Retirement Villages – Occupation Right Agreements and related documents
Many people as they get older weigh up the options of remaining in their own home or selling their home and going into a Retirement Village. For many this is a pragmatic decision to take away the obligation of maintaining the home both physically and financially and looking to have a “community of support” within the environs of a Retirement Village. (Such as that provided by Metlifecare, Ryman, Summerset, Ranfurly, and others).
People of course need to be aware that the fundamental nature of going into a Retirement Village is not a good investment. You pay a certain sum to go in (e.g. $500,000 – $900,000) and at the end if you leave by terminating the Occupation Right Agreement or if you die and the Agreement is terminated a sum is then payable to your estate but there is a large “discount” off the original “purchase price”.
This financial “downside” is in addition to the fact that there is no capital increase in the “purchase price” paid in the way that one might otherwise achieve by buying in the ordinary housing market.
In addition there is a monthly cost for what is often called “Village Outgoings”.
The legal documents applicable to going into a Retirement Village are also very comprehensive. The Occupation Right Agreement itself is usually between 55 and 65 pages long. There is also a Disclosure Statement of 30-40 pages. There is a Code of Practice. There is a Code of Residents Rights.
All these documents – in particular the Occupation Right Agreement – need careful examination by your lawyer to ensure that you know “all the ins and outs” financially and in other respects before you commit yourself.
The process will usually start with a visit to a Retirement Village to see whether you like the particular environment. That will lead to a sales person inviting you to sign an Application. This is also a detailed document which sets out the basic financial arrangements and sometimes will include conditions e.g. the sale of your own property. It will also be conditional on you providing a medical report to the satisfaction of the Retirement Village operator.
Before “settling” and going into the Retirement Village you must, through your lawyer, provide Enduring Powers of Attorney for Property and Personal Care and Welfare and confirm that you have a Will.
We are experienced lawyers having dealt with a large range of Occupation Right Agreements over a wide range of Retirement Village operators (such as those referred to above) and know exactly what to look for to help you through the process.
Legal costs with regard to the process are usually in the range of $3000-$4000.
We look forward to assisting you when you are considering taking the step of leaving your home and going into a Retirement Village. Please contact David Brown in our office in the first instance.