The pros and cons of entering into a retirement village contract

Written by: Georgina Pauling
May 11 2023

Making sense of an Occupation Right Agreement

Moving into a retirement village is a major life decision – not just because of the expense, but because of the huge adjustment required later in life.   

An Occupation Right Agreement (ORA) is a legal contract between a person or a couple and a retirement village operator, which grants a licence or right to occupy a unit, apartment or townhouse in the village for the remainder of a person's life.

While an ORA can provide security, access to amenities, social interaction, and support, it's important to carefully consider the costs and limitations before making a decision.

We analyse the pros and cons of these agreements to help make the decision a little easier.


Security and peace of mind

Purchasing an occupation licence and moving into a retirement village is a lifestyle choice, not an investment decision. An ORA provides security by allowing you to live in the village for the rest of your life, giving you peace of mind knowing that you will always have a home.

Assistance and support

Many retirement villages offer support services such as healthcare, housekeeping, and meals, which can be beneficial as you age.

Access to amenities

The beauty of many retirement villages is the various amenities provided, such as a gym, swimming pool, and other common areas, that can be used without having to be maintained by you.

Social interaction

Living in a retirement village can provide an opportunity to interact with other people who are in a similar stage of life, which can be beneficial for both mental and emotional well-being.


This is a biggie. In most cases you know at the outset how much you will receive upon the re-sale of the unit or apartment.


For the most part you are not responsible for the maintenance and upkeep of the exterior of your unit, apartment, or townhouse.


No capital gains

Most ORAs do not allow you to benefit from any capital gains made when your unit, apartment, or townhouse is re-sold.

Cost increases  

The ongoing weekly fees and service charges can increase annually which can put a strain on finances. In some cases, the weekly fee continues to be paid until the unit, apartment, or townhouse is re-sold long after you have vacated the property.

Delay in re-sale, receiving sale proceeds

The re-sale of the property can take some time and you only receive the proceeds of the sale when the incoming resident pays the purchase price.

Lack of control

As the village operator owns the land and the buildings, you do not have full control over your property and there are restrictions on what you can and cannot do with it.

Contract complexity

ORAs are complex legal contracts, and it can be difficult to understand all the terms and conditions. It's important to seek independent legal advice before signing an ORA.

For advice about estate planning and trusts, including queries about ORA, contact senior associate Georgina Pauling on @email or 09 985 2527.