Retirement Village Contracts

With a growing number of retirement villages popping up in Kerikeri and the surrounding districts there are more and more opportunities for people to choose lifestyle options for their living arrangements in retirement.



While there are many benefits to village style living, like freedom from home maintenance and the safety and security of managed living, what does it actually mean to buy into a village environment? Do you have ownership of your property? What rules govern your use of the space you end up occupying? How do you sell out if you wish to leave?


This is where it can get tricky and it is important you take time to understand any contract before signing. Living in a village isn't the same as owning or renting your home, to live there you will be signing an Occupation Right Agreement (ORA), basically the village management will give you the right to live in that unit but no ownership right to it.


Each village will have its own version of a contract but many will cover similar clauses that need to be considered, such as:

· Are you liable for the cost of repairs to appliances and other items in the unit, even though you don't own them? Yes, in many situations you will need to pay for any repair that occurs outside of your first month in the village.

· Who retains the capital gains made when your ORA is sold to the next resident? Often a portion of gains made are kept by the village. There is also often an "exit fee" built into the contract meaning purchasing an Occupation Right Agreement is not an investment, it is a lifestyle choice.

· Are you able to have visitors staying e.g. grandchildren or other family? Generally, this is allowed but with some restrictions on how long those visits can be.

· Will you be allowed to work from your unit if you wish to continue you work from home income?

· What structure is in place for the village to increase their annual management fees and how often can they make those increases?


Moving into a village is a major financial and life decision. Given the risks it pays to seek advice on any contract before signing. If you are considering a move into a retirement village give Law North a call on (09) 407 7099 and we can help you to review your contract and consider your options.