Retirement village frequently asked questions: what you need to know
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.
- The village’s ownership and management structure
- Statutory supervision arrangements
- Charges/fees associated with living in the village
- An estimate of what you would receive if you left the village after two, five or ten years
- The village’s community facilities and services, including what provision is made for maintenance at the village
- The deferred management fee. If you leave the village, the deferred management fee will be deducted from the capital sum you receive when the operator re-licenses your unit. If you transfer to another property in the village, it’s important to ask the sales manager how your deferred management fee will be treated.
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Ongoing weekly or periodic fees. Your occupation right agreement will set out whether
weekly fees cease when you provide vacant possession or continue until your unit is
re-licensed. If the fees continue, the operator must reduce them by at least 50% by the
later of either:
- The date you stop living in the unit (and remove all your possessions) or
- Six months after the date your licence to occupy terminates.
- Retirement village property
- Capital improvements or additional fittings provided by residents
- Residential units owned by residents
- If your pet passes away, can you replace them?
- Are there restrictions on the type of pet you can bring? For example some villages might limit the size or breed of dogs.
- Are there designated areas in the village for you to exercise your dog?
- And does the village require proof of your pet's state of health?
- Calling a meeting with the operator or its representative. The operator or its representative is expected to attend residents’ committee meetings when invited, unless the request is in some way unreasonable (e.g., too short a period of notice).
- If the village has a statutory supervisor the residents’ committee may call a meeting with the statutory supervisor. The statutory supervisor is expected to attend residents’ committee meetings when invited, unless the request is in some way unreasonable (e.g., too short a period of notice).
- Registration of retirement villages
- Occupation right agreements between operators and residents
- The Retirement Villages Code of Practice
- The Code of Residents' Rights
- A complaints facility
- A disputes resolution process
- Staff qualifications and training
- Safety and security
- Fire and emergency procedures
- Frequency of residents’ meetings and residents’ participation in decision making
- How the complaints process is conducted
- What should happen upon termination of an occupation right agreement
- The right to services and other benefits as detailed in the occupation right agreement
- The right to information about matters that could affect your residency
- The right to be consulted about potential changes to services, benefits and charges
- The right to complain and receive a timely response
- The right to a speedy and efficient process for resolving disputes, and to use a support person when dealing with the operator or other residents of the village
- The right to be treated with courtesy and not to be exploited
If you’re considering moving into a retirement village then "Licence to occupy" is a key term you'll encounter. Unlike owning a house, it offers a different approach in that you purchase the contractual right to live in the home for as long as you choose but you don't own the home itself.
First, it's important to understand what Occupation Right Agreements are. An Occupation Right Agreement or ORA for short, is a legally binding contract between you and the village operator that sets out the terms of your residency. There are different types of ORAs, but the most common in New Zealand is a Licence to Occupy.
Although the exact terms of a Licence to Occupy will differ across operators, there are some common characteristics of most contracts.
First, as the village operator owns the home, they are responsible for costs such as rates, insurance, and exterior maintenance. Residents typically pay a weekly fee that contributes to covering these costs.
Second, unlike owning a home, LTOs typically don't offer financial gain when you leave. Some villages will share capital gains, but it’s important to review the terms carefully. Sharing gains might affect other benefits like who is responsible for the exterior maintenance and costs such as insurance.
Another consideration is that, under an LTO, the operator usually handles the process of finding a new resident when you move out. This saves you the hassle of selling the home yourself. However, it also means less control. The operator sets the re-license price, and you typically won't receive your portion of the proceeds until they find a new resident - unless your contract specifies differently.
Finally, with a licence to occupy, you can't use the home as security for a loan. However, some villages may offer borrowing options against your departing pay-out, if you're moving within the village to assisted living or other higher levels of care.
In summary, living in a retirement village with a licence to occupy provides a secure and comfortable lifestyle with clear residency terms. It’s important to carefully weigh the benefits – like predictable costs and no maintenance hassles – against the potential loss of capital gains you might experience compared to owning a traditional property.
To learn more 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’
Moving into a retirement village can be a great option for many people, but understanding the costs involved is important before making a decision.
Entry fees are essentially the capital sum you pay upfront for the right to occupy a specific home within the village.
While similar to buying a regular house, there's a key difference. Most retirement village homes are purchased under a "Licence to Occupy" agreement.
This means you don't own the property itself, but rather have the legal right to live there for as long as you choose. Because of this, the cost of a retirement village home is normally less than a similar property outside the village in the same area.
For more information about retirement village costs and fees read The costs of living in a retirement village
When living in a retirement village, you'll pay regular fees, typically called weekly fees. Every resident pays these fees which contribute towards the village's day-to-day operational costs.
These fees go towards costs like insurance, rates, and exterior home maintenance. They also go towards amenities you enjoy as a resident, such as keeping the grounds and gardens looking beautiful, staff wages, and other village services.
It's important to note that the exact fees and inclusions vary between villages. When comparing your options, be sure to ask the sales manager for a breakdown of what their weekly fees cover.
Another question you may have is whether these fees can increase over time? The answer is yes but villages are required to give you proper notice before any increases are made.
In saying this, many retirement villages do offer what’s called ‘fixed weekly fees’. This means the amount the weekly fee is set at when you move in will remain the same for as long as you live there. ‘Fixed weekly fees’ are likely to be promoted on a villages website but it is also a good idea to ask a village sales manager directly about whether their weekly fees are fixed or not.
For more information about retirement village costs and fees read The costs of living in a retirement village
Your weekly fee covers many of your day-to-day living expenses in a retirement village, but there are a few other costs to factor in.
These additional costs typically fall into two categories which are variable costs and optional services.
Variable costs are everyday expenses that all residents will have, but the amount you pay will vary depending on your usage. Examples include household electricity, phone and internet charges, and insurances like vehicle and personal contents.
Optional services, on the other hand, are things you choose to pay for on a user-pays basis. This could include housekeeping, meals or even booking a hair appointment if the village has an on-site salon.
It's important to note that these examples apply to independent living homes. Assisted living residents in serviced apartments will have many of these costs bundled into their weekly fee.
Make sure you ask the sales manager for a breakdown of what's included in your weekly fee and what's extra, especially when comparing villages.
For more information about retirement village costs and fees read The costs of living in a retirement village
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
Although not common, a very small number of retirement villages in New Zealand offer rental units. These work similarly to any regular rental agreement you might be familiar with, and are covered by the Residential Tenancies Act.
There can however be some variations depending on the specific agreement. For instance, some rental units might have a "memorial on the land title" which offers the resident additional security.
As with all contractual arrangements, be sure to carefully review the rental agreement with a legal professional to understand your full rights and responsibilities.
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.
This is a common question we get asked at Village Guide.
The truth is, there's no one-size-fits-all answer.
Many villages in New Zealand set the entry age at either 70 or 75. However others welcome you as early as 65, or even younger.
The best way to find out is to reach out directly to the villages you're interested in. They'll be happy to tell you their specific age requirement and see if there's any flexibility.
Many retirement villages do allow pets, but there are some things to consider. First, different villages have different rules. It will likely depend on factors like the location of the village and the type of home you choose. For example whether you live in a villa with a backyard or a smaller apartment.
Generally, villages will want to make sure your pet is a good fit. This could involve obedience training or even a trial period to see how your pet adjusts to living around other residents. They might also ask you to have a plan in place for your pet's future care, in case you can't look after them anymore.
Some questions you might want to ask a sales manager about their pet policy include;
Remember, the best way to receive information is to talk directly to the retirement villages you're interested in. They'll be happy to answer all your pet-related questions.
For more information, refer to our article Pets In Retirement Villages: What You Need To Know.
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.
Under most Licence to Occupy agreements, it is the operators responsibility to market and sell your home when you leave the village. As you don’t control this process there are rules in place to protect you which are outlined in the Retirement Villages Code of Practice.
Here's what you can expect to happen at 3, 6 and 9 months if your home remains unsold.
If a new agreement has not been entered into within three months, the operator must report in writing to the former resident, and provide monthly updates from then on. These reports must clearly outline the steps the operator is taking to market the home.
If the home is still vacant after six months, the operator must get an independent valuation completed at their expense. This is to ensure the price they have listed the home for is reasonable. In other words they aren’t asking too much for the home causing the delay in it being re-licenced. The former resident may also obtain an independent valuation (at their cost) if they feel the first valuation is inaccurate. In this situation the operator must consider both valuations when determining a suitable price for the home.
If the home is still vacant after nine months, the former resident may choose to take a dispute notice to the Retirement Villages Disputes Panel.
According to the retirement villages association, most homes are re-licensed within a 9 month period. This of course varies widely and it’s a good idea to ask the village sales manager about the average time it has taken to re-licence homes in their village over the previous 12 month period.
Further, be sure to ask about ‘additional assurance’. For example many villages will begin to pay interest on the money owed to you as the former residents if your home remains unsold after either 6 or 9 months.
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.
For further information, refer to our article Transitioning to higher level care: What you need to know.
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
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.
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.
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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