What is an Occupation Right Agreement (ORA)?

If you’ve started researching retirement villages in New Zealand, you’ve almost certainly come across the term ORA – short for Occupation Right Agreement. For most people, it’s an unfamiliar concept, and the legal paperwork that surrounds it can feel overwhelming at first glance.

The good news? The ORA is actually quite straightforward once someone explains it in plain English. And understanding it clearly is one of the most important steps you can take before deciding on retirement living.

Here’s what you need to know.

What is an ORA?

An Occupation Right Agreement is the legal contract between you and a retirement village operator. When you move into a village, rather than purchasing the property outright as you would a family home, you purchase the right to occupy your villa or apartment – and to enjoy everything the village has to offer.

Title to the land and building remains with the village operator. What you own is your right to live there.

This model is used by the vast majority of retirement villages across New Zealand. It’s not unusual or risky – it’s simply a different way of holding property, designed specifically for retirement living and governed by the Retirement Villages Act 2003.

Why does New Zealand use this model?

The ORA model exists because retirement villages aren’t just homes – they’re communities with shared facilities, staff, and ongoing services. The structure allows the operator to maintain the village to a consistent standard, manage communal spaces, and provide services and care as residents’ needs change over time.

In return, residents get a low-maintenance lifestyle, access to shared facilities, and the security of knowing their home and garden are looked after – without the responsibilities of traditional homeownership.

What do you actually pay?

There are three main payments involved in moving to a retirement village:

• The entry price. This is the upfront amount you pay to secure your villa or apartment. Think of it as equivalent to a purchase price, though as explained above, you’re buying the right to occupy rather than the title to the property.
• The weekly fee. This ongoing fee covers your share of village costs – similar in concept to a body corporate charge. At Aspiring Village, the weekly fee includes rates, building insurance, 24-hour emergency call response, access to all community facilities, and full maintenance of your home and the village grounds. In practice, many residents find their overall living costs are lower than when they owned their own home, particularly for power (new, well-insulated homes) and general maintenance.
• Additional services. These are optional extras – things like housekeeping or meals – which can be arranged through the village or external providers as your needs evolve.

What happens when you leave?

This is the part that surprises people most, so it’s worth explaining clearly.

When you leave the village – whether that’s by choice, due to health changes, or upon passing – you receive your original entry price back, minus an exit payment. This exit payment is sometimes called a Deferred Management Fee (DMF).

At Aspiring Village, the exit payment for independent living villas and apartments is calculated at 5% of the original purchase price per year, for up to five years – so a maximum of 25%. For Assisted Living Apartments, the structure is slightly different: 10% on entry and 20% thereafter, to a maximum of 30%.

Importantly, there are no hidden costs or additional surprises beyond this. Any outstanding weekly fees are also settled at exit.

The DMF is how most retirement villages fund ongoing maintenance, staffing, and village improvements. Understanding it upfront means there are no shocks later.

One important note: the ORA does not carry any entitlement to capital gains. If the property increases in value during your time there, that gain stays with the operator. This is different from owning a freehold home, and it’s worth factoring into your financial planning.

Who protects your rights?

The retirement village industry in New Zealand is tightly regulated – more so than many people realise.

Every village must operate under the Retirement Villages Act 2003, which sets out detailed requirements around transparency, financial reporting, and residents’ rights. Villages must also be registered, and you can verify any village’s registration through the Companies Office website.

One of the key protections under the Act is the requirement for a Statutory Supervisor – an independent party appointed to represent residents’ interests, particularly if the operator were ever to fail to meet its obligations. At Aspiring Village, this role is filled by Covenant Trustee Services.

Beyond the Statutory Supervisor, residents at Aspiring Village elect their own Residents’ Association, which works directly with the village management team. And the village is a member of the Retirement Villages Association, which holds members to a further code of practice.

What about the paperwork?

There’s no getting around the fact that there’s a reasonable amount of legal documentation involved in signing an ORA. But it’s all designed to protect you.

Before you sign anything, you’ll receive a disclosure statement alongside the ORA itself. Read both carefully, and – this part matters – have your lawyer review them before you commit. Most New Zealand lawyers are familiar with ORAs and can explain anything that’s unclear. If yours isn’t, Aspiring Village can connect you with lawyers who are.

Don’t let the paperwork put you off. It’s there in your interests.

Common questions about ORAs

Before You Sign

An ORA is simply a different way of holding property – one that’s been designed specifically for retirement village living in New Zealand. It’s well-regulated, transparent, and used successfully by thousands of New Zealanders.

The most important thing you can do is understand it clearly before you sign, take independent legal advice, and ask as many questions as you need to.

If you’d like to talk through how the ORA works at Aspiring Village, our team is always happy to walk you through it – no pressure, no jargon, please get in touch.