Taupō Legal Corner: Right of Occupancy Agreements by Julie Schmidt
There are many things to consider if you are making the move to a retirement residence. Photo/Getty Images
Thinking of living in a retirement village? Or know someone who might think of it?
Before moving, you will need to sign an Occupancy Rights Agreement (ORA).
An ORA gives the right to occupy accommodation in a retirement village. ORAs do not give you any ownership rights. This means that you will not be able to sell your ORA, make capital gains on it, or leave it to your loved ones after your death.
Instead, AROs only give you the right to occupy a unit, usually until you die or until you no longer wish to occupy the unit.
Usually, to occupy a unit, you will have to pay a fee up front. You will then pay the village a percentage of this fee after you cease occupying the unit.
When you no longer occupy the unit, you will receive the money you originally paid back minus any fees you have to pay to the village and any other expenses you may have incurred with the village. However, this speaks in a very general sense, and the exact terms of each ORA should be read and understood, as they may differ from this explanation.
Legally, ORAs must contain certain information. This includes information relating to staffing of the retirement village, safety and security of residents, maintenance and upgrades, termination of ORA and well other subjects.
Before you sign an ORA, you must also receive a Disclosure Statement from the retirement village (which outlines village ownership and a bunch of other factors), the Village Residents’ Code of Rights, a copy of the ORA, and practice village code (if applicable).
Additionally, before you can sign an ORA, you must receive independent legal advice. Your lawyer should explain to you the general effect of the ORA and its implications. This explanation must be given in a way that you understand, and not in a way that is too legal and complicated.
If you need advice before signing your ORA, Frontline Law can help.