that all Villages have to adhere to, but each ORA will be specific to the Village and may even be specific to you.
ORAs can seem intrusive as they can govern your right to have pets, guests, and even where you hang your washing. However, they also give you peace of mind that your neighbours are being governed by similar rules. Maybe spend some time thinking about whether regulated community living is something that is going to suit you or not.
It can be very helpful that your family understands why you are moving to a Retirement Village, especially because misunderstandings often occur about the financial implications of an ORA. What you pay for your Village apartment/home is not what you will get back when you move out. Entering into an ORA is not a good way to invest your money if you want to make a return:
When you end your ORA there will be a delay until you (or your Estate if you pass away while you have your ORA) will receive any funds back that you are owed.
An ORA is a lengthy document, and you will be required to see a lawyer before you sign. This appointment with your lawyer should take some time as you go through the ORA in detail. It’s helpful to bring your questions with you to the appointment and try to choose a time of day when your concentration is at its best.