While moving house can be stressful, the good news is that it’s arguably easier to move into a retirement village compared to a general home or apartment.
The New Zealand retirement village purchasing process includes a number of unique features to help people embarking on their big move.
This means it is possible for people to move into a retirement village, even when they are having trouble selling their existing home.
So let’s go through the key steps to move into a retirement village!
Step one: Finding the right retirement village
If you are considering moving, the first step is to investigate potential future retirement villages. There’s no better place to start doing this than by scrolling through the village listings at Village Guide.
Village Guide allows you to request information packs about potential villages, along with learning about upcoming events and open days.
You can then speak directly to individual operators to learn about their dwellings, community features, services and contract terms and to arrange a village tour.
Step two: Finding the right dwelling
The next step involves selecting a home in the village.
At this time, it may be helpful to get an opinion from a real estate agent on the value of your existing home, to make sure you can fund the purchase of your potential new retirement village home from the sale of your existing home.
This is likely to be entirely possible, given that the Retirement Villages Association estimated in 2022 that the average retirement village dwelling is set at a price around 70% of the value of the average freehold home in the surrounding area.
The sales staff of the retirement village will also be able to let you know about any upfront, ongoing and exit costs involved in moving into the village, to help with your calculations.
Step three: Application form and deposit
Most villages allow residents to secure a retirement village dwelling through lodging a sales application form and paying a refundable deposit, usually between $2,000 to $10,000.
Under retirement village legislation, this deposit must be held in an interest-bearing account, at arm’s length from the village.
This form doesn’t mean the resident is committed to moving into the village, but it does get the ball rolling.
The sales application form may state that securing the dwelling is conditional upon an Occupation Right Agreement (ORA) being signed by the incoming resident within a set time.
It may also say that any eventual move into the village is conditional on the sale of the resident’s home, giving peace-of-mind to the resident.
Step four: Occupation Right Agreement (ORA)
The ORA sets out the terms and conditions on which you will be entitled to occupy and live in a unit at the village.
It includes provisions relating to termination, weekly (and other) charges, whether the charges can be increased, village rules, information on facilities and even whether you can have a pet.
Importantly, under New Zealand retirement village legislation, an intending resident must be offered independent legal advice, by the operator, before signing an ORA.
Other documents to consider at this time include:
- The village’s Disclosure Statement (explains how the village runs from day to day and what you can expect from living here)
- Code of Residents’ Rights (set out the general terms of respect and care that the Retirement Villages Act provides for all residents); and
- Retirement Villages Code of Practice (sets out the minimum requirements that operators of a retirement village must carry out to meet their legal obligations in New Zealand)
Find out more: Retirement village contracts and paperwork
Like the sales application form, the ORA often includes a clause which means the agreement can only be enforced if the incoming resident sells his or her home.
Below is a clause you may find in an ORA.
“If the resident’s application form is subject to the satisfaction of a condition relating to the sale of property by the resident, then this Occupation Right Agreement shall also be conditional upon the satisfaction of such condition.”
Such a conditional sale agreement is less likely in the general home market, although it may happen during weaker market conditions when vendors are willing to make concessions to potential buyers to secure a potential sale.
Sometimes, it is possible for residents proposing to move into the retirement village to extend the ORA commencement period, if they are having trouble selling their home.
Importantly, after signing the ORA (usually within three weeks of lodging the sales application), you can also take advantage of a cooling-off period to back out of the agreement for a set period after signing it.
Under legislation, the cooling-off period is 15 working days for existing homes, and is longer for proposed new homes.
Everything you need to know.
Step five: Sell your home
The next step involves selling your home.
If you get a bigger price than you anticipated, that’s more money for your retirement. Book the theatre tickets and holidays now!
If you are unable to sell your home for the price you need, you may be able to use the processes listed above to back out of the retirement village deal and get your deposit back.
In some circumstances, if you sell your home for a lower price, you may be able to find another lower priced home in the same village (if one is available).
Step six: Moving in
The next step involves organising removalists and moving into your fantastic new community.
This may have to also involve some de-cluttering and the sale of unnecessary furniture or appliances.
Find out more: Downsizing and decluttering
You’ve almost certainly made the right decision, with 98% of New Zealand retirement village residents either satisfied, very satisfied or neutral about their village experience.
However, if you are not satisfied, some operators also provide residents with a money-back guarantee if they want to move out of the village within a set period (usually three months).
This, again, would never be offered by a general market vendor, and is a further example of the relative ease of moving into a retirement village.
Conclusion
A report released by the Real Estate Institute of New Zealand (REINZ) on 17 June 2024 found that it was taking a median 44 days to sell a property across the nation in May 2024, amid a surge in listings and sales.
This was a slight increase on the median 43 day figure in April 2024, but a decrease from 49 days in May 2023.
Given this, it’s good to know that the New Zealand retirement village industry includes a number of unique features allowing people to move into village dwellings, even when it may take a little longer than normal to sell a home.
This may include:
- Application forms and agreements which are conditional on the sale of the resident’s home
- The ability to extend agreement periods
- A requirement that an incoming resident is offered legal advice
- A cooling-off period after signing an occupation agreement
- Voluntary money-back guarantees at some villages
Find out more: Village Guide resource centre
Disclaimer: Please note this story has been prepared as a general guide only, and should not be relied upon as a substitute for seeking your own independent legal and financial advice and asking your own questions.
