There is a lot of information you need to be aware of when considering moving to a retirement village. Village Guide has put together a list of some frequently asked questions along with detail around some common terminology you may hear.
A licence to occupy, which is often referred to as an occupation right agreement (or ORA), confers on a person the right to occupy a unit within a retirement village in New Zealand.
With a licence to occupy you purchase the contractual right to occupy a property, but you have no legal ownership of the property itself or the land.
To learn more about a licence to occupy read our article ‘What is a licence to occupy?’
Under a licence to occupy, it’s common for a retirement village operator to retain between 20-30% of your initial capital sum; this is usually referred to as a deferred management fee.
A good way to think of the deferred management fee is that it covers the long-term costs of residing at the village, such as maintenance of facilities and communal areas, and the re-licensing and refurbishment of your property after the licence ends.
To learn more and see examples read our article ‘The costs of living in a retirement village’
In the disclosure statement, you’ll find information about:
The disclosure statement should also outline any plans for the development of the village including the building of new units (and the effect of this on existing residents), as well as any conditions and restrictions on the sale of units, and the time it has taken to sell vacant units over the past 12 months.
An ORA is an umbrella term for any occupancy contract you enter into with the operator of a retirement village. It sets out the terms of your occupation, including your rights and obligations, and those of the operator.
A licence to occupy is a type of ORA, and is the most common form of occupation on offer in retirement villages in New Zealand.
In New Zealand, every intending resident is required by law to seek legal advice prior to signing an ORA (under the Retirement Villages Act 2003).
There are hundreds of retirement villages throughout New Zealand. All villages have different entry costs, fee structures, and property types, with options to suit a variety of budgets. If you’re interested in living in a retirement village - either now or in the future - then request an information pack from those in your area and ask for a breakdown of costs to be included.
For more information about the different costs of living in a retirement village read ‘The costs of living in a retirement village’
To buy into a village, you’re typically required to pay a deposit and a capital sum for an occupation right agreement (ORA). The most common legal title under an ORA is a licence to occupy, which gives you a contractual right to live in a specific property within a village, but no legal ownership of the property itself or the land.
For more information about retirement village costs and fees read The costs of living in a retirement village
While you’re living in a village, you’ll be required to pay periodic (usually weekly) fees to cover day-to-day operating costs such as rates, insurance, grounds maintenance, staff wages and village services. The fee amount (and what’s included) varies significantly from village to village, so be sure to ask the sales manager for details.
Fees may increase over time (with appropriate notice from the village), or they may remain the same during your entire occupancy (these are generally marketed as fixed fees).
For more information about retirement village costs and fees read The costs of living in a retirement village
Every village is different. However, in most cases, you will be required to pay separately for things like contents insurance, phone & internet, household power, and any additional services you choose, such as housekeeping, meals or healthcare.
Some of these costs may be covered in the fee if you live in a serviced apartment. Be sure to ask the village sales manager for a full breakdown of inclusions and exclusions by property type.
Exit costs often depend on the circumstances in which you leave the property. For example, whether you leave the village altogether or transfer to a different property within the village (e.g. from a villa to a serviced apartment).
Some potential leaving costs to be aware of include:
For more information about retirement village costs and fees read our article The costs of living in a retirement village
Most retirement villages in New Zealand sell units on a licence to occupy. This means you purchase the contractual right to occupy a property, but you have no legal ownership of the property itself or the land.
Although it’s uncommon, some retirement villages in New Zealand do offer rental units. Most village rental agreements are residential tenancy agreements.
Some retirement villages offer stratum in freehold units or apartments (called unit titles). This usually means that you own the property and have some control over when it is sold (and whether you or the village operator sells it), and that you’re entitled to any capital gain. Villages that offer unit titles also tend to have a lower age-of-entry, usually between 50 and 60 years of age.
The exact ownership terms for unit titles varies from village to village.
For more information on units titles, read our article What is a licence to occupy? And refer to the section titled ‘Units titles’ which outlines some different scenarios to provide guidance about how unit titles typically work in New Zealand retirement villages.
In New Zealand, it’s rare for residents to receive any capital gains or bear any capital losses on the re-licensing of a property within a retirement village. The most common scenario is that capital gains and capital losses will be received or absorbed by the operator.
To learn about when capital gains and losses might apply read our article Capital gains and losses: Key things to know
According to the Code of Practice, a village operator must maintain a comprehensive insurance policy to cover loss or damage caused by fire, accident or natural disaster.
The insurance policy must cover:
Insurance must be for full replacement (if available). If full replacement insurance isn’t available, indemnity insurance is permitted, and the operator must clearly communicate what cover is provided.
For more information read our article ‘Insurance requirements for retirement village operators’
Some retirement villages across New Zealand have residents who are still working either full or part-time. It is unlikely that ‘being retired’ will be an entry requirement.
However we suggest you speak directly with the village or sales manager of any village you are interested in to become familiar with their entry criteria.
There are more than 400 retirement villages across New Zealand and each will have its own entry criteria to becoming a resident. Commonly retirement villages will have an age criteria of either 70 or 75 years however some allow entry at 65 or even 60 years.
We suggest enquiring directly to any villages of interest to find out what the entry age is and to ask if there is any flexibility in their criteria.
Most retirement villages in New Zealand allow small pets, providing they won’t disturb neighbouring residents (e.g., a dog that barks). Pets are usually considered on a case-by-case basis and accepted at the manager’s discretion.
The leaving process differs from village to village and will be outlined in the occupation right agreement. In most cases, you will receive your exit payment once the unit has been re-licensed. Depending on when you leave, you may need to pay the full deferred management fee (or a portion of it) and any outstanding charges associated with your account.
You may also need to pay fees associated with re-licencing your unit, such as admin, legal or marketing costs. It’s important you ask the sales manager whether these costs are included within your deferred management fee or charged separately.
For more information, download our PDF ‘leaving the village’
When a resident leaves a village, it’s usually (but not always) the operator’s responsibility to sell the licence to occupy for the vacant unit. Every village has a slightly different sales process, which should be clearly outlined in the occupation right agreement (it’s important to read this carefully).
The operator must “take proper steps to market the residential unit” and consult with the former resident about the marketing process, including when the unit goes up for sale, the “general nature of the marketing plan”, and any changes relating to the marketing and sale of the residential unit. The operator must update the former resident on the progress of marketing on a monthly basis.
The resident’s occupation right agreement will set out whether weekly fees cease when the resident provides vacant possession or if they continue through until the residential unit is sold. If the latter applies, then the operator of the village must reduce any outgoing fees by at least 50% by the later of either the date the resident stops living in the unit (and removes all their possessions) or six months after the date that the former resident’s occupation licence terminates.
All fees for personal services must cease as soon as a resident stops living permanently in the unit.
Once the licence to occupy is sold, the operator must pay the former resident all money owing to them under their occupation right agreement within five working days of receiving payment in full from the new resident.
Please note, this is subject to the new resident’s cooling off period having expired. Also, if the former resident has died, probate will be required before payment can be made. Note that some operators agree to pay out earlier or pay interest after a certain period.
Every village will follow a slightly different process for selling vacant units. However, at a minimum, all villages must adhere to the guidelines for selling vacant units outlined in the Retirement Villages Code of Practice 2008 (clause 51).
After three months
If a new occupation right agreement has not been entered into within three months, the operator must report in writing to the former resident, and provide detailed monthly updates from then on. The monthly reports must clearly outline the steps the operator is taking to market the unit.
After six months
If the unit is still vacant after six months, the operator must get an independent valuation of the unit (at their expense) to make sure the asking price is a suitable price. The former resident may also obtain an independent valuation (at their own cost) if they feel the first valuation is inaccurate and the operator must consider this when determining a suitable price.
After nine months
If an occupation right has not been sold for the unit after nine months, the former resident may choose to take a dispute notice to the Retirement Villages Disputes Panel, if grounds for a dispute have arisen.
Former residents may make a complaint about the sales process at any time
For more information, please read our guide on Leaving the village.
Most villages have village guidelines to ensure everyone can live together harmoniously. Please ask the sales manager for more details.
Most villages allow for friends and family to stay (and actively encourage this), but visitor policies vary from village to village. Be sure to ask the sales manager about their policy towards visiting friends and family.
Most retirement villages offer continuum of care, meaning there will be clear healthcare pathways available to you if needed.
If the village has an on-site care home, the care pathways will usually be provided there. For villages without an on-site care home, ask the sales manager if they have a relationship with a nearby care home where residents will receive priority access.
It’s quite common for a resident to change homes within a village, for example from a villa to a serviced apartment. The exact costs of doing so will depend on when this change arises as well as other factors unique to the village and the property types.
For more information read our article ‘changing homes within a village’.
Homes in retirement villages are purpose-built for retirees, which means they are almost always low maintenance. Whether you choose to live in a villa, townhouse or apartment, you’ll be able to down your DIY tools and spend more time doing what you enjoy.
Most retirement villages have a warm and welcoming community. You will likely live alongside like-minded neighbours and make new friends. Many villages coordinate voluntary social activities to encourage neighbourly bonds, such as group outings, quiz nights, and hobby groups.
Most retirement villages have good on-site security, such as monitored cameras or on-site security guards. The level of security differs from village to village, so it’s important to ask the sales manager for details.
Nearly all retirement villages have a communal TV and communal dining area at a minimum, while others have swimming pools, gyms, and hair salons. Facilities vary from village to village, so it’s important to ‘shop around’ to find a village that ticks all the right boxes for your lifestyle.
To learn more about retirement village facilities & activities read our article Facilities and activities: What to expect from retirement villages
Around 65% of retirement villages have an on-site care home. You may be able to request medical assistance from care home staff if needed. Common staff and contracted health practitioners include registered nurses, physiotherapists, and podiatrists. Healthcare services at villages vary widely, so it’s important to research this carefully.
To learn more about retirement village healthcare services, read our article Services and care: What to expect from retirement villages
Most retirement villages have emergency call buttons in every property and common area or provide pedants for residents to wear. These push buttons/pedants are usually monitored 24/7 by trained responders, providing peace of mind that help is always close by.
Typically, the main role of the residents' committee is to represent the interests of residents by acting as the communication channel between them and the operator.
Specific functions of a residents committee include:
The village operator is required to adhere to the above as outlined in the Code of Practice 2008.
Yes, as outlined in Retirement Village Act 2003, all registered New Zealand villages must have a complaints process which is made known to residents.
The Retirement Village Act 2003 has been put in place to look after the rights of both intending and current residence. The Act places control over how retirement villages are run with regulations that must be adhered to.
The Act makes provision for:
The Retirement Villages Code of Practice 2008 sets out the minimum requirements that operators of a retirement village must carry out to meet their legal obligations in New Zealand.
It covers areas such as:
The Code of Residents’ Rights set out the general terms of respect and care that the Retirement Villages Act provides for all residents.
Here are some examples of the rights:
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