Carolyn Ranson | October 9, 2026
What you need to know before you sign
If you're considering moving into a retirement village in New Zealand, one of the most important documents you'll encounter is the Occupation Right Agreement (ORA).
An ORA sets out your right to live in your chosen unit, villa or apartment, along with the financial arrangements, responsibilities and conditions that apply.
But an ORA is quite different from buying a home in the traditional sense.
Understanding exactly what you're signing, and what you're actually purchasing, is important before committing to retirement village living.
What is an Occupation Right Agreement?
An Occupation Right Agreement, sometimes called an occupation licence or licence to occupy, is the most common legal arrangement used by retirement villages in New Zealand.
Rather than purchasing the property itself, you're generally purchasing a contractual right to occupy a particular dwelling within the village.
The village operator usually continues to own the land and buildings.
This means you generally won't be named on the certificate of title and cannot usually register a mortgage or caveat against the property.
Your occupation rights are typically protected by the village's Statutory Supervisor.
Is an ORA the same as owning a home?
No.
This is one of the most important differences to understand when considering retirement village living.
With traditional home ownership, you own the property and are generally entitled to any increase in its value when you sell.
An ORA works differently.
Depending on your agreement:
- you may not own the property
- you may not receive any capital gain
- you may be responsible for some or all of a capital loss
- you may pay a Deferred Management Fee when your ORA ends
- there may be other exit or refurbishment costs.
The exact arrangements vary between villages, which is why comparing the ORAs can be just as important as comparing the properties themselves.
Can a family trust hold an Occupation Right Agreement?
Sometimes.
Some retirement villages allow an ORA to be held by a family trust, while others require it to be held personally by the resident.
If you have an existing family trust or other asset-planning arrangements, this is something to consider before entering into the agreement.
What should you check before signing an ORA?
Your ORA covers much more than your right to live in the property.
- The total cost
Look beyond the initial entry payment. Your agreement may also include regular village outgoings, utilities, user-pays services, administration fees and a Deferred Management Fee. - Capital gains and losses
Check whether you receive any increase in the value of the unit when it is relicensed and whether you're responsible for any capital loss. - What happens when you leave
Understand what can be deducted from your repayment, when your money will be repaid and whether repayment depends on the unit being relicensed. - Everyday life in the village
Your agreement and village rules may cover pets, visitors, alterations to your unit and whether a caregiver can live with you. - What happens if your needs change
If you later want to move to another unit or require a higher level of care, you may need to end your existing ORA and enter into a new one. A further Deferred Management Fee may apply.
Why do you need independent legal advice before signing an ORA?
Prospective retirement village residents are required to obtain independent legal advice before entering into an ORA.
This shouldn't simply be viewed as a box to tick.
Your lawyer should explain what the agreement means for you, including the financial implications, your rights and responsibilities, what happens when you leave and how the agreement fits with your wider estate planning. Your lawyer must then provide a Solicitor’s Certificate to the village confirming this.
Every ORA can be different, so advice must be based on the actual agreement you're considering.
Before you sign an Occupation Right Agreement
When comparing retirement villages, don't just look at the unit, location and facilities.
Compare the agreements too.
Understanding your ORA before you sign can help you make an informed decision about whether the village and its financial arrangements are right for you.
Free guide: What to check before signing an ORA
Considering retirement village living?
Download our free Practical Guide to Occupation Right Agreements in New Zealand, including plain-English explanations of ORAs, a retirement village comparison worksheet and a practical checklist of questions to ask before you sign.
For advice about an Occupation Right Agreement, contact Carolyn Ranson's Personal Assistant, Suzanne Sumner, on 09 837 6840 or suzanne.sumner@smithpartners.co.nz to arrange an appointment.
Frequently asked questions about Occupation Right Agreements
What does ORA mean in a retirement village?
ORA stands for Occupation Right Agreement. It is the legal agreement that sets out your right to occupy a particular retirement village unit, villa or apartment and the financial and other conditions that apply.
Do you own a retirement village unit under an ORA?
Generally, an ORA gives you a contractual right to occupy the property rather than ownership of the property itself. The village operator usually continues to own the land and buildings.
Do you get the capital gain on a retirement village property?
Not necessarily. Some villages offer capital gain-sharing arrangements, while many ORAs don't give residents the same entitlement to capital gains they would have with traditional home ownership. Your individual agreement should explain what happens to both capital gains and losses.
Can a family trust hold an ORA?
Some retirement villages allow an ORA to be held by a family trust, while others require it to be held personally. The requirements of the particular village need to be checked.
Do I need a lawyer before signing an ORA?
Prospective retirement village residents are required to obtain independent legal advice before entering into an ORA. Your lawyer must explain the legal and financial implications of the particular agreement you're considering and certify this.
Important information
This article provides general information only and does not constitute legal advice. Every situation is different, and you should obtain legal advice specific to your circumstances before making any decisions or taking action based on this information.
In accordance with our obligations under the Lawyers and Conveyancers Act 2006, Smith and Partners cannot provide legal advice until you have become a client and received our Terms & Conditions of Engagement and Information for Clients.
Please note that we require a retainer to be paid before your first meeting and cannot assist with legal aid matters.
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