Thinking about a retirement village?

Are you thinking about living in a retirement village? Or know someone who might be thinking about it?

Before making the move, you will need to sign an occupation right agreement (ORA).

An ORA gives someone the right to occupy a unit in a retirement village. ORAs do not give you any property rights. This means you won’t be able to sell your ORA, get capital gains on it, or leave it to your loved ones after passing away.

Instead, ORAs only give you a right to occupy a unit, generally until passing away or you no longer wish to occupy the unit.

Usually, to occupy a unit, you will need to pay a fee upfront. You will then pay the village a percentage of that fee after you stop occupying the unit. When you no longer occupy the unit, you will get the money you initially paid back minus the fee you must pay to the village and any other expenses you might have accrued with the village. However, this is speaking in a very general sense, and the exact terms of each ORA need to be understood fully, as they may differ from this explanation.

Legally, ORAs must contain certain information. This includes information relating to the staffing of the retirement village, the safety and security of residents, maintenance and upgrading, the termination of the ORA and many other topics.

Before signing an ORA, you must also receive a disclosure statement from the retirement village (which outlines the ownership of the village and a bunch of other factors), the village’s residents’ code of rights, a copy of the ORA, and the village’s code of practice (if any).

Also, before you can sign an ORA, you must receive independent legal advice. Your lawyer must explain the general effect of the ORA to you and its implications. This explanation must be given in a way that you understand, not in a way that is overly legal and complicated.

If you need advice before signing your ORA, Frontline Law can help.