Retirement Village Occupation Right Agreements – Independent Legal Advice

Entering into a retirement village can be a stressful and challenging time.  Not only are you likely to be selling a much loved and long held family home, you may also be moving town or city (to be closer to family or friends), or dealing with advancing health issues. 

Before signing your Retirement Village’s contract,  called an Occupation Right Agreement, you will be asked to get independent legal advice to certify that you understand the terms and conditions of the Agreement.  It will also give you an opportunity to better understand the options you have to cancel your contract, after you move in and decide that it wasn’t the right decision for you. In some cases there will be no costs to cancel your contract if you do it within a certain timeframe.  You will also be asked to update your wills and enduring powers of attorney, or put them in place if you don’t already have any.

The reason why independent legal advice is so important is because buying an Occupation Right Agreement is unlike buying a traditional property.  You do not have the right to negotiate changes to the Agreement to give you more favourable terms and there may be fishhooks that could cause financial problems for you or the administrators of your estate.  Furthermore, you don’t own anything except the right to live in your unit and you may not be entitled to the capital gain on the property.  In fact, in many retirement villages, you will be asked to pay a Deferred Management Fee, or an Exit Fee, Village Contribution or Facility Fee, to cover the cost of refurbishing the village, such as communal amenities, footpaths, gardens etc...   Depending on how long you are in your retirement home, this Fee can range from 20% to 30%.  What’s more, if you require continuum of care and need to move into a new apartment, care suite or hospital unit,  you may be required to enter into a new Occupation Right Agreement and lose a further 20-30% of your capital investment. 

There is a lot of consider and while there are fishhooks to be aware of, living in a retirement village can also provide retirees with:

1. community and social engagement through purpose built amenities such as fitness centres, swimming pools,
2. maintenance free living
3. safety and security
4. flexible living arrangements that can accommodate you at your age and stage of life
5. access to health care, and
6. peace of mind.

The team at Trust Law & More will work with you, or your attorney if you have appointed someone to deal with your property, to ensure that you understand the terms and conditions of your Agremeent, and that it is the best option for your needs.  We can also help with your Wills and Enduring Powers of Attorney. And, if you need to sell your family home or have a family trust, we can help with that too.

Fortunately you can work with us from anywhere in New Zealand.  We can meet with you in the comfort of your home, by way of an online call through Zoom or Teams.  If you’re uncertain about this, all you need to have is an internet connection and a computer.  One of our oldest “Zoom” clients was 98 years of age. Another client “met” with us and her son, who was living in a different country entirely!