Occupation Right Agreements Explained: A Plain-English Guide for NZ Residents
What an Occupation Right Agreement Really Means When You Move Into a Retirement Village
Most people only hear the term Occupation Right Agreement (ORA) once they’ve already started looking at retirement villages.
It’s a big document, full of legal language, and it’s not always obvious what you’re actually signing. But if you're thinking about village life — or helping a parent who is — understanding the ORA upfront can save a lot of confusion later.
This is a plain-English explanation of what an ORA is, how it works, and why the law requires you to get independent legal advice before signing.
It’s not a property purchase — it’s a right to live in the unit
One of the first surprises for people is that (generally - there are some exceptions) you’re not buying the unit the way you would buy a home.
An ORA doesn’t give you a title. Instead, it gives you the right to live in a specific unit, under the rules and structure of the retirement village.
The agreement sets out things like how long you can stay, what fees apply, who handles maintenance, how village rules work, what happens when you leave, and what your estate receives once you’ve moved out or passed away. It’s more like entering into a legal relationship with the village operator than purchasing real estate.
Why the Retirement Villages Act applies
Because this isn’t ordinary home ownership, ORAs are governed by the Retirement Villages Act 2003 and the accompanying Code of Practice.
The Act is there to protect residents. It requires villages to give you full disclosure, set out fees clearly, follow a complaints and disputes process, meet minimum standards for ORAs and operations, and offer you independent legal advice before you sign. The last point is important. Parliament recognised that these agreements are long-term, complex, and can have real implications for your finances and your estate. The law makes sure you have the chance to understand the arrangement properly before committing.
Why independent legal advice is compulsory
You must get independent legal advice before signing an ORA. This isn’t a “tick the box” step. The legal advice is there to help you understand the fees (including the deferred management fee), explain what you’re responsible for, outline how refund payments work, highlight any limitations on your rights, and make sure the agreement reflects what you think you’re signing up to.
Every village operates a little differently, and the detail matters. For example: some villages pay refunds only after your unit is relicensed, which can take months or longer. Some keep charging weekly fees after you move out. Some can change village rules without consulting residents. Some expect you to manage certain repairs inside the unit. Some will even govern what you can plant around your unit and what you cannot.
These aren’t good or bad clauses — they just need to be understood in context.
Why it’s worth reviewing the ORA before signing anything
Moving into a retirement village is a major life decision, and the ORA shapes the practical reality of that move.
A clear review can help you understand how the financial side works over time, what level of flexibility you have, how your estate will be affected, what rights you have around care, services, and changes in circumstances, and what happens if you want to transfer units or leave the village. Most people only focus on the upfront cost or the weekly fees, but the long-term parts of the agreement are just as important — especially refund timing and ongoing charges after departure.
Helping you understand the parts that matter most
An ORA doesn’t need to feel overwhelming - even if reading all the paperwork from start to finish can cure insomnia!
Once you strip away the formal language, the key questions are usually practical:
* What am I agreeing to live with each day?
* What will this cost me now and later on?
* How does this affect my estate?
* What flexibility do I have?
* What obligations fall on me versus the village?
If you have an ORA in front of you — or you’re helping a parent navigate the process — I can walk you through it in plain English and help you understand how it will work in real life.
Just get in touch when you’re ready.