Retirement Villages
Retirement villages have become increasingly popular in New Zealand as individuals and couples seek a supportive community in their later years. These villages offer a range of accommodation, care options and amenities tailored to the needs and preferences of retirees. If you are considering moving to a retirement village in New Zealand, it is crucial to understand the concept of the Retirement Village Occupation Licence.
What is a Retirement Village Occupation Licence?
In New Zealand, a retirement village occupation licence is a legal agreement between the resident and the village operator that governs the terms and conditions of living in the retirement village. It grants the resident the right to occupy a unit or apartment within the village rather than providing ownership of the property itself. Essentially, it establishes the legal relationship between the resident and the village operator.
Key Features and Benefits:
Exclusive Occupancy: The occupation licence ensures that the resident has the exclusive right to occupy the unit or apartment specified in the agreement.
Access to Amenities and Services: The licence typically includes access to various amenities and services provided by the retirement village, such as communal spaces, recreational facilities, healthcare facilities, care/service packages and social activities.
Financial Considerations: The occupation licence outlines the financial aspects of residing in the retirement village. It specifies the entry fee or purchase price, ongoing fees (such as service fees and maintenance costs), and the exit fees or charges when the resident decides to leave or pass away. Understanding these financial obligations is crucial before committing to a retirement village. Virtually all villages in New Zealand charge a deferred management fee which is usually between 20% to 30% of the purchase price of the Apartment upon exiting the Village. As most do not give residents the benefit of any capital gain on their apartment, this means you will likely not get all your money back.
Rights and Responsibilities: The licence sets out the rights and responsibilities of both the resident and the village operator. It clarifies matters such as the conduct of both parties, dispute resolution procedures, expectations regarding property maintenance, and the procedure on exiting the Village.
Legal Protection and Regulations: The Retirement Villages Act 2003 governs retirement villages in New Zealand. This legislation provides legal protections to residents by requiring operators to provide clear and comprehensive occupation agreements. The Act also mandates transparency regarding financial arrangements, disclosure of information, and the establishment of residents' committees.
Important Considerations:
Seek Legal Advice: Before signing a retirement village occupation licence, you are required to seek independent legal advice to ensure you fully understand the terms and implications of the agreement. An experienced lawyer can help clarify any doubts and protect your interests.
Comparing Retirement Villages: Conduct thorough research and visit multiple retirement villages to assess their facilities, services, location, costs, and reputation. This enables you to make an informed decision and find the village that best suits your needs and preferences.
Disclosure Statement: Request and carefully review the village's disclosure statement, which provides essential information about the village, including its financial position, rules, and obligations. This document will help you gain a comprehensive understanding of the retirement village, the costs to you and its operations.
Estate Planning: Retirement Villages require you to have Enduring Powers of Attorney and Wills in place before you can enter the Village. This is to prevent the delays and extensive costs involved if you lose capacity and do not have an attorney or if you die intestate. If you don’t have a current Will and Enduring Power of Attorney or these need to be updated, you will need to arrange to do this with a lawyer.
Moving to a retirement village in New Zealand can offer a fulfilling and supportive environment for retirees. Understanding the Retirement Village Occupation Licence is crucial for anyone considering this lifestyle choice. It establishes the legal framework for your residency and outlines the rights, responsibilities, and financial considerations involved. Every year we assist dozens of clients move into Villages throughout the lower North Island, so we can assist you to make an informed decision if you are considering this move.