It is a legal requirement when purchasing a residence within a retirement village to have independent legal advice. A solicitor must sign a certificate confirming you have fully understood the terms and conditions of the village documents.
The primary reason for this is because you are buying a right to occupy the home, which is very different from buying standard property.
Not only is it important that you make your decision after being properly advised of all the facts, it can also be a very unsettling and emotional time. It can help to speak with someone independent of your family about the proposed move. We have assisted many clients by discussing the options and providing support as a sounding board throughout the process to ensure it is a smooth and easy transition.
We can also assist with updating your wills and setting up enduring powers of attorney – which are a requirement from most retirement villages. If you intend to sell your house before you buy into the retirement complex, we can also assist with the residential conveyancing for the sale of your home.
FREQUENTLY ASKED QUESTIONS
Is purchasing a unit in a Retirement Village just like any other property purchase?
No. About three-quarters of New Zealand's retirement villages offer 'licences to occupy', also known as a 'right to occupy' or 'occupation licence'. This type of arrangement is very different from your usual home ownership.
An occupation licence is a personal right only. You do not own the property, but you have a contractual right to occupy that dwelling. Unlike normal property ownership, you are not able to mortgage the property, and you cannot rent the property.
What is an Occupation Right Agreement?
An Occupation Right Agreement (ORA) is the name of the legal contract between the retirement village and a resident. The ORA sets out payment information, the disputes process and termination rights. It is important that you work through your ORA with your lawyer and ensure you understand each part of the agreement prior to signing.
Should we seek legal advice before purchasing in a Retirement Village?
Yes. The Retirement Villages Act of 2003, and its regulations, are designed to protect residents’ interests and set out basic standards for operating a village. These include disclosure of information to intending and existing residents, protections around residents’ financial interests, the details of termination arrangements, the relationship between the owner (the village), resident, and manager including the methods of dispute resolution, and resident’s rights.
It is a requirement of the Retirement Villages Act 2003 that each new resident receives legal advice to ensure they understand the Occupation Right Agreement (plus accompanying documentation) prior to signing. The lawyer is required to witness the resident’s signature after clearly explaining all content of the agreement.
What are the costs of living in a Retirement Village?
All villages are different, however most have a common set of costs. The amounts for each of these costs varies between villages, and sometimes by individual units within a village.
First, there is a purchase price or entry fee, which gives the resident the right to live in the property for their lifetime or as long as they choose. Second, when the resident leaves the village, they will receive the cost paid (entry fee) minus the deferred management fee and any other outstanding costs due at that time. The deferred management fee (also known as an amenities fee) is usually around 30% of the purchase price (it varies from village to village and may be more or less) and it represents a contribution towards the provision of accommodation and communal village facilities and buildings. Third, residents also usually pay a village weekly fee, usually monthly in advance, which is calculated as a proportion of the cost of the village outgoings. This fee usually includes costs such as rates, insurance, rubbish collection, security patrols, lawn & garden maintenance, but will vary by facility. It is also important to note that the village retains any capital gains in the property.
What should I consider when comparing Retirement Villages?
There are many differences between villages, and each village's occupation right agreement needs to be understood to ensure you know what these differences are. For instance:
- Weekly fees – some village's weekly fees are fixed, others may increase their fees based on the percentage increase of New Zealand’s superannuation each year, whereas others only increase fees if the village's operating costs go up e.g. if rates or insurance costs of the village are increased.
- Capital gains/losses - it is recommended that you speak with the village manager or sales consultant to make sure you have a clear understanding of the contractual details surrounding capital gains and losses. This information can also be found in the village's most recent ‘disclosure statement’ which is listed on the New Zealand Companies Office website. We can also advise you on this.
- Deferred Management Fee – this is a percentage of the price that you paid to enter the village and is usually capped between 25 – 35% but varies between villages.
- Fees on exit - whether residents will be required to continue to pay the weekly fee once they leave the village, and for how long, differs depending on the village. It is important that you ask the village manger or sales representative this question so there aren’t any unplanned financial costs once you leave. Refurbishment requirements, and who bears the costs of these, should also be raised.
- On-going care – possible future residential care needs (rest home care, long term care hospital, dementia care, and psycho-geriatric care) should also be considered. Some villages provide all the levels of care and some do not.
- Visitors – what are the rules around friends and family being able to stay and use the village facilities? Each village may have a slightly different policy around this so make sure you check with the village manager.
- Pets - most villages will allow small well-behaved pets in the village as long as it is agreed to by the village manager first. However, this is not the case for all villages, and some will have a 'no pets' policy so it is important you ask this question.
I recently had the privilege of working with Julie on a recent legal matter, and I can’t express enough how grateful I am for the exceptional service I received. From start to finish Julie demonstrated unwavering professionalism, expertise and dedication that has truly set her apart. From our very first consultation, it was evident that Julie had a deep understanding of the legal complexities involved in my case. Julie patiently listened to my concerns, explained the legal processes in a clear and understandable manner, and outlined a strategic plan to achieve the best possible outcome. What impressed me the most was Julie's commitment to my case. She was incredibly responsive, promptly answering all my questions and concerns, and keeping me updated on every development along the way. I never felt left in the dark or unsure about the status of my case. In the end, thanks to Julie's dedication and legal expertise, we achieved a positive outcome that exceeded my expectations. I can't thank her enough for the peace of mind she provided during a challenging time in my life. If you're seeking a lawyer who combines legal excellence with genuine compassion for their clients, I wholeheartedly recommend Julie. I would not hesitate to enlist her services again if needed in the future.
Julie has acted as our lawyer for a number of years. She has represented our interests on property conveyancing i.e. purchasing, selling and also reviewing build and development contracts. Julie also helped us create our Wills and EPA with good advice on how we might structure them in a clear and concise manner. We have no hesitation in recommending Julie. We have found her to be professional, approachable and respectful, and she explains 'legal language' In layman's terms and is always responsive to our queries.
I’m very appreciative of the legal advice and representation I have received from Julie Bremner. I have secured her services over the past eight years and she continues to exceed my expectations. Julie is always there to help swiftly and with a great degree of experience, knowledge and professionalism whenever I need her. I will continue to recommend her to clients, friends and family.
We recently sold and purchased a home with the assistance of Che Bunce. Che was first class to deal with, he made the process very smooth and simple, ironing out the inevitable challenges, going out of his way to help us through all the details. I highly recommend Che and look forward to receiving his help in the future.
We worked closely with Che Bunce through the process of buying our first home, as well as selling, and then buying our second. Che kept us completely up to date throughout the entire process, every time, and there we no surprises or shocks along the way! Highly recommended.
"Thank you Stacey at Base Law, you've made the handling of the purchase of my property very streamlined. Communication throughout was excellent."
"We have utilized Stacey’s legal expertise for a number of years for numerous property transactions. She is excellent to work with, has a great understanding of all legal requirements for a variety of different transaction’s relating to property. We have recommended her services to friends and family. The feedback from them has also been very positive."
"We have worked with John for nearly 2 years. In that time he has been extremely helpful in guiding us through a complicated and often delicate legal process. He has consistently offered sound, well-reasoned and pragmatic advice. In the face of a number of frustrations, he has remained steadfast in his commitment to moving our case towards a resolution with skill and patience. We feel extremely fortunate to have found John and would not hesitate in recommending his services."
"We have employed the legal services of Belinda in several different capacities over a number of years. Belinda is astute, knowledgeable and respectful, always ensuring that we fully understand all relevant avenues and implications to the matters being dealt with. We have always found Belinda to be so easy to relate to and genuinely concerned for our best interests. Belinda is our legal go to and we absolutely recommend her to anyone seeking legal advice and guidance or work. We are so grateful for her."
"Belinda’s legal advice and guidance has been invaluable to our business over the past few years. She is very approachable, thorough and responsive. We highly recommend her and look forward to our continued working relationship."
"Belinda has been my solicitor for over 7 years now and I couldn’t recommend her enough. Her attention to detail, and willingness to go the extra mile has always been above and beyond my expectations. Belinda has been an excellent and supportive lawyer throughout our 7 years together and has always been honest, hard-working, and willing to help whenever I have needed her. I highly recommend using Belinda, you won’t be disappointed."
"Jane really helped me cut through the emotional distress and confusion I was feeling and focus on the practical resolution of the issue through the legal system that I was unsure how to approach. I really appreciated the combination of Jane's expert knowledge and skills, the transparency in services and associated costs provided upfront, as well as the compassion I felt in our interactions."
"Belinda has been amazing, we can't thank her enough. Everytime we need her she has hit the ground running and delivered. We cannot recommend her more."
"We've had a number of experiences with different lawyers over the years and I can say without hesitation that Georgia has by far been the best to work with. She goes the extra mile any chance she gets and we felt completely supported and informed through every step of our dealings with her."
"As new business owners with a young family we wanted clarity on how to best protect our family assets and also wanted to establish our wills. Georgia from the start was full of knowledge, that really felt personalised to our situation. After the first phone call with Georgia, we felt like we were getting answers to our questions and had real solutions to our needs. We feel like we have sorted out some of the most important aspects of our lives, and it allows us to move forward knowing that we are more financially secure as a family and more prepared for things that life might throw at us."
"Jane Zohrab was sincere and informative. She was prompt and so easy to talk to. Thank you!"
"Toni has been wonderful and made each experience with her super easy and straight forward."
"Toni at Base Law was very easy to work with and answered every big or small question we had in mind. Especially with being a first home buyer, she made every step smooth and simple. All round lovely to work with as well."
"Thank you Nicholas for the great service you provided Extreme Plumbing & Gas with a business/legal dispute. From the start I appreciated your very professional approach and great communication. You made the entire process very easy and stress free. It really made a difference how you were always responsive to my calls or emails. I cannot recommend you enough."
"Georgia has been such a pleasure to work with. We had unique requirements and needed flexibility. Georgia gave great advice, helped us with next steps and made what could have been a stressful process a lot easier. We would definitely work with Georgia again in the future."
"Suzie has a natural ability to put clients at ease, build trust and show compassion. She was patient and thorough while reviewing our parents’ affairs, setting up wills and enduring powers of attorney. She explained complicated jargon into understandable language providing sound advice which we acted upon. Suzie treated us as part of her family and we’re very happy to recommend her to anyone needing caring legal services."
"During the process of purchasing my first home, I've been blown away by Suzie's professionalism, approachability and value for money - I'd highly recommend Base Law."
"Rosie, thank you again for the amazing support you have given us through this process. It has been an overwhelming, exciting, scary process but also an amazing learning curve for us - and it has been a much more enjoyable process having you on our team and going the extra mile where you have! You will be highly recommended to anyone we know looking at a trustworthy, friendly, efficient and professional lawyer."
"Suzie, thank you again. You have been awesome and so easy to deal with, understanding my needs, keeping me up to date and acting on behalf during these unusual circumstances."
"Suzie, it has been a god send having you represent the family. Your assistance during the hardest of times during the lockdown period is invaluable. I will definitely employ your services for any legal matters that should arise, and recommend you to everyone that I know."
"Rosie was compassionate and thoughtful. She did not approach the issues with only “lawyer talk”, but as a sensitive human. We had complete confidence we were dealing with someone who really understood what she was doing. Professionally, as an accountant, I have dealt with many solicitors. I can say, based on my experience, that Rosie is a top practitioner."
"Suzie took care of our Family Trust arrangements, along with our respective enduring powers of attorney and wills. We have found her to be very professional, along with being very pleasant to deal with."
"Suzie clearly delivered to myself and others a focused and friendly approach to all the issues presented to her. We had some older family member matters to resolve; Wills, Trust issues, License to Occupy, etc.. Suzie provided exceptional service, concise and sound advice which we accepted and followed through in the execution of the required legal documents. Suzie is professional, focused and pragmatic in providing intelligent legal solutions and recommendations."
"Our family has used Rosie for everything from wills and family trusts to house purchases and sales. I can absolutely recommend her, she is easy to deal with, communicates well, makes things simple and to top it off is a lovely person to work with."
“Rosie helped us with our wills and powers of attorney and she made it such an easy process for us. She gave us a lot of advice and explained different ways we could do it, all along with a friendly professionalism. I cannot recommend her enough and will definitely be using her services in the future.”