Understanding Occupation Right Agreements
An ORA is not a property purchase. Before you sign, understand what you are actually buying, what you are giving up, and the financial implications.
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Retirement Villages
This is unlike any other property transaction.
You are not buying a home. You are paying for the right to occupy one, under terms set by someone else. Before you sign, understand what you are agreeing to.
Understanding ORAs
What's in an Occupation Right Agreement?
An ORA is a legal contract between you and the village operator. It governs everything: what you pay, what you get, and what happens when you leave.
Occupation Right
You are paying a capital sum for the right to live in a unit, not ownership of property. The village operator owns the building. You have a licence to occupy it.
- You cannot sell the unit yourself
- The village manages the exit process
- What you get back depends on ORA terms
Weekly Fees
Beyond the capital sum, you'll pay ongoing weekly fees for village services, maintenance, and rates. These fees can increase over time.
- Check what's included and optional add-ons
- Understand increase mechanisms
- Some continue after you leave
Exit Terms
When you leave, you don't receive an immediate refund. Most ORAs tie your refund to when a new resident moves in. This can take months or years.
- Refund timing affects care transitions
- Estate settlement can be delayed
- Some villages offer guarantees
Capital Treatment
What happens if property values change? Different ORAs handle gains and losses differently. This affects what your family ultimately receives.
- Some share gains with residents
- Some retain all gains for operator
- Loss protection varies widely
Cooling Off Period
The Retirement Villages Act gives you rights to cancel within a set time. Some agreements extend your rights.
The Big Number
The Deferred Management Fee
20-30%
Usually DMF range retained by villages
Example: Understanding the impact
Capital sum paid
$700,000
DMF at 30%
-$210,000
Maximum refund
$490,000
This is before any other deductions. Very few agreements apply the DMF to exit value (which may be higher or lower).
Accrual Period
DMF usually accrues over 3-5 years. Leave before it's fully accrued and you pay less. Stay longer and it makes no difference.
Calculation Base
Is the DMF calculated on your original payment? Almost always, not the exit value.
What It Covers
Almost always, the DMF contributes to village maintenance, refurbishment, and operator margin. Understand what you are paying for.
Legal Requirement
Why independent advice isn't optional.
The Law Requires It
Retirement Villages Act 2003
Before signing an ORA, you must receive independent legal advice. This is a statutory requirement, not a suggestion.
Independent Means Independent
We work for you
The village may suggest lawyers. You should choose your own. We have no relationship with operators. Our only duty is to you.
Not Just a Signature
Genuine Understanding
We explain the agreement, model the numbers, answer your questions. We certify that you understand what you are signing.
"The village staff are often lovely and genuinely helpful. But they work for the operator. When it comes to the legal terms of your commitment, you need advice from someone who works for you."
How We Help
ORA Reviews
Before You Sign
We examine every clause that affects your financial position and rights. You'll understand the DMF, exit terms, weekly fees, and what happens if you need care.
Village Comparison
Choosing Wisely
Comparing villages? We help you understand the legal and financial differences between options. Small variations in wording can mean significant differences in outcome.
Resident Issues
After You Move In
Fee disputes, service issues, transfer to care. If you are already in a village and facing problems, we can review your position and advise on your options.
Estate Exits
For Families
When a resident passes, the estate must navigate exit provisions, timing, and refund calculations. We assist executors through this process.
Resources
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Common Questions
When you buy a house, you own the property outright. With an Occupation Right Agreement, you are paying a capital sum for the right to live in a unit that remains owned by the village operator. You cannot sell the unit yourself, and when you leave, the refund process is governed by the ORA terms.
This fundamental difference affects everything from how your capital is treated to what you can leave to your family.
The Deferred Management Fee (DMF) is a percentage of your capital sum that the village retains when you leave. DMFs usually range from 20% to 30%, accruing over 3 to 5 years.
For example, if you pay $700,000 and the DMF is 30%, the village retains $210,000. Your maximum refund would be $490,000, before any other adjustments.
Most ORAs tie the refund to a new resident moving in and paying the capital sum for your unit. This can take months, and in some cases, years.
If you need to move to a care facility, or if your estate needs to settle your affairs, this timing can create real financial pressure. We explain the exit provisions so you understand the implications before you sign.
The Retirement Villages Act 2003 requires you to receive independent legal advice before signing an ORA. Parliament included this requirement because ORAs are complex, the commitments are significant, and residents need protection from signing agreements they do not fully understand.
We work for you, not the village operator. Our role is to ensure you understand exactly what you are committing to.
Absolutely. We welcome family members at our meetings. Adult children often attend ORA review meetings. Understanding together helps everyone, and family members sometimes ask questions you had not thought of.
Hearing the explanation together prevents later confusion and ensures your family understands the commitment you are making.
Yes. After you sign, you have 15 working days to withdraw without penalty. This is a statutory protection under the Retirement Villages Act.
If you have second thoughts, or if something changes, this cooling-off period gives you an opportunity to reconsider.
Yes. We can review your ORA and advise on your position regarding fee disputes, service issues, or other concerns. The Retirement Villages Act provides a complaints and disputes process if you cannot resolve issues directly with the operator.
If you or a family member needs to transfer to hospital-level care, we can also advise on what provisions in your ORA apply to that situation.
When a resident passes away, the estate must navigate the exit process. This usually involves understanding the refund calculation, waiting for a new resident to provide the capital sum, managing any ongoing fee obligations, and coordinating with the village on access and timing.
We regularly assist executors with these matters.
Retirement Villages Guide
Understand your rights and the process of moving into a retirement village.
Read the Guide