Occupation Rights Agreement – A Summary
What Is an Occupation Rights Agreement?
In short, it is the agreement that allows someone to live in a unit within a retirement village without owning the property.
There are a number of ways that retirement villages lease their properties to their residents, tailored to suit the retirement village’s business model and the needs of the people who live there. It’s important to remember that all of these agreements are bound by government rules and regulations to protect both tenants and the retirement village itself.
Because an ORA dictates your occupational rights, obligations, and protections while living in the property, it is vital that you have trusted and independent legal advice before signing one to make sure the contract is something you fully understand and are happy to agree to.
The most common way of organizing retirement living in villages is through an Occupation Rights Agreement – this is sometimes shortened to ORA, and sometimes called by different names.
This brief summary will walk you through the basics of an ORA agreement and some of the things you might come across while considering one.
Quick Tip: the term ‘occupational rights’ can refer generally to the rights of a person to occupy as well as this specific arrangement found in retirement villages – the right to reside in a property without owning it.
What Does ORA Mean in Retirement Villages?
An ORA in retirement villages refers to the agreement between an individual and the retirement village that sets out the rights of the individual to live in a residence in exchange for certain things. It outlines the rights and protections of each party, which is why a legal professional is required to be present at the signing of any ORA.
For example:
– You may be permitted to have a pet, but are responsible for maintaining the condition of the property
– You can have friends or relatives come and stay with you, but only for a certain time
In addition to these obligations and rules, every village has their own obligations that you must agree to in order to live in the village.
Important Legal Point: Before anyone signs an Occupation Rights Agreement, the village operator must give them a copy of the retirement village’s disclosure statement, Code of Residents’ Rights, and Code of Practice.
How is in ORA agreement different to a rental or owning a house?
Essentially, an Occupation Rights Agreement is a contract which grants you the right to live there in exchange for certain obligations.
– It is a personal agreement – you don’t own the property
– You cannot mortgage or take out a loan against the property
– You cannot pass on the property in a will
– It is not subject to rental tenancy laws in the same way
Are Occupation Rights Agreements Called Something Else Too?
Yes, the official term is an Occupation Rights Agreement but it is also called by other names, such as:
– ORA
– Licence To Occupy
– Occupation Licence
What is a License to Occupy (NZ)?
Another term for an Occupation Rights Agreement
Can A License to Occupy Be Transferred?
No, as a rule, an ORA or a License to Occupy cannot be transferred by you to anyone else. There are some organisations which may allow someone to purchase the right to occupy as part of a family trust – you should get independent legal advice on this matter.